It looks like I wasn't far off the mark with my rather simplistic analysis. For starters here is the problem with the definition of "Gross" Receipts:
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The payment situation might seem on the face of it clear. New Line obviously earned gross revenues from the trilogy. That’s not gross box-office income as reported on sites like Box Office Mojo, since theaters keep part of that, and foreign distributors bought the rights to distribute the trilogy in their respective countries and would keep all or most of the rentals paid by theaters. Still, New Line clearly took in a lot of money. It paid Saul Zaentz, Miramax, and Peter Jackson large sums based on gross revenues. What gives?
There’s one provision that affects this issue. The 1969 agreements specified that the 7.5% was to be paid “after a contractually-defined ‘Artificial Payment Level’ is reached.” According to the lawsuit,
The 1969 agreements expressly define “Gross Receipts” to include “all moneys derived by the distributor of the photoplay” less certain defined “off-the-top” expenses. The 1969 Agreements define the “Artificial Payment Level” as that point at which the “Gross Receipts” exceed 2.6 times the defined “final cost of production of the photoplay,” plus certain other defined costs. (p. 67, paragraph 22)
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For those of you who really want to know the facts of the case beyond the "for public" statements made in the press, here is the dull story:
http://www.kristinthompson.net/blog/?p=193
And as far as the Tolkien family is concerned specifically, this from the NY Times:
The Tolkien suit may prove to be especially troublesome for New Line, if only because it has the earmarks of a public relations nightmare. The plaintiffs include a charitable trust that is overseen by family members of the author, who died in 1973, and includes among its beneficiaries worthy organizations like the Darfur Appeal and the World Cancer Research Foundation.
Asked why the Tolkiens waited so long to file their complaint — New Line’s first “Rings” movie was released in 2001 — Bonnie Eskenazi, a lawyer with the Los Angeles firm Greenberg Glusker Fields Claman & Machtinger, said it was because they are proper, and British. “They do things politely, in a certain manner,” said Ms. Eskenazi, who added that the family tried for years to settle without going to court. But it became obvious to the trusts, she said, that New Line “was not going to meet their obligations unless they were sued.”
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And a little bit more readible but still informative explanation from the NY Times:
http://www.nytimes.com/2008/02/16/movies/16ring.ht
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The payment situation might seem on the face of it clear. New Line obviously earned gross revenues from the trilogy. That’s not gross box-office income as reported on sites like Box Office Mojo, since theaters keep part of that, and foreign distributors bought the rights to distribute the trilogy in their respective countries and would keep all or most of the rentals paid by theaters. Still, New Line clearly took in a lot of money. It paid Saul Zaentz, Miramax, and Peter Jackson large sums based on gross revenues. What gives?
There’s one provision that affects this issue. The 1969 agreements specified that the 7.5% was to be paid “after a contractually-defined ‘Artificial Payment Level’ is reached.” According to the lawsuit,
The 1969 agreements expressly define “Gross Receipts” to include “all moneys derived by the distributor of the photoplay” less certain defined “off-the-top” expenses. The 1969 Agreements define the “Artificial Payment Level” as that point at which the “Gross Receipts” exceed 2.6 times the defined “final cost of production of the photoplay,” plus certain other defined costs. (p. 67, paragraph 22)
---------------------------
For those of you who really want to know the facts of the case beyond the "for public" statements made in the press, here is the dull story:
http://www.kristinthompson.net/blog/?p=193
And as far as the Tolkien family is concerned specifically, this from the NY Times:
The Tolkien suit may prove to be especially troublesome for New Line, if only because it has the earmarks of a public relations nightmare. The plaintiffs include a charitable trust that is overseen by family members of the author, who died in 1973, and includes among its beneficiaries worthy organizations like the Darfur Appeal and the World Cancer Research Foundation.
Asked why the Tolkiens waited so long to file their complaint — New Line’s first “Rings” movie was released in 2001 — Bonnie Eskenazi, a lawyer with the Los Angeles firm Greenberg Glusker Fields Claman & Machtinger, said it was because they are proper, and British. “They do things politely, in a certain manner,” said Ms. Eskenazi, who added that the family tried for years to settle without going to court. But it became obvious to the trusts, she said, that New Line “was not going to meet their obligations unless they were sued.”
---------------
And a little bit more readible but still informative explanation from the NY Times:
http://www.nytimes.com/2008/02/16/movies/16ring.ht
Good Afternoon, lorien ( and Everyone ) ---
You think you were confused? Boy, was I EVER confused! The letter that I said was "just in" was sent in November of 2006! I guess those "mail runners" in this part of the Shire are especially slow! 
What I described finding in the letter was true back then - but obviously I need to pay closer attention sometimes before I start mouthing off. ---
What I described finding in the letter was true back then - but obviously I need to pay closer attention sometimes before I start mouthing off. ---I'm getting lost in all this legal wrangling, but I still think it's odd that they ( New Line ) have managed to settle with Mr. Jackson and Mr. Zaentz, but is taking so long to settle with the Tolkien Estate and those Publishers in the UK. Call it just a "hunch" ( and, of course, my "hunch" could be all wrong ) - but I still don't feel like the Tolkien Heirs are simply being used as "tools" by some greedy Publishing firms ( or other interests ) in order to "hijack" the "Hobbit Express" ---
The Movie Corporation would have nothing- nada -zilch - if it hadn't been for the creative genius of JRRT - and on account of there already existing a "pre-built-in fan base" of Middle-earth lovers who had been anxiously awaiting a cinematic version of LOTR for years already.
As the Plaintiff's lawyers put it in their Complaint:
[ ...Due in no small part to the universality of Tolkien's themes, the immense and enduring popularity of
Tolkien's literary works, and the devoted following of Tolkien fans around the world, the films smashed box office records... ]
It just seems to me like one of the first obligations of the Movie Moguls would have been to pay out to Tolkien's heirs - and even to the publishing companies as well .
The Plaintiff's also alledge that the Movie Corporation "cooked the books" -and found a way to exagerate the cost of the production by about a hundred million dollars, at one point...
It's not so much a case of elicting sympathy for those "poor" Tolkien children, so much as an attempt to elicit outrage that they have thus far been short-changed to such an extreme degree from what is rightfully theirs -
( at least, that's the way it all appears to me ) ---
Otherwise, it's a relief to know Mr. Jackson and his crew will still be participating in the new movie's process
although, I don't know if I like the feel of this new Director- I wonder if there will wind up being wrangling between this Toro guy, and P.J. as to just how the new movie is to be made, once production actually gets underway? Perhaps if P.J. has the "final say" on everything, everything will turn out more or less all right -
well, we will but wait and see...
Ardo Whortleberry
( From Way Out Over In Hobottle - Where The Mail Delivery Is So Slow! )
