Just two years ago Weta Digital, Sir Peter Jackson's internationally-regarded special effects house and the outsized heart of his Wellywood film empire, was assessed as being worth only $400m.
This week, US tech giant Unity Software decided its intellectual property alone was worth $2.3b and paid enough to catapult Jackson back into the realm of billionaires.
The difference between then and now? Connections and capital provided by Napster founder, and Facebook's first president, Sean Parker that broadened horizons at the company from the turbulent film sector and hitched its creations to the burgeoning market for computer games.
Parker, 41, bought a fifth of the company in 2019, and upped his stake to 25 per cent the following year. This second tranche triggered the involvement of the Overseas Investment Office as it brought his investment to more than $100m, and came as Covid began to bite. His capital was needed to continue work on the long-delayed and gargantuan Avatar sequels.
The deal announced this week is unusual - Unity's executives this week told investors it involved "severing a company in two and acquiring the tools" - that appears to leave Jackson's Wellywood empire intact with a new company, Weta FX, continuing his longstanding film work.
Details of the deal filed by mobile and game engine software company Unity with the Securities and Exchange Commission, and bullish statements made by the company's executive, show exactly who has received this windfall and detail a few fishhooks in Wellywood's future.
Jackson's share of Weta Digital is recorded in SEC filings as being held by the Film Property Trust, of which he and his partner and Middle-earth collaborator Fran Walsh are trustees. New Zealand companies office filings show these amount to 60 per cent of the company's shares.
Based on the announced sale price of US$1.6b in cash and shares, the deal will see Jackson and Walsh pocket $855m in cash and another $555m in Unity stock.
Long-time Weta effects supervisor Joe Letteri - whose work from Lord of the Rings and onwards has won him four Oscars - landed $191m. Delaware company Weta Principals Fund scooped up the remaining $143m. SEC filings show this entity has Prem Akkaraju, a Parker confidante brought in to be Weta Digital's chief executive in early 2020, as managing director.
As for Parker? His investment of just over $100m two years ago looks to have this week landed him $600m.
Neither Jackson, Parker or Akkaraju responded to requests for comment this week. The deal still requires Overseas Investment Office approval.
New York analyst Martin Yang of Oppenheimer & Co said he didn't have insight into how strings were pulled over the past two years, but said he wouldn't be surprised if Parker was responsible.
"Parker's social circle overlaps with Unity's CEO, and both are into technology investing," he said.
Yang said the premium paid by Unity above the value of the company was also not surprising, given the collapse in interest rates in the interim, and the sudden interest in graphical digital assets partly driven by Facebook's push into the metaverse.
"Weta Digital also happens to be a very attractive niche that will be in high demand," he said.
Yang considered the acquisition a good move for Unity, with the company saying its graphical tools would allow it to compete in a new market worth up to $10b annually.
The move comes at a welcome time for Jackson, whose Hollywood and financial star had dimmed over the past decade as he stepped away from helming blockbusters and began pursuing niche side projects and documentaries.
He famously struck box office gold, and a personal fortune, after securing a percentage of some films' earnings, with The Lord of the Rings and King Kong. Some of the proceeds were used to assemble a $150m property empire including film studios, a Wairarapa estate, a staggering collection of film and war memorabilia, and many historic buildings and churches in his hometown of Wellington.
But the last time a big-budget success of his was screening in cinemas was in 2014 with the last installment of The Hobbit trilogy. The following year he dropped off Forbes' list of billionaires.
Last year his boutique World War I plane manufacturing firm The Vintage Aviator - which he has understood over the years to have poured close to $50m into - ceased production. In late 2020 he withdrew millions previously pledged to fight a property development in his neighbourhood at Wellington's Shelly Bay.
Weta Digital this week was rightly celebrating. Only around a sixth of the company's 1500 staff are transferring over to Unity, leaving the company soon to be rebranded as Weta FX largely intact, and the deal propelled senior executives on to the rich list and sparked the announcement of bonuses for long-serving staff.
The deal also illustrates the rapidly changing media landscape. Covid decimated cinema theatre revenues but proved a boon for gaming companies who found their audience stuck at home. Unity, despite being yet to turn a profit after nearly 20 years of operations, is a giant where Jackson's freshly minted $555m in shares will see him a sub-1 per cent shareholder.
But this deal isn't free money and this story could yet have a twist.
In a quarterly earnings call this week Unity executives said a four-year deal had been inked with Weta FX that would require $70m in annual licence fees to be paid for the effects house to continue using the software it developed in-house but sold - with an expectation that further contracting arrangements would push annual flows to Unity closer to $100m.
This would appear to require the company previously known as Weta Digital to significantly grow. As a private company, it is not obliged to file financial statements, but a Herald investigation found its annual film revenues only amounted to around $200m - around half of which would be eaten up by the new arrangements with Unity.
The vast bulk of its work is supported by Screen Production Grant subsidies, which in turn are heavily reliant on tentpole productions like Avatar. With James Cameron's decade-long project finally entering its home stretch with release only a year away, to avoid a horror ending Wellywood will soon need a next big thing to avoid a fade to black.