‘The Lord Of The Rings’ Trilogy: A Look Back At A Breathtaking Gamble 20 Years Later

Ever since Bob Shaye launched the company in 1967 to release arthouse, foreign language and cult films on college campuses, New Line Cinema had been a studio known for out-of-the box choices necessitated by being the last stop for good material. From the audacious early John Waters films like Pink Flamingos to Wes Craven’s A Nightmare on Elm Street, New Line found gems others missed, even after Ted Turner bought the studio. New Line had launched Jim Carrey with The Mask, leveled up Mike Myers with Austin Powers, and given a home to filmmakers like Paul Thomas Anderson with Boogie Nights and David Fincher with Se7en. Shaye had shown his studio to be a place of creative risk taking.

But New Line had never taken a financial risk like The Lord of the Rings trilogy. As a matter of fact, no one else in Hollywood had; three films, each with budgets of $120 million, filmed back-to-back over a protracted shoot in New Zealand. Presiding over the project was filmmaker Peter Jackson, at that time best known for small- budget flicks like Heavenly Creatures, Braindead and Meet the Feebles, whose only studio-backed project, The Frighteners with Michael J. Fox, had been a commercial failure. On paper, none of it looked like a recipe for success. Indeed, by 2001 there was a decided perception that the failure of the first film, The Fellowship of the Ring, could sink Shaye’s studio, and some of the international distributors whose presales allowed New Line to make its films.

The Cannes Film Festival would play a major role in turning around the skeptics and settling the nerves of all involved. Cannes has always been an international launchpad for films, but Shaye and Jackson came armed only with 26 minutes of footage of a film that would not be finished for months. Still, they treated it like a film premiere, with distributors and junket press brought to Château de Castellaras, a castle in nearby Mouans-Sartoux, that was transformed into Middle earth by the art departments and set designers of the trilogy. It would be another $2 million gamble for Shaye and his team. But it would prove to be an important chapter on the route to release for what would become the most successful series of independent movies ever made.

“It was Bob who came up with the idea of leaning into Cannes of 2001,” says Jackson’s longtime agent/manager Ken Kamins. “‘Let’s blow people away.’ But of course, once you decide you’re going to spend $2 million dollars on a party and treat 26 minutes like a premiere, the stakes are total. Get it right and you are on your way to something really important and powerful. Get it wrong, and you’ve made the biggest miniseries in the history of TNT.”

Twenty years on, Deadline has gathered some of the principals who took one of the most pressurized rides in all of Hollywood history, to recall the films and that memorable night in Cannes where everything clicked, presaging three straight years of blockbusters, a near $3 billion global gross, and a collective 30 Oscar nominations and 17 wins, including Best Picture for 2003’s Return of the King. Says Shaye: “If you were there that night in Cannes, it would be something you’d always remember.”

No matter what else he does, Bob Shaye will be defined by this: saying yes to Peter Jackson’s last-ditch attempt to turn J.R.R. Tolkien’s The Lord of the Rings trilogy into two films, after Disney’s Michael Eisner turned down Miramax bosses Harvey and Bob Weinstein. Other studios had also said no, and Shaye was Jackson’s last chance. The Weinsteins gave Jackson a daunting challenge: a week to shop a project that would call for them to get 5 percent of first dollar gross. If Jackson found no takers, he would withdraw, and Miramax would find another filmmaker willing to tell the sprawling tale in a single film. Shaye watched a VHS presentation and listened to how Jackson would execute his plan. And then he gave the filmmaker another no. It shouldn’t be two films, he said. It should be a trilogy; a holiday blockbuster for three years straight. It became one of the ballsiest executive decisions in Hollywood history.

“We had always been the outsider,” recalls Shaye. “Until we got to the Ted Turner financing thing, we were always the last guy in town that anybody would think of to pitch a project. On The Lord of the Rings, we had Time Warner behind us at that point, but nobody understood who we were, including [CEO] Jerry Levin, and the entire Time Warner staff. We were just kind of left over from some crazy moment that Ted Turner had. They wanted to sell us from the moment the merger took place between Time Warner and Turner.”

