Key Points:

Fifteen New Zealand actors who appeared in the Lord of the Rings films are suing the New Line studio over their share of profits from merchandising.

Variety Magazine reported actors named in the suit filed yesterday at Los Angeles Superior Court were Noel Appleby, Jed Brophy, Mark Ferguson, Ray Henwood, Bruce Hopkins, William Johnson, Nathaniel Lees, Sarah McLeod, Ian Mune, Paul Norell, Craig Parker, Robert Pollock, Martyn Sanderson, Peter Tait and Stephan Ure.

A spokesman for New Line -- which is also involved in a similar dispute with Wellington director Peter Jackson over profits from the fantasy trilogy -- said the company did not comment on pending litigation.

The magazine reported the actors received royalty statements from New Line which showed that despite millions of dollars having been earned from sales of lunchboxes, T-shirts, caps and other LOTR material, there was zero "net merchandising revenue."

The actors contacted attorney Henry Gradstein, who filed a lawsuit on Wednesday to recover money the actors claimed they are owed under paragraph 11 of their contracts.

The actors believed that paragraph promised them 5 per cent of "net merchandising revenue" to be split among all actors whose characters are portrayed on the merchandise.

"What the actors didn't realise is that gross merchandising revenue apparently became 'net merchandising revenue' after certain unexpected expenses were deducted," the magazine reported.

The biggest of these was a 50 per cent distribution fee that the actors had never seen mentioned anywhere in their contract, according to papers filed in the case.

There were also other payments and fees that the actors felt were not "related to the generation of the relevant merchandising revenue."

After looking at all the fees that were being deducted from the gross revenues, the actors figured it would be impossible to ever have any "net merchandising revenue" no matter how much merchandise was sold.