As you'll recall, Peter Jackson's movie versions of the LORD OF THE RINGS trilogy made mountains of money, swept the Oscars for the last film, and will probably continue generating capital via DVDs for as long as people watch movies. Those who know the source material will also recall that there is a prequel, THE HOBBIT, which has been adapted to the stage and to an animated special, but which is still ripe to be translated into film. The ideal situation would be for Jackson to make a HOBBIT film, with Ian McKellan as Gandalf and some other members of the LOTR cast who are in the earlier story, and make everyone involved a dragon's hoard more money.
But alas, pending litigation looks to prevent it. Jackson and New Line pictures are in the courts, with Jackson disputing the cut of merchandising ducats paid him and seeking an accounting. New Line purportedly refuses, although the suit's been through an attempt at mediation. Meanwhile, New Line's option on the property is set to expire around 2008, so if the company doesn't make a movie it will forever lose out.
Logically, New Line should pay Jackson the money he seeks -- regardless of whether it thinks it will ultimately prevail -- so that it can get Jackson working on a movie that will make it far more money. There is no incentive for Jackson to back down; he may want to make this one, but if he doesn't he's got the original trilogy and KING KONG too. And although he may have enough money now to buy all of New Zealand and part of Antarctica, I can see him sticking to his guns if he believes New Line went back on a deal.
So the question is which will win out in the eternal battle of he two strongest motivating forces in show biz --pride and greed.
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