No 'Hobbit' for Lord of 'Lord of the Rings'

Nov. 22, 2006 — -- The creative force behind the wildly popular "Lord of the Rings" films says he will not take part in the filming of the eagerly anticipated JRR Tolkien story "The Hobbit" or another Lord of the Rings prequel -- leaving legions of fans worldwide shocked and disappointed.

It's not that director Peter Jackson doesn't want to make the films -- something he says he fully expected to do until very recently.

But Jackson says a bitter legal dispute with film company New Line has now made that impossible.

On the fan Web site theonering.net, Jackson and producing partner Fran Walsh write that New Line contacted them to say the company "would no longer be requiring our services on the Hobbit and the LOTR 'prequel.' This was a courtesy call to let us know that the studio was now actively looking to hire another filmmaker for both projects."

At its heart, the dispute is about money.

The three Lord of the Rings films reportedly brought in global box office profits of nearly $3 billion. The Oscar-winning director claims New Line withheld profits from the first part of the "Lord of the Rings" trilogy.

In his ongoing lawsuit with New Line, Jackson says the two parties have a difference of opinion about certain accounting practices and he has asked a third party to intervene.

Until the issue is resolved, Jackson says he could not in good faith move forward on the project.

"It's that passion, and passion alone, that gives the movie its imagination and heart," Jackson writes. "To us it is not a cold-blooded business decision."

A spokesman for New Line refused comment on the matter to ABC News and others, but according to Jackson the company says the reason for moving forward is that the studio's rights to the film are about to expire and so the clock is ticking to get the film into production.

Industry watchers say it may not be that clear cut.

"It's just Hollywood blustery. This is Hollywood, if you can make up with someone you try to make up with someone," says Michael Speier, managing editor at Variety.