In what comes as fuel for the upcoming strike with AMPTP (Alliance of Motion Picture & Television Producers and the Writers Guild of America), New Line are still trying to keep fudged numbers fudged by failing to provide important documents in the suit against them by Peter Jackson. According to Jackson, improper accounting methods on the film cost the director some that was owed to him.
New Line Fined $125K for Fellowship Suit
Though $125K sounds like a lot less than what Jackson is assuming New Line still owes him, that is the amount U.S. Magistrate Steven Hillman ordered the studio to pay for failing to provide documents related to the film's revenue stream.
Hillman said in the ruling that New Line may have destroyed documents and failed to search for documents and emails it was required by the court to produce, and cited a number of examples in which the searches were "haphazard."
The AMPTP's current proposal is to revamp the common payment method in Hollywood, where the talent would only receive payment after basic costs were covered. The only problem with this is that a good accountant can fudge enough numbers to ensure that the books show that a production is working at a deficit.
The AMPTP has insisted that its members can no longer operate under a system of deficit financing, contending that soaring costs and fast-changing revenue landscapes requires a change in the four-decade-old residual system.
A couple good examples of the weaknesses of this system can be found in Chicago and the TV series The Simpsons, both of which claim deficits due to their accounting practices.
Thanks to New Line's inability to work with the court, they have been instructed to retain a document retrieval vendor within three weeks.