Let’s all be honest for a second. The planned Hobbit films, given the state of MGM and the J.R.R. Tolkien estate, are caught up in a huge mess of litigation, lawsuits, rumors, and debt. However, the clouds finally seem to be clearing: according to the LA Times, production is nearly set to begin with a target of January 2011. Sources that spoke on condition of anonymity to the newspaper earlier this week stated that the Lord of the Rings precursor is expected to get the greenlight everyone wants, including the current and potential investors. There are a lot of hurdles to overcome, so hit the jump for the full details on the progress that the films have made, plus who I think might make a bigger push to get these films off the ground.
The Hobbit has had a tough time of late, most recently with the potential union attack and the availability of a key actor who might play Bilbo Baggins. Even director, producer, and co-writer Peter Jackson hasn’t signed a deal yet, but everything seems to be very close. Final negotiations are taking place with Jackson, which would certainly give the two films solid ground for once. Then we have talks about money.
If you haven’t been paying attention, MGM stands at the heart of the delays. They are completely strapped for cash but hold half the rights and international distribution. However, they won’t be the only people financing the movie. Warner Bros. and subsidiary New Line Cinema will co-finance the film and distribute in the U.S. Just how much money is on the table? According to the report, the two films will cost close to $500 million, and WB is set to hand over half of that money. So, that leaves MGM to come up with the other half or negotiate away a portion of its proceeds and rights.
Warner Bros. wants to develop their partnership with DC Comics as a breadwinner to stave off some of the lost income once the Harry Potter franchise comes to a close in 2011. However, think of all the money that the original trilogy of Lord of the Rings films made (nearly $3 billion in box office gross), and you can see why WB might be eager to put a little more weight behind their investment and become a big player in the worldwide distribution of this film. As much as I love Guillermo del Toro, he was a wild card when he took over direction of the two Hobbit films. Now that Peter Jackson is essentially back at the helm, I can sense an ease and familiarity for fans of the first three films (there were a lot of them). That means the potential for these to turn into huge box office winners is nearly guaranteed, so while WB has the cache to put behind this film set, I think it is very likely they will.
However, Warner Bros. isn’t the only potential investor, and things aren’t quite that simple. MGM has more than one hundred debt owners as a result of being nearly bankrupt. They will decide the reorganization of the company as they negotiate with Spyglass Entertainment chiefs Gary Barber and Roger Birnbaum to take over management. MGM also has the ability to look for outside investors, including 20th Century Fox, who has a previous contract to distribute MGM films overseas.
The goal is to have production rolling by mid-January in order to meet a holiday 2012 release for the first film — the second film would be released December 2013. If they don’t meet the January target for production, the entire film may be delayed yet again. As it stands, WB and MGM have reportedly sunk $45 million into the pre-production of the two Hobbit films, and I can’t imagine them being okay with yet another delay.
Final negotiations with the unions over their attacks against the production in New Zealand are also expected to come to a close, so all that seems left is squaring away the money. As soon as news breaks of an official greenlight — which should come within the next month — we will let you know.