Is Harvey Weinstein Right In His Hobbit Lawsuit Against WB?

It's easy to overlook Harvey Weinstein huffing and puffing and threatening legal action, because it's hard to deny an old man his simple pleasures, but his latest litigious tussle with Warner Brothers over The Hobbit profit participation may not just be Weinstein's audition tape to play Gollum in the final Hobbit film.

Weinstein and brother Bob are suing Warner Brothers over revenue for the latest installment in The Hobbit franchise, The Hobbit: The Desolation of Smaug, as well as forthcoming sequel The Hobbit: There and Back Again. The brothers sold their rights to The Hobbit and The Lord of the Rings books to New Line, owned by Warner Brothers, back in 1998, but retained profit participation for The Lord of the Rings trilogy, and the first picture in The Hobbit franchise. The Weinsteins allege that their deal with the studio affords them profit participation on all Hobbit sequels, while Warner Brothers maintains that the Weinsteins only have legal claim to profits from the first Hobbit film. Warner Brothers had initiated arbitration against the Weinsteins in the matter on November 26th, before the brothers filed suit in New York on December 10th.

According to a Warner Brothers statement released today,

"This is about one of the great blunders in movie history. 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."

However, language from the contract made in 1998 and recently obtained by The Hollywood Reporter may give the Weinsteins a leg to stand on. The "quitclaim" agreemet outlining the profit participation between the Weinstein's then-company Miramax and Warner Brothers outlines that Miramax will receive profits from certain original pictures, but it's the language of how those original pictures are defined that may be the Weinsteins' saving grace.

The "Original Pictures" means with respect to each of the four books separately which comprise "The Hobbit: Or There and Back Again" and "The Lord of the Rings", the first motion picture, if any, based in whole or in part upon such book which is produced by or pursuant to the authority of Purchaser, but excluding remakes. A motion picture shall be deemed to be a picture based on the book "The Hobbit: Or There and Back Again" if either a) the main story line of the book is substantially the main story line of the picture, or b) the events or incidents in the picture are primarily the events or incidents from the book and the picture has both the characters Smaug the Dragon and Thorin the Dwarf (or other characters which would satisfy their story functions) or Bilbo Bagins [sic] as the lead character, or c) the title or subtitle of the picture is "The Hobbit" or "Hobbit" is any part of the title or subtitle of the picture.

Warner Brothers is set upon the fact that since the clause delineates the first motion picture, their obligation to the Weinsteins was fulfilled when they paid near $12.5 million in profits from the first Hobbit film, The Hobbit: An Unexpected Journey, but given Miramax's delineation of what constitues an original picture (basically anything in author J.R.R. Tolkien's Hobbit world, excluding remakes), the Weinstein's make a strong case for future profit participation.

Brace yourselves: we now live in a world where Harvey Weinstein may actually be right.