When Shaye read trade stories about Miramax’s plans for the Tolkien books, “I thought it was a really good idea,” he says. “Then [production president] Mike De Luca and Mark Ordesky [president of NL’s prestige film label Fine Line] came into my office one day and said it looked like Weinstein was going to make this available to the community. ‘Are we interested?’ I said, ‘Yeah, in principle, it’s going to be an incredible opportunity, but what’s the situation?’ Mark said, ‘Well one of the few things that’s really going to turn you off is that the Weinsteins personally are getting 5 percent of first dollar gross as part of the deal.’ I said, ‘To hell with that. That is definitely not happening. Not in a million years. I’m going to give Weinstein 5 percent of gross? Forget about it.’”

Shaye thought that was the end of it, but the seed had been planted. He was fond of Jackson, who’d written a treatment for one of the Nightmare on Elm Street sequels and who was close to Ordesky, sleeping on the exec’s couch when he came to L.A. from New Zealand in those early days. Jackson was making the kind of movies that fit New Line’s formula: tight-budget genre.

“I’d seen Meet the Feebles and Braindead; we were part of that subset of movie making,” Shaye says. “We were not high society, we were street people, and then Peter made Heavenly Creatures, which I thought was a really excellent movie. And then The Frighteners, which I was less enthusiastic about.”

When Ordesky told Shaye that the Weinsteins were officially seeking partners and Jackson was in L.A. to pitch Rings, Shaye took the meeting as a courtesy. He was still adamant that he wouldn’t accept the Weinsteins’ financial ultimatum, but Ordesky urged him to at least hear Jackson’s presentation. Things had changed in the period since De Luca and Ordesky first told Shaye about the potential opportunity. Time Warner had acquired Ted Turner’s company and it was uncertain how New Line fit in alongside Warner Bros. Shaye was also clashing with his wunderkind picture picker De Luca and wanted to bolster the slate.

“What happened in the interim was Mike and I were having a sort of interpersonal conflict, disagreements about operating procedure,” Shaye recalls. “My partner Michael Lynne kept saying, ‘We don’t have enough movies and where are the sequels?’ I was getting more and more frustrated with our development and more inclined to be open to possibilities because I knew that we really weren’t in such great shape for the next year or two. I was not particularly interested in proving myself to anybody but perhaps Ted [Turner]. With all of that concern in the back of my mind, I walked into the conference room to see what Peter had put together.”

Shaye was extremely impressed, not just with Jackson’s vision, but with his meticulous plan to execute it. “Peter said, ‘We don’t have to go to fancy special effects houses to get this stuff. We’ve got a little studio called Wingnut in New Zealand and an algorithm we developed so we can have big crowd scenes where all the different figures in a crowd don’t do the same thing because you’re just repeating the same technique over and over and over. We’ve developed a way that every character looks like they’re doing something different. It’s going to be a lot less expensive than going to get custom designs of every group of characters.’ The other really innovative thing was he would use forced perspective to make the hobbits small, and humans like Gandalf regular sized in the same frame. He’d do that with different focal lengths on the camera, creating the illusion that one is larger, and one is smaller. Then I saw the reel and it really worked. It was excellent.”

Shaye bought into Jackson’s vision in the room. Jackson’s budget was $60 million a film at that point, and New Line could cover that. In the time they’d been with Ted Turner, they hadn’t been questioned about their spending. “All of our films had been successful with one exception, Little Nicky,” Shaye says. “They must have thought they were dealing with sorcerers or something, but nobody ever said, ‘You can’t do this.’” In his mind, Rings could be New Line’s very own version of the James Bond franchise, with a banner blockbuster released each year.

And the 5 percent first dollar gross to the Weinsteins? “Sure the 5 percent pissed me off tremendously, but I wasn’t going to cut off my nose to spite my face,” Shaye says. “The fact that I didn’t get along with Harvey Weinstein, and that we were bitterly competitive with that company, I wasn’t going to say no. And, of course, I knew that we were the last stop on Peter’s trip. That also didn’t bother me; I’ve been insulted before.”

