After years of delays, setbacks, ecstatic highs and devastating lows, fans of J.R.R. Tolkien’s work may soon find themselves back in Middle-earth.
According to LA Times Warner Bros., its subsidiary New Line Cinema, and partner Metro-Goldwyn-Mayer are very close to giving the greenlight to one of the most anticipated pair of films in history.
The “Lord of the Rings” prequel “The Hobbit,” which will be shot all at once and split into two films, will cost close to $500 million to produce on top of the $45 million that has already been spent on preproduction costs like script fees, set design, casting meetings and visual effects work.
Anonymous sources close to the project have indicated that the studios are in final negotiations with director, producer and co-writer Peter Jackson, solving the problem created when director Guillermo del Toro backed out, and have solved a slew of other setback including a rights issue regarding Tolkien’s estate. The one remaining obstacle to make the long-awaited return to the land of dragons and elves is an official go-ahead from the struggling MGM, which is responsible for financing half the production budget (Warner and New Line are ready and willing to commit the other half).
MGM’s debt problems have been well-documented over the past few years putting traditional cash cow titles like “James Bond” in jeopardy. Spyglass Entertainment heads Gary Barber and Roger Birnbaum are expected to take over management of the studio and help to negotiate its more than 100 debt owners. MGM is reportedly eager to get the films off the ground because of the potential cash flow the high profile pics are expected to generate, and may give Warners the go-ahead in the coming days, but has yet to secure financing for their half of the budget.
Potential investors include 20th Century Fox (which already has a deal to distribute MGM’s films overseas), private investors, or Warners which may loan MGM its share of production costs.
Those close to negotiations are confident that all issues will be resolved in time for the first film to get a 2012 holiday release with the second film to follow in December 2013.
