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Comment by IvyMike | Hacker News Reader

> the estate is clearly a victim of "Hollywood accounting"

I agree with you that this is an amoral practice, but the thing I can never understand: since virtually everyone is aware of this con, how is anyone still taken in by it?

I mean, by all accounts the negotiations for the LOTR rights were tense--but neither Jackson's nor Tolkien's lawyer figured out to put a "percent of box office" clause in there?

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It's technically legit. Here's one way they could do it. The movie studio makes no money on the movie. The studio sells the movie to the distribution company for a fixed amount. Then the distribution company made $300 million on it, but that's not part of the contract.

IvyMike wasn't asking how it was done, but why people still seem to get screwed by it. Why didn't Jackson's lawyers know better? Asking for something like a percentage of the box office sales, or similar should be standard practice.

Jackson's lawyers know to ask for a percentage of the gross. And the studio lawyers know not to give it up.

Then Jackson doesn't make the movie, and the studio doesn't profit.

That's an interesting opinion, but I doubt the studio considered Jackson essential to making the Lord of the Rings movies. They had the rights and financing, and both they and Jackson knew they could have found someone else to direct.

For The Hobbit on the other hand...

The easy way french actors do to "give the fingers" to Hollywood accounting is simple: a % given depending on the number of people going to see the movies in theaters.

That's why actors like "Omar Sy" ("Les intouchables") are now very rich.

The film rights to Lord of the Rings were sold in the 1960's.

The LOTR film rights is a separate issue, since that was from decades ago.

But for other films, think of it like with VC terms and startups. The best ideas can dictate their terms and get points on the gross, while the ideas in the middle have to accept a deal where they get points of profit in order to get the film made.

Somebody like Eddie Murphy can demand gross points, while a first time indie filmmaker cannot.

Neither Peter Jackson not the Tolkien estate was a first time indie filmmaker.

Tolkien's deal was signed in the 60's and Jackson did have gross points, he was also a producer of the film so he was the other side of the table. His lawsuit was much more nuanced than a straight up gross vs net calculation.

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