He had made up his mind before Jackson’s presentation was even over. “And then Peter comes in with his production designer who has these 40×60 full color pictures of the landscape and the locations in New Zealand, a place I knew nothing about. I was floored.”

There was still plenty of risk: Jackson was unproven as the director of an event-sized trilogy, and so was New Zealand as a reliable production hub. Shaye didn’t know how determined Jackson was to change all that.

“You have to know this about Peter,” says Kamins. “There was a sense of civic and national pride that he was also wearing, because he really wanted this desperately for New Zealand. The first time I ever went to go visit Peter in New Zealand, he put on one of the James Bond films. I can’t remember which one, but there was a sequence where there is a glass map of the world. Peter hits pause and says, ‘What do you see?’ I said, ‘I’m not sure what I’m looking for.’ He goes over to where Australia is, and he points. He said, ‘Take a look. New Zealand is not on that map.’ Then he looked me dead in the eye, and he said, ‘But it will be.’”

Still, the budget was a guess, and shooting multiple movies at once just wasn’t done. Studios would rather pay a premium to regroup a cast than be left holding the bag if the first one failed. Many fantasy films with franchise aspirations never got past the first film.

“That was part of the final bedding process, when Peter just happened to slip that in,” Shaye recalls. “I said, ‘Let’s do them one at a time and see how it goes.’ He said, ‘No, no, we have to do them all at once. The actors are going to be older. It’s going to take a year to get the films done and one film released. Many of these locations will require us to build roads, to bring equipment in and we’ll have to completely cut up a significant part of the landscape. The New Zealand government won’t allow us to keep those roads and the disarray.’ So, the bottom line was, there was no way around it. All three had to be made at once.”

New Line’s international chief, Rolf Mittweg, had been selling the project as a trilogy anyway, so they moved ahead, but the doubt still remained in Shaye’s mind. If the first film had been a failure, some international distribution partners would likely attempt to back out of an ongoing deal. “That was the risk but there’s always a risk, in every film,” Shaye declares. “There could be a snowstorm the day you open. The term ‘risk-free movie’ is an oxymoron. The point is, I thought that the risk was sufficiently covered by the prospects of success. It was a risk that I was willing to take, the kind of decision that people who make production decisions have to make all the time. You weigh the risk against the reward and if the balance is substantially enough in your favor, you dive off the high board. That’s just the way the movie business is.”

The pressure, though, never stopped mounting. It soon became clear $60 million wouldn’t be enough to cover the costs of production for each movie; that would have to double. It was then that Shaye began to consider the long odds of the bet he made. “Peter was either trying to blow smoke around my head or he didn’t have a clue himself, but when we sent our own production team down to Wellington to see what was going on, they came back and said the first film could not be made for anything less than $120 million,” Shaye says. “I went back to Rolf and I said, ‘We’re going to have to change the percentages and the prices that we’re getting for international because Peter just got it wrong. You can’t make this film for $60 million. It couldn’t be done. Rolf said, ‘I definitely want it and it will be fine.’ So, we went for it.”

The risk to the foreign distribution partners cannot be overstated. The deal was to buy all three, or none. “The international presales were a big part of the financing, and what we did had never been done before,” says Cam Galano, who was New Line EVP and European Supervisor and made deals under Mittweg. “Think about it. You’re a distributor, and you’re being asked to pay a very high price not for one, but three, knowing if the first didn’t work, you’re stuck, just the way New Line would be stuck financing the movies. They were very expensive at the time, and there were so many unknowns.”

Then again, indie distributors rarely get to be in the middle of films with such potential, which at the time were the domain of the major studios. “We were enthusiastic even though it seemed like a massive risk at the time,” says Nigel Green, who with his late brother Trevor built Entertainment Film Distributors into the biggest indie distribution company in the U.K., helped by being New Line’s output partner in the region. “We had to commit to three movies at the same time, it was definitely the biggest commitment to a project—one film or a trilogy. We’d made large commitments to productions, but never that size on an acquisition for U.K. rights. A lot of us were family run companies; my brother and me, and Metropolitan in France with Sammy and Victor Hadida. Decisions were made by people who love film. I don’t know that you would run numbers analytically and feel [Rings] was a safe bet. This was a bet made on enthusiasm and not technical calculations, because nobody had made a bet at that level on a trilogy, financed in the way Bob and Michael did this.”

