Why Peter Jackson’s Trilogy Was One of Hollywood’s Riskiest Projects Ever

By Tim Gray Plus Icon

THE LORD OF THE RINGS: FELLOWSHIP OF THE RING, Ian McKellen, Elijah Wood, 2001
©Warner Bros/Courtesy Everett C

After success with several small-scale films, Peter Jackson in 1992 told Variety he was looking for a project “that will really push me.”

He found something that surpassed everyone’s expectations. This month marks the 20th anniversary of Jackson’s “The Lord of the Rings: The Fellowship of the Rings,” which kicked off the 2001-2003 film trilogy based on the books by J.R.R. Tolkien.

In 2000, Jackson told Variety “LOTR” was “the Holy Grail of filmmaking, a once-in-a-lifetime experience.”

In retrospect, handing this massive project to Jackson seems like a no-brainer: great material for a great filmmaker. But in fact, there were so many unknown factors that it was immediately recognized as one of film history’s greatest gambles.

“I read ‘Lord of the Rings’ first as a 17-year-old,” Jackson told Variety. “I wasn’t one of those avid fans who read it every year. Fran (Walsh, his collaborator and partner) and I were childhood fan of the ‘Sinbad’ movies, ‘Jason and the Argonauts,’ and movies like that,” he says, referring to the great Ray Harryhausen adventures that relied on stop-motion animation for fantastic effects.

“Our first idea was to do ‘The Hobbit’ as single film, then if that worked, do two ‘Lord of the Rings’ movies. I’m glad we did it this way. Tolkien’s works are in two different styles: ‘Hobbit’ was written as a children’s book and ‘Lord of the Rings’ obviously wasn’t.”

Jackson and Walsh had been thinking about a film adaptation for years, but it seemed like a remote dream: Various Hollywood companies had held the rights since the 1960s, after the three “LOTR” volumes were published between July 1954 and October 1955.

“Around 1995, the time of ‘The Frighteners,’ Fran and I began writing an original story,” Jackson recalled. “We kept referring to Tolkien’s books, which were such a benchmark as we attempted to write an original. So we finally thought, ‘Why don’t we inquire about rights to these books?’ I assumed they would be tied up and impossible.

“We called up Harvey (Weinstein, head of U.S.-based Miramax), since we had a first-look deal with him. We said ‘We don’t know who has rights’ and it turned out the rights were held by Saul Zaentz, whom Harvey had just bailed out on ‘The English Patient’ (1997). Fate steered us there.” (“English Patient” was in danger of shutting down as funding collapsed; Weinstein and Miramax gave the film the needed cash.)

Jackson, Walsh and Miramax worked out a deal for the Tolkien books.

“LOTR” was developed as two films, but Weinstein later changed his mind and wanted to combine three books into one film. Jackson and Walsh resisted and were given three weeks to find a new film company.

In 1998, Variety reported, Jackson pitched two “Lord of the Rings” films to New Line Films; chairman Bob Shaye was impressed and said “Let’s do three.” Shaye also greenlit the idea of filming the three simultaneously.

Jackson’s first films had been “Bad Taste,” “Meet the Feebles” and “Braindead,” low-budget movies that he called “splatoons” while Variety described them as a mix of “gore and guffaw.” He gained international attention for 1994’s “Heavenly Creatures,” but it was still considered an arthouse film.

When Mark Ordesky was a junior exec at New Line, he “struck up a rapport with the innovative but bizarre Kiwi helmer,” Variety reported. (When Jackson was in L.A., he sometimes slept on Ordesky’s couch.) By the time the trio of films was greenlit, Ordesky had become head of Fine Line, the specialty division of New Line. And he was given added duties. As Variety reported in 1998, “Fittingly, Ordesky was instrumental in bringing Jackson to New Line” for ‘Rings,’ adding he would oversee production.

New Line was always a maverick company. Shaye started out by distributing films like the outrageous “Pink Flamingos” and the campy “Reefer Madness.” The company struck gold with “Nightmare on Elm Street” and “Teenage Mutant Ninja Turtles,” so Shaye was comfortable with taking chances, but “LOTR” was conceived on a much bigger scale than ever before.

