Weinsteins’ ‘Hobbit’ Profit Dispute Heads to Arbitration

Hobbit the Desolation of Smaug

Second 'Hobbit' movie due out Dec. 13

Warner Bros. has filed for arbitration in a dispute with Miramax over claims by Bob and Harvey Weinstein that they are due part of the profits for ” The Hobbit: The Desolation of Smaug.”

The move comes with the studio prepping for next week’s worldwide launch of Peter Jackson’s second “Hobbit” movie, co-financed by Warner’s New Line Cinema division and MGM.

The studio made the filing last week in New York with JAMS Inc., formerly Judicial Arbitration and Mediation Services. The arbitration is private.

Miramax and the Weinsteins are represented by Los Angeles attorneys Bert Fields and Aaron Moss of Greenberg Glusker Fields Claman & Machtinger.  Warner Bros. has retained as outside counsel Evan Chesler at Cravath Swaine and Moore in New York and John Spiegel at Munger Tolles and Olson in Los Angeles.

The Weinsteins participated in the profits from New Line’s “The Lord of the Rings” trilogy due to part of the rights being controlled during the 1990s by Miramax when the brothers were in charge of the minimajor. The three films grossed nearly $3 billion worldwide.

Warner Bros. has asserted that, under a 1998 agreement, Miramax and the Weinsteins are entitled them to profits on “The Hobbit: An Unexpected Journey,” which grossed $1 billion worldwide, but not on the two sequels.

Besides Warner Bros., Miramax and the Weinsteins, the participation agreement on the first Hobbit film included  MGM, the estate of author J.R.R.  Tolkien and producer Saul Zaentz.

Warner Bros., Miramax and The Weinstein Co. declined comment.

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