Says Mittweg: “If you want to have high profile movies, the ones that can amass huge amounts of box office, you have to be prepared to take the risk. But three movies, when you are halfway through the first movie shoot, that’s complicated. We teased them with some footage. Japan and the Far East, we had a hard time with it because they didn’t know the books, but we got a huge number from the U.K., and they did very well.” Still, Mittweg doesn’t sugarcoat the result if Fellowship had flopped. “It would have been a suicide mission,” he says.

There was enough anxiety to go around. But it wasn’t until Shaye had committed that he had questions about the filmmaker. He travelled to New Zealand with some international buyers who were still on the fence, “I had a good faith feeling about Peter,” Shaye says. “I don’t say that you trust filmmakers all the time. I didn’t really know his mindset, but I believed in him, and that was, by the way, a big risk. You give a guy from New Zealand $120 million to make a movie and then you’ve got two more behind it. I had to think a lot about that. We decided to go to New Zealand, and Rolf wanted to take some of our key buyers who were still hesitant about buying into three pictures that were going to end up being $300 million. Peter put together a half-hour sample reel of dramatic scenes.”

As he waited for the film to be laced up in Jackson’s screening room, he looked at the posters on the wall for Jackson’s films Braindead, Meet the Feebles and Heavenly Creatures. “It suddenly struck me that this guy is making $50,000, $60,000 and $75,000 movies, cheap exploitation films, and we’re giving him $300 million dollars,” Shaye recalls. “This is really bloody crazy. I’ve almost never felt so panicked as I did at that moment. There are all these guys walking in to see this screening of some of the acting scenes to decide whether they’re going to be making huge guarantees, risking their companies. I felt like I’d been sold a bill of goods and it was too late to do anything. When we went into the screening room, I really had my heart in my hands, so to speak.”

His skepticism about Jackson’s ability to take the leap vanished in the 20 minutes it took to show the footage. “The reel Peter put together had Ian [McKellen] and Orlando [Bloom], and everybody,” Shaye recalls. “It was so good that I felt we could get the special effects and everything straightened out, bring our own people in it, do whatever was required. It was an excellent cast. It was well photographed. It was first class stuff, and so we walked out of there with confidence. We actually closed almost all of our international deals off that trip to Wellington.”

“I totally appreciate the position that New Line, Bob Shaye and Michael Lynne were in and I don’t look back on any of it and judge them remotely,” Jackson says now. “There was a lot of pressure, and they were very upset with us as the budgets went up. The anger was understandable. They aren’t the bad guys in this story; we are really the bad guys for going over budget. Eventually, it stabilized when Barrie Osborne came in as producer a few months into us shooting, when the movie was re-budgeted and realistic. We all felt a bit under siege, but looking back on it, I get it, I understand it all now much clearer.”

Being on the other side of the planet from Shaye’s nervousness probably helped, but Jackson recalls a moment where he was shooting the Helm’s Deep scenes from The Two Towers, way up in a rock quarry in Wellington, and he could see Osborne lugging a large box with a cell phone because service was so unreliable, walking because the path was impassible by car. “It was a period of time when New Line were at their most angry with us in terms of the budget,” Jackson remembers. “I am on the parapet, probably with Viggo [Mortensen], and I see Barrie. It took him about 30 minutes to huff and puff his way to get on the top, and so I kept on shooting. Barrie arrives and says, ‘I have the studio, I’ve got to connect you with Michael Lynne of New Line.’ I ask why. He says, ‘Oh, he’s going to threaten to sue you and sell the house from under you to cover the cost overruns.’ Barrie was just the messenger, but it was one of the only points where I really snapped. I said, ‘Just tell Michael Lynne that I’m shooting this fucking film and I’m doing the best job I can, and I’m not going to interrupt my day with a phone call like that.’ Barrie picked up the cellphone and made his way back down to the car and drove off.”