There were three crucial steps for the trilogy: gathering funding; then the massive production (in the hands of a filmmaker who was best known for small-scale films); and third, marketing it to the public, many of whom had never heard of Tolkien.

Jackson and Walsh worked closely with Philippa Boyens, who collaborated with them on the three screenplays. (Stephen Sinclair also was a writer on “The Two Towers.”)

They and the team behind Jackson-Walsh’s WingNut Films also were backed by Hollywood’s powerful and intelligent agent (now manager) Ken Kamins; the New Liners also included Michael Lynne, co-chairman and CEO; Rolf Mittweg and Camela Galano, who oversaw international; and Gordon Paddison with his Stradella Road company, who was key in the films’ groundbreaking online campaign.

Step 1: Funding

Major studios typically have their own worldwide distribution arrangements. But the smaller New Line regularly dealt with a fellowship of distributors in other countries.

“In late 1999,” Variety reported, “Mittweg faced the task of persuading 25 distributors that in order to have a blockbuster, they would have to pony up some $160 million in advance.” Mittweg also had to get agreements for a worldwide day-and-date release, which was trickier than it is today.

Mittweg told Variety’s Don Groves that every buyer had to commit to all three films. “Mittweg calculates that the international pre-sales will cover about two-thirds of the production budget — a remarkable feat given the sums involved.”

New Line was risking a lot, but those distributors were flirting with bankruptcy and/or closure if the films didn’t perform.

As Variety reported Oct. 16, 2000, “The clincher for most distribs who came aboard was a visit to the Wellington set orchestrated by New Line … About 20 distribs met with director Peter Jackson and key cast members and were shown 30 minutes of footage, minus special effects.” New Line also sent about 20 reps of the major U.S. theater chains to stimulate their interest.

Step 2: Production 

Principal photography began on Oct. 11, 1999, and took 274 shooting days. Doing three films simultaneously was a practical decision. Jackson and Walsh had scouted some stunning New Zealand locations that were remote; this meant special roads had to be built to access them, and the roads would then be erased, to restore the sites’ original condition. It didn’t make sense to do that three times.

When he leapt from microbudget to mega-scale films, Jackson seemed to know how to handle the pressure. Ordesky recently told Variety that if the studio or international executives got nervous, Jackson would repeat his mantra: “One job at a time, every job a success.”

Jackson also told Variety, “I like to have fun on the set, to set a tone of calm. I like to be calm and have a few jokes.”

Ian McKellen, who was Oscar nominated for Gandalf in “Fellowship,” said: “Some directors are authoritarian, ordering you what to do. That’s not Peter. He knows what he wants but does it in a gentle way. If he says it’s perfect, you utterly know you can move on.”

Ordesky — who’s now co-topper of the multimedia company Court Five, which produces the reality competition “The Quest,” among other projects — says of Jackson, “He personifies the New Zealand culture: humble, friendly and full of can-do ingenuity.”

McKellen adds: “You can’t imagine Peter without Fran. They make a home together, she’s always there. It’s absolutely a family making that film; it’s a real partnership.

“We were working in an old paint factory, which was 10 minutes from where Peter and Fran live; it felt like we were making a home movie. There was no soundproofing, no heat; it was either very cold or noisy and we had to wait for airplanes to pass. I thought he was a bit mad.”

Sean Connery was also considered for Gandalf, while Viggo Mortensen started filming a few weeks later after Stuart Townsend was replaced. Elijah Wood, Orlando Bloom and Cate Blanchett were among the other actors who made their way to New Zealand.

In the midst of filming, Jackson praised cast and crew to Variety: “They have remained undaunted. They have been magnificent.”

Ordesky was on location for most of the filming and nearly every day of post-production, which lasted three years. He also flew back to L.A. regularly with new cuts of the movie throughout post-production to show the New Line execs.

