Peter Jackson is going after an American film studio for US$100 million ($143 million), claiming he has been underpaid in the deal brokered for the Lord of the Rings trilogy.
New Line Cinema, the Time Warner subsidiary that backed the films, is understood to have paid Jackson about US$200 million
($286 million).
But he claims he lost out because New Line gave several distribution deals on highly lucrative spin-offs such as DVDs and books to companies within the Time Warner empire.
Jackson claims that if the process had been competitive, revenue from Lord of the Rings merchandise would have been much higher.
Other Hollywood movie moguls will be watching with interest, as the practice New Line is accused of - known as "vertical integration" - is common among the conglomerates that control many movie studios.
The films cost US$281 million ($399 million) to make but made more than US$4 billion ($5.7 billion) in sales and New Line pocketed about US$1 billion ($1.4 billion).
A lawyer working for the company anonymously told the New York Times: "Peter Jackson is an incredible film-maker who did the impossible on Lord of the Rings. But there's a certain piggishness involved here. New Line already gave him enough money to rebuild Baghdad, but it's still not enough for him."
It is believed the two sides will probably reach an out-of-court settlement.
- INDEPENDENT
