It\’s famously, umm, how shall we put this, intricate.
The family of JRR Tolkien is suing the studio behind the Lord of the Rings trilogy for £75 million claiming they have not received "even one penny" from the films.
Bonnie Eskenazi, the lawyer for the Tolkien Trust, said: "I cannot imagine how on earth New Line will argue to a jury that these films could gross literally billions of dollars, and yet the creator\’s heirs, who are entitled to a share of gross receipts, don\’t get a penny."
JRR Tolkien negotiated a lucrative long-term deal when he finally sold the film rights to the works in 1969. He received about £100,000 and a percentage of the royalties.
The trust, which manages the estate, is seeking 7.5 per cent of gross revenues after deduction of certain costs.
I\’m sure the studios have now moved on from mere prestigitation into the realms of hyper-accounting, but the classic method was to state that "certain costs" included "overheads". But the allocation of overheads was something left to the studio accountants. Anything and everythng, the kitchen sink, the coke for starlets at producer parties, the development deals with this star and that….all would be loaded onto the accounts of a film in danger of showing a profit. Something truly successful might pay 50% of all running costs of the studio for the year. Thus, regrettably, it would turn a profit.