Studios Dump Jackson's Halo

Has Peter Jackson lost his Halo?

Citing a skyrocketing budget and Jackson's unwillingness to scale back his paycheck, Universal Pictures and 20th Century Fox have bailed on the Lord of the Rings mastermind's big-screen adaptation of Microsoft's hugely popular videogame, casting a shadow over the would-be franchise's future.

Universal and Fox created a big stir in the summer of 2005 when they announced they had clinched a deal with the Kiwi filmmaker to develop Halo into a must-see summer blockbuster.While Jackson and longtime partner Fran Walsh came aboard to executive produce and develop the script by Alex Garland (28 Days Later), the Oscar-winning director had no plans to helm the project, instead tapping pal Neill Blomkamp to make his feature directing debut.

According to Daily Variety, Universal and Fox were supposed to pay Microsoft a $5 million advance for the film rights by Oct. 15. The Redmond, Washington-based software company also stood to earn up to 10 percent of the movie's box-office gross and other ancillary-related income; likewise, Jackson and his team were due to receive a hefty upfront salary and a cut of the film's profits.

But on the eve of the deadline, amid unconfirmed reports that the film's budget was closing in on $200 million, Universal, acting on behalf of both studios, requested Jackson take a pay cut. When he balked, the studios walked.

Microsoft, however, insists the game isn't over yet, and the project will go forward with Jackson and his team in place.

"We are disappointed that Universal wanted to significantly renegotiate the financial points of the deal," the software giant said in a statement.  "We are already in discussions with potential partners who recognize the value of the Halo brand."

Meanwhile, Ken Kamins, a publicist for Jackson and Walsh, fervently disputed that the film's costs were becoming prohibitive.

"The only budget the filmmakers ever spoke about was $145 million less than the 12.5 percent rebate that you get from shooting in New Zealand, which would put it at about $128 million," the publicist said in Variety.

Kamins claimed that the studios were trying to strong arm Jackson and Walsh with the 11th-hour demand, a move that turned into a dealbreaker."

They waited until the last minute to have this conversation," he added.  "Peter and Fran, after speaking with their producing partners and with Microsoft and Bungie [the game studio that designed Halo] respectfully declined."

Reps for Universal and Fox declined to comment.

Kamins said that Jackson has begun preproduction work on the film at his WETA workshop in Wellington. The rep also shot down speculation that the studios were nervous about Jackson handing a 27-year-old neophyte like Blomkamp the reins to a costly production.

"Everybody is supremely confident in Neal," Kamins said. "Part of what excited Peter and Fran was Neal's vision. We're very confident this film will move forward with the creative partners intact, who will take the film to production."

Halo is still tentatively slated to hit theaters in 2008.

Meanwhile, Jackson and Walsh last month announced plans to join forces with Microsoft Game Studios to launch the couple's own videogame division, Wingnut Interactive Studio, to hatch new titles for the Xbox 360 and Xbox Live.

First up is a collaboration with Bungie Studios to create and develop a new Halo adventure to follow-up next year's Halo 3 and timed to accompany the movie's release. Also in the pipeline is an original game property for the next-generation Xbox 360.

Aside from Halo, Jackson is executive producing Dambusters, an effects-heavy remake of the World War II aerial battle drama, also due out in 2008. The project, which will be released by Universal, is seen as easily translated into another game title.

As for his next directorial effort, Jackson is adapting Alice Sebold's ghost story, The Lovely Bones, set for a 2007 release. He recently optioned Temeraire, a set of fantasy novels about dragons in the Napoleonic Wars. Jackson has also  expressed hope to one day return to Middle Earth to helm The Hobbit, once MGM can sort out the legal issues regarding the rights.