While Shaye could be an ornery studio boss, Jackson saw a different side of him when he completed the first film. Jackson flew to Los Angeles with the footage that would eventually be shown in Cannes, and set up a screening for Shaye at Shaye’s house. “Before it started, Bob signaled to me with his finger, you know, ‘Come with me.’ I followed him, and we went into a bathroom, he shut the door. I’m there alone in a bathroom with Bob Shaye thinking, what the hell is this? He looked at me and he said, ‘Please, Peter, please, we have all these partners, they’re relying on the success of this film. If it doesn’t work, they’re going to go under, so I just want you to know how important it is for me that we don’t let our partners down.’ And he began to cry. I mean, Bob began to sob, and it was literally the most personal moment that I ever had with him. I just said to Bob, ‘Look, I’m doing my best, Bob. I hear you, I get it, and I understand, and I’m trying to make the best film I can.’ He really cared. He was crying not on behalf of New Line. He was crying on behalf of all the international partners that they brought on board to help finance the film, the Greens and the Hadidas, all the independent distributors that had bought into the project. He was crying on their behalf, not on his own, or his own company’s behalf.”

After shooting for a year and a half in isolation, Jackson himself had become somewhat troubled with what was being written about his films, and the expectation of looming catastrophe. “People knew that three films were being shot, and a lot of press I read—and some of this was New Zealand press—would talk about how risky it was for New Line, that if the first film failed New Line would probably cease to exist, because they’d be stuck with two other films that they can’t do anything with,” Jackson says. “It is totally understandable press would speculate about the worst case scenario. These thoughts were going through our minds as well to some degree, but what bothered me is some were written as a fait accompli. ‘Fantasy is always unsuccessful at the box office,’ and, ‘New Line is taking crazy risks with this unknown director,’ so, ‘Let’s talk about the failure and how bad it might be.’”

Rather than rattling him, this criticism fueled Jackson. “I’m the sort of guy that if I read people are speculating on how much I’m going to fail, that makes me all the more determined not to fail. I thought, I’m going to show you, I’m going to work like a crazy guy to make the best films I possibly can. In a sense I’m grateful for those stories because I do look back on that as being something that really gave me the extra 10 percent to do the best job I could.”

Shaye became confident enough after seeing Jackson’s reel that he went for broke to turn around the skeptical buzz on the film and build momentum for the late-year release. Shaye decided on a Cannes premiere-style launch, unveiling 26 minutes of scenes, followed by that party staged at the historic Château de Castellaras, just outside town. Actual sets from the movie were transported to turn the venue into Middle-earth, complete with cave trolls, Ringwraiths and Frodo’s house in the Shire. It was $2 million well spent.

Jackson came to Cannes with cast and a reel that began with him and Gandalf in the wizard’s wagon to introduce footage which established the Fellowship of men, hobbits, and an elf and dwarf to deliver the ring to Mordor. Then came the entire breathtaking sequence as the group enters the underground mines of Moria, battling Orcs, goblins and the fiery demon Balrog.

“Everybody thinks the make-or-break moment of a big movie is the opening weekend, but in some respects, I think that Cannes screening was our opening weekend, certainly in terms of all these distributors being on board,” Jackson says. “The success of the movie in its initial release was going to depend a lot on the amount of effort and hard work that the different distributors put into the film, because they were all in charge of promotion and marketing in their own territories. What that Cannes screening did was it motivated and united all of them in the sense they realized this could be huge if they put in the extra effort.”

Says Kamins: “Those were high stakes, and boy oh boy, could you feel it. I don’t know if Bob remembers what I remember, which is me and Bob and Peter literally standing in the stairwell by the projection booth of the Olympia, waiting for the first screening to start. Both of them looked sick to their stomachs. They were both white as a sheet and couldn’t breathe. They literally didn’t know what was going to happen, and then the footage hit. We had a pretty good sense as people walked out, that they were buzzing, and a number of us were getting reports from significant people who would normally occupy the Croisette, both in the media and other major distributors who didn’t have the film. There was a buzz, and it was moving fast. You could feel that something important was happening.”

Says Galano: “If I had to choose a word to describe the buyers, it would be… euphoric.”

