'The Hobbit': Weinsteins and Miramax sue Warner Bros. over profits

After months of legal harrumphing from all corners, Miramax sued Warner Bros. and New Line for $75 million over claims to profits related to The Hobbit sequels. Bob and Harvey Weinstein, who ran Miramax when it was developing The Hobbit in the 1990s and retained a financial piece of Peter Jackson’s 2012 movie, are part of the lawsuit.

“This case is about greed and ingratitude,” the plaintiffs claim in papers filed today in Manhattan. “It arises in connection with a decision by Warner Bros. and New Line executives to divide a motion picture based on J.R.R. Tolkien’s The Hobbit into three installments and Warner Bros and New Line’s claim that, as a result of that unilateral decision, Plaintiffs are not entitled to their previously agreed upon share of revenue from The Hobbit film.”

Miramax owned the rights to Tolkien’s novel — and its Lord of the Rings trilogy follow-up — briefly in the 1990s before selling them to New Line in 1998. As part of that deal, however, Miramax retained a stake in The Lord of the Rings and The Hobbit, a claim that earned the Weinsteins more than $100 million after Peter Jackson’s films became billion-dollar blockbusters. However, New Line and its parent companies argue that that agreement extended only to the first Hobbit film — not its sequels. “This is about one of the great blunders in movie history,” said Warner Bros. in a statement. “Fifteen years ago, Miramax, run by the Weinstein brothers, sold its rights in The Hobbit to New Line. No amount of trying to rewrite history can change that fact. They agreed to be paid only on the first motion picture based on The Hobbit. And that’s all they’re owed.”

Miramax and the Weinsteins maintain in the suit that the company had invested $10 million into developing The Hobbit before New Line took over. According to The Hollywood Reporter, the Weinsteins received about $12.5 million from the proceeds of The Hobbit: An Unexpected Journey, and are seeking a similar slice from The Hobbit: The Desolation of Smaug, which opens Dec. 13, and The Hobbit: There and Back Again, due in 2014. Earlier this month, Warner Bros. attempted to have the case decided in arbitration.

“Quite frankly, we are surprised and frustrated by the position Warner Bros is taking with regards to The Hobbit franchise,” The Weinstein Company said, in a statement. “Since the beginning, Miramax, Harvey and Bob Weinstein have been a force in getting these books to the screen. In fact, they funded the initial technology for the films at Peter Jackson’s WETA. Without these early investments, none of these pictures would have been made. We are shocked that New Line and Warner Bros don’t recognize that fact. The position they have taken, in our view, is not in line with the contract we signed. That contract stated that the story of The Hobbit was to be told over three movies. Thus, Miramax and The Weinstein’s have the rights to all three. We will let the courts decide and feel confident we will ultimately prevail.”

Warner Bros. and the Weinsteins have been sniping at each other frequently this year. Earlier this summer, Warner Bros. exercised its right to protect the title The Butler, a 1916 silent short film, forcing The Weinstein Company to pay a fine and call its film Lee Daniels’ The Butler. At the time, Harvey Weinstein hinted that the flap was more about The Hobbit than The Butler, telling CBS This Morning, “I was asked by two execs at Warner Bros., which I’m happy to testify to, that if I gave them back the rights to The Hobbit, they would drop the claim.”

Miramax declined to comment.