The One Ring continues to rule them all.
New Line Cinema and Peter Jackson have made nice in their blood feud over The Lord of the Rings royalties, paving the way for the Oscar-winning filmmaker to oversee an epic version of The Hobbit.
"I'm very pleased that we've been able to put our differences behind us, so that we may begin a new chapter with our old friends at New Line," Jackson said in a statement Tuesday. "We are delighted to continue our journey through Middle Earth."
Jackson and his on- and offscreen partner Fran Walsh sued New Line in 2005, claiming the studio cooked the books and seriously shortchanged the couple for a franchise that looted $3 billion at the worldwide box office and won a clutch of Oscars.
The filmmaker had even issued a statement saying the ill will would keep him from shooting The Hobbit, the J.R.R. Tolkein adventure about Bilbo Baggins and his ring-discovering, dragon-conquering quest that serves as a launchpad for the LOTR series. And to the chagrin of fans, New Line cochief Bob Shaye said he'd find someone else to direct.
The project festered in development and faced an uncertain future, especially with would-be stars like Ian McKellen, who received an Oscar nod for playing LOTR's Gandalf, a part that figures prominently in The Hobbit, publicly stated their support for Jackson.
But fans held out hope as MGM honcho Harry Sloan said he was committed to brokering a truce between the warring parties and bring The Hobbit to the big screen. MGM has a big stake in the film's success, because the studio controls the distribution rights.
"Peter Jackson has proven himself as the filmmaker who can bring the extraordinary imagination of Tolkien to life and we full heartedly agree with the fans worldwide who know he should be making The Hobbit," Sloan, MGM's chairman and CEO, said Tuesday.
In September, a key ruling in the case went against New Line, with many observers predicting it would end the impasse between Jackson and the studio.
All the while, New Line has seen its own fortunes falter. Its latest expensive fantasy gamble, The Golden Compass, has underperformed at the box office and the studio has yet to greenlight the other two films in the prospective trilogy.
Financial terms of the settlement were not disclosed, but all parties expressed happiness the row was over.
"We are very pleased we have been able to resolve our differences, and that Peter and Fran will be actively and creatively involved with The Hobbit," said Shaye. "We know they will bring the same passion, care and talent to these films that they so ably accomplished with The Lord of the Rings."
"Now that we are all in agreement on The Hobbit, we can focus on assembling the production team that will capture this phenomenal tale on film," Sloan added.
It is not clear what specific roles Jackson and Walsh will play. The joint press release simply says the couple, who also produced and cowrote LOTR, will serve as executive producers of The Hobbit and "manage the production."
Jackson already has his hands full, shooting his adaptation of The Lovely Bones and with Tintin on the docket for next fall, so he apparently won't helm The Hobbit. There's no word on who will adapt The Hobbit, which will be divided into two parts for the big screen.
Likewise, no casting has been announced. Of the key actors in LOTR, only McKellen, Ian Holm (Bilbo), Andy Serkis (Gollum) and Hugo Weaving (Elrond) figure prominently in The Hobbit's storyline.
Once those details get ironed out, production will begin "as soon as possible." Like LOTR, both halves of The Hobbit will be shot simultaneously. Principal photography is tentatively set for a 2009 start, with MGM and New Line splitting the costs and sharing distribution duties.
The first film is slated for 2010 and its sequel in theaters the following year.