“Sammy Hadida, who has passed away but who was head of French distributor Metropolitan, saw me in the lobby and literally picked me up off the ground and kissed me on the mouth, he was so excited,” recalls Ordesky. “I thought his face would break from smiling so big.”

Hadida’s brother Victor credits that screening with turning their nerves into excitement. “[There was] a sense it would change not just our company, but everyone involved,” he recalls. “We sat alongside the press, all of us experiencing it at the same moment. Then, the acute sense of being in the world of the movie at that party with 1,000 people. They recreated the Shire. It was incredible relief, mixed with excitement.”

Aside from turning around the buzz, Jackson says Cannes helped everyone focus on finishing. It was also a revelation for actors who’d spent one and a half years acting in green screen. “We had most of the principal cast there—the Hobbits, Ian McKellen, Viggo Mortensen and Liv Tyler and it was the first time they’d seen finished work,” Jackson says. “Imagine being Elijah Wood or Ian, and you’d shot the mines of Moria scene in New Zealand probably a year and a half earlier with green screens, running around the studio shouting at things. When Ian confronted the Balrog, he was on a green screen stage looking at a tennis ball. And then you’re suddenly seeing the finished sequence scored with all the visual effects. It wasn’t just the distributors or the press, it was the actors themselves getting a sneak preview in May of what this finished movie in December might be like. I just remember them all being very, very excited that all that work in New Zealand was going to pay off.”

Elijah Wood was a teenager when he put together an unsolicited audition tape that got him in the room with Jackson and Walsh and won him the Frodo role. He says Cannes made it clear to the entire cast this might be something special. They’d been cocooned in New Zealand in a way that insulated them from the insecurity and budget concerns, but seeing Middle-earth realized onscreen for the first time brought a level of excitement he hadn’t expected. “It showed so many things,” he says. “The level of artistry that Weta Digital and Peter’s team were capable of in bringing that cave troll to life in a way that felt genius. To feel that palpable buzz of excitement in the air was wonderful. It became real. And the party, with cave trolls and Ringwraiths on horseback? It was extraordinary, and I have not seen anything like that since.”

Shaye could feel the shift when, later, he showed the footage to Time Warner’s Levin, who asked him what territories were still available. “I told him Germany might be available and he said, ‘I’m going to take it directly to our international people and I hope we can buy it.’ I felt vindicated in the sense that we were always the little jerks nobody cared about, and all of sudden, they’re looking for our product. That was quite satisfying.”

Sean Astin, who played Frodo’s Hobbit companion Samwise Gamgee, feels that the reel and reaction elevated the scope of the marketing campaign. “The Cannes Film Festival showed what we knew, that the film was spectacular and we had created something that would stand the test of time,” he says. “It filtered up, down, and all around. I remember the initial marketing campaign sort of missed the mark, treated it as kind of a Dungeons & Dragons thematic approach and missed the classical feel. I remember all of us, our hearts were sinking because we’re like, ‘Oh, no, maybe the studio or the marketing folks are expecting something different than what we think we’ve created.’ After Cannes, they got it right. The posters of just Elijah with his hands and a huge ring in it, on bus stops and everything else. You didn’t know if this would translate to box office success, and I watched Bob Shaye and Michael Lynne sweating it.”

The rest, though, is history. While acrimony and lawsuits between New Line and Jackson would follow—Shaye exited the studio he founded not long after the Oscar haul and indie record gross of nearly $3 billion—Shaye looks back on his big gamble with fondness.

“Except for the unfortunate imbroglios, which I hasten to add I had nothing to do with—that came about after the fact and was just about the hubris that develops in organizations when they think they’re on top of their game—I’m very proud of what happened,” Shaye reflects. “I’m extremely fortunate and proud that Peter did such a great job. This really was lightning in a bottle; I never experienced anything like it and of course I look back on the whole thing—or most of it—with great satisfaction and a modest but intense smile on my face.”

Asked how he gauges the risk Amazon Studios is taking spending $460 million for a Lord of the Rings series that doesn’t have Peter Jackson, Shaye declines to answer directly. But it seems he would not be one to bet against Tolkien’s Middle-earth. He says, “I wouldn’t try to second guess them at all. I just wish them well.”