'Lord of the Rings' rights win producer an easy £94m

Variety reported yesterday that Mr Zaentz, who had nothing ultimately to do with Peter Jackson's wildly successful movie trilogy, had been paid a thumping $168m (£94m) by New Line Cinema as part of a settlement designed to ward off a full-blown jury trial, which would otherwise have started last month.

It was, the entertainment newspaper said, the biggest payday earned by a producer for a film or series of films he did not even produce.

The settlement, which may ultimately involve further compensation for Mr Zaentz because of a secondary dispute over royalty payment calculations, was the latest twist in an increasingly ugly battle over the spoils from The Lord of the Rings trilogy. It took almost $3bn in global box-office receipts and is still raking in profits, thanks to DVD sales and other secondary marketing opportunities.

New Line Cinema feels it is entitled to the lion's share of the profits because it took the biggest risk, committing to all three films ahead of time and putting $180m up front at a time when fantasy was as unfashionable a genre as light opera.

But that aggrieved many involved, including Peter Jackson, the director, and his producer-wife Fran Walsh. They have sued New Line claiming they have been short-changed on their share of revenue from home video, merchandising and video games related to the film.

Mr Zaentz is a revered figure in Hollywood, responsible for relatively few films although almost every one has been wildly successful, everything from One Flew Over the Cuckoo's Nest in 1976, to Amadeus (1984) and The English Patient (1995). His acquisition of J R R Tolkein's trilogy led to an unsuccessful cartoon version of the first of the three books in 1978, after which film industry believed the Rings cycle was nearly unfilmable.

The idea was revived in the mid-1990s, when Mr Jackson approached Miramax films for seed funds. But Miramax was forced to let go of the project after Disney, its parent company, said no because of the the anticipated high cost.

So Miramax stuck on legal stipulations and allowed it to be shopped around. Those stipulations have become the stuff of many of the lawsuits, including Mr Zaentz's. His name and that of Miramax are on the credits (and in the Oscar nominations) but they were not involved in production.

But quite how the $168m figure, almost enough to make the trilogy again, was reached remains unknown.