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Warner Brothers, MGM Said to Start Production of `Hobbit' in February
Metro-Goldwyn-Mayer Inc. and Time Warner Inc.’s Warner Bros. film studio plan to start production on “The Hobbit” in February after financing delays, three people with knowledge of the situation said.
MGM was able to raise its half of the financing for the shared production costs of the two-installment story based on J.R.R. Tolkien’s “The Hobbit,” said the people, who declined to be identified because the agreement is private. Production expenses may reach $600 million, two of the people said.
“The Hobbit” has faced numerous delays this year including the withdrawal of director Guillermo del Toro in May, a fire at a production studio where parts of the movie were to be shot and uncertainty surrounding MGM’s efforts to restructure its debt. The fantasy adventure, which takes place before the “Lord of the Rings” trilogy, will be released in 3-D.
Peter Jackson, who directed the “Lord of the Rings” films, will direct and produce “The Hobbit.”
Susie Arons, a spokeswoman for Los Angeles-based MGM, declined to comment. Candice McDonough, a spokeswoman for Time Warner’s New Line label, didn’t respond to a request for comment. Jackson’s manager, Ken Kamins, and his attorney, Peter Nelson, didn’t return phone calls.
The production timing is tentative. It depends on the resolution of a labor dispute and may also be affected by MGM’s restructuring efforts, one of the people said.
The decision to move forward with production was reported by the New York Times today.
Labor Squabble
Entertainment industry labor unions, including the Los Angeles-based Screen Actors Guild, are urging members to reject non-union jobs on “The Hobbit” films. The guild issued a memo to its members asking them to boycott the project in support of efforts by New Zealand Actors Equity and Media Entertainment and Arts Alliance, based in Australia, the website Deadline Hollywood reported last month.
Jackson, in a statement also issued last month, threatened to move production to another country, the website said.
The “Lord of the Rings” trilogy took in a total of $2.91 billion in global theatrical ticket sales, according to Box Office Mojo, a researcher based in Sherman Oaks, California.
The “Hobbit” may provide two new blockbusters for Time Warner, which is releasing the final installment of “Harry Potter” next year, and would provide a revenue boost for MGM, which has been working to restructure $4 billion in debt.
Time Warner, based in New York, rose 38 cents to $31.79 in New York Stock Exchange composite trading. The shares have gained 9.1 percent this year.
To contact the reporters on this story: Ronald Grover in Los Angeles at rgrover5@bloomberg.net; Sarah Rabil in New York at srabil@bloomberg.net.
To contact the editors responsible for this story: Anthony Palazzo at apalazzo@bloomberg.net; Peter Elstrom at pelstrom@bloomberg.net.
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