Chapter 346: The New Line Dilemma

In the morning, Charles Capet, having spent the night at the Malibu Beach Resort with Gal Gadot, drove her back to the Hilton Garden Inn.

"Hey," Gal Gadot said after a heated kiss in the car, "Charles, remember to call me when you get a chance!"

Charles smiled and nodded, giving her an OK gesture before driving his Mercedes SL600 straight to Capet Pictures' headquarters.

Later, he received news that Capet's Japan headquarters, located in the Shibuya district of Tokyo, was officially operational.

"Charles, many movie companies have already started reducing the number of films they're producing because of a sudden decrease in funding from Wall Street. Everyone needs more overseas capital to support their film projects," Donna Langley said, handing Charles a rough schedule of major film projects for the next two years.

Charles glanced over it; the number of films indeed had significantly decreased, focusing mainly on small to mid-sized independent film projects.

"It looks like the independent film business is going to face a major crisis. All the primary resources are being invested in big productions," Charles said, tapping the table with his fingers.

"New Line Cinema is also in big trouble. The Golden Compass premiered in North America at 3560 theaters, but its opening weekend grossed only $26 million!" Donna Langley shrugged. "The reviews are terrible too. The Golden Compass had a production cost of $180 million and spent at least $60 million on distribution and promotion."

Charles smiled, "The Golden Compass seems to be doing okay in international markets, but it's not enough to make up for the losses."

"New Line doesn't have its own distribution channels overseas. They've run into issues with pre-sale contracts for unreleased films, and Robert Shaye and Michael Lynne are in hot water."

Robert Shaye and Michael Lynne were the CEO and president of New Line Cinema, respectively.

Pre-sale contracts for unreleased films are a crucial financing method for film companies, involving overseas pre-sales, cable TV, and pay-per-view among other things.

"In 2004, film producer Saul Zaentz was the first to sue New Line, claiming they had defrauded him of $20 million in royalties. The case was settled out of court a year later.

Then in 2005, Peter Jackson's team, the director of The Lord of the Rings, also sued New Line over profit-sharing. Both parties settled the case this year. Peter Jackson is also the producer for New Line's development of The Hobbit."

Donna Langley sighed as she spoke. Adapting The Lord of the Rings novels was indeed complex!

Saul Zaentz was the first to purchase the rights for The Lord of the Rings and The Hobbit and produced the animated version of The Lord of the Rings. He also owned the rights to the characters from The Lord of the Rings and The Hobbit.

"Now, New Line is facing a third lawsuit. The Tolkien Estate, along with the original novel's publisher HarperCollins from the UK, has filed a lawsuit in the Los Angeles Superior Court, accusing New Line of unpaid revenue shares for The Lord of the Rings trilogy.

According to the contract, New Line should pay them a percentage of the total revenue from the global box office, DVDs, and related merchandise of The Lord of the Rings trilogy."

"Saul Zaentz's team, Peter Jackson's team, and now the Tolkien Estate are taking turns suing New Line," Charles chuckled.

"Now The Golden Compass has flopped spectacularly. In recent years, New Line hasn't had many high-grossing films, with Rush Hour 3 being a minor success this year."

Lawsuits are expensive, and the development of The Hobbit is likely to be put on hold, as the rights negotiations haven't been resolved.

"So New Line is, quite literally, in a state of internal and external turmoil. Time Warner is internally discussing merging New Line with Warner Bros.," Donna Langley said regretfully. After all, New Line had enjoyed over forty years of independence.

Everyone knew that after the restructuring, whether New Line could still produce films on its own, the number of films would undeniably be greatly reduced; losing overseas distribution and marketing rights would be unavoidable. Warner Bros. would undoubtedly take over those operations.

It's similar to how Matrix Pictures, a subsidiary of Capet, has its films' overseas distribution and marketing managed by Capet Pictures.

"The winter for independent film companies has arrived. New Line's fiasco with The Golden Compass is just a trigger. Economic downturns, continued decreases in DVD sales, endless lawsuits, and now the disaster of The Golden Compass, New Line can't hold on anymore!"

Charles wasn't very concerned, "By the way, New Line will definitely have massive layoffs. Michael Lynne, the company's president, seems competent. I'll see if he's interested in becoming Capet's COO."

Charles felt he had too many responsibilities at Capet Pictures, and bringing in Michael Lynne to support Donna Langley wouldn't be a bad idea.

As for Robert Shaye, New Line's founder, he was too old. He should retire and enjoy his later years.

"Michael Lynne, got it!" Donna Langley agreed. She indeed needed heavyweight assistance since Charles often disappeared for months at a time.

In terms of experience and qualifications, Michael Lynne was capable enough to be the COO of Capet Pictures.

...

Meanwhile, Nicole Kidman and her agent, Pat Kingsley, sat in her villa in Brentwood, feeling the heavy atmosphere.

The failure of The Golden Compass was evident, and Nicole Kidman's reputation as box office poison was becoming more and more cemented.

With her visible baby bump, Nicole Kidman frowned, "Pat, what do we do now?"

Pat Kingsley had no good answers. Since terminating her contract with Tom Cruise in early 2004, she had focused all her efforts on managing Nicole Kidman's career.

Despite winning an Academy Award for Best Actress, Nicole Kidman couldn't break free from the box office curse. Whether it was big commercial films or low-budget indie films, they all failed at the box office, and the reviews were mixed.

"Nicole, just focus on your pregnancy for now. We'll wait for Australia to come out next year, and I'll continue to work on getting you more opportunities," Pat Kingsley said, now worrying about Nicole Kidman's future film projects.

After all, Nicole Kidman's reputation as box office poison was pretty much set in stone now.

"Alright, I understand," Nicole Kidman waved her hand, remembering that Charles Capet had once said he would help her.

As for Harvey Weinstein, though he had also reached out, Nicole Kidman would never choose someone like him.

Charles Capet was the Hollywood golden boy touched by God!

*****

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