Lazy loaded image
The three lavishly-produced “Lord of the Rings” films ended up costing more than $300 million to make.Courtesy Everett Collection

Step 3: Marketing

The Cannes Film Festival, which attracts 10,000 press members annually, was targeted to kick off the global marketing. On May 10, 2001, New Line screened 26 minutes of footage for distributors and press, who were wildly enthusiastic.

When the screening ended, managers of the Olympia theater needed to get ready for the next festival screening, but audience members wanted to linger and talk. After standing in the aisles, they were asked to move to the lobby, then the street. This was highly unusual. With less than a half-hour of footage, it became one of the most talked-about films at the 54th Cannes Festival, which also screened “Moulin Rouge,” “Shrek” and “Mulholland Drive.”

The international press had been skeptical: No previous film about wizards and elves (“Willow,” “Legend,” “Dragonslayer”) had been a blockbuster, but the distributors needed it to be a hit.

The footage exceeded expectations: It wasn’t twee, it wasn’t cute. It was epic yet intimate. As Jackson later told Variety, “Tolkien created fantasy but not in a condescending way. The books have a historical weight to them. He didn’t treat it as fantasy, and that’s what appealed to us: to make a fantasy as a historical piece. We tapped into ancient Roman, Greek and Norse cultures; we never tried to make anything up, we tried to base it on parts of our world.”

At Cannes, there were a few days of interviews with the filmmakers and actors. On May 13, 2001, New Line threw a Middle-earth party; buses brought 1,500 guests from Cannes hotels to the hilltop Chateau Castellaras that included sets from the film and costumed actors. The lavish party, at an estimated cost of $2.5 million, cemented the impression: This project was big and a winner.

In retrospect, the Cannes strategy seems like an easy decision, but it was risky: First impressions are important and festgoers are often exhausted, barraged with promotions of new films.

Despite the triumph, the marketing team had new challenges. Though Tolkien’s books have sold an estimated 150 million copies and been translated into at least 38 languages, New Line had to reach beyond the “true believers” of his works.

Russell Schwartz, the company’s domestic marketing president, told Variety at the time, “New Line’s research showed that, alarmingly, only 20% of the marketplace had any idea what the 50-year-old books were about.”

There was added pressure to succeed, since New Line and sister company Warner Bros. had a new owner, AOL.

In a New Yorker interview at that time, AOL’s Gerald Levin cited the first “Harry Potter” film as the pinnacle of corporate synergy, with soundtrack, merchandise, and online presence. Levin didn’t even mention “Lord of the Rings,” even though licensing deals were in place and the “LOTR” website had 1 billion hits before the first film opened.

The website was a key element in the films. Jackson knew the importance of press events like Cannes, but as senior exec VP of strategy and operations for New Line Carolyn Blackwood observed: “While Peter Jackson is warm to reporters, the press is not a priority … He would rather directly interact with his fans. He knows who his fans are and how to reach them. He is very reverential of their needs.”

McKellen added: “Peter always said he was making the films for other fans of Tolkien. He and I were blogging, to contact the fans, to reassure them that Tolkien was in good hands.”

“Fellowship of the Rings” opened three months after the 9/11 attacks. Many in Hollywood were concerned how audiences would react to films about warfare and conflict; the New York Times had predicted a flood of cheery, “Sound of Music”-style movies. But Variety’s December 2001 “Fellowship” review said, “With the world newly obsessed with the clash of good and evil, the time would seem ideal for ‘The Lord of the Rings.’ ” The reviewer praised it as “an epic by any standard, that looks to please the book’s legions of fans with its imaginatively scrupulous rendering of the tomes’ characters and worlds.”

New Line’s Schwartz said, “We never tested the first film, and we were biting our nails right until the moment it opened.”

“Harry Potter and the Sorcerer’s Stone” (aka “Philosopher’s Stone”) earned $974.7 million and “Fellowship” earned $880.8 million, making them the top two films of the year. (AOL, which paid $182 billion for WB, marked a $99 billion loss, Levin resigned and AOL eventually sold WB.)

In 1998, Variety reported the budget for the “LOTR” trio was $130 million. By the time filming began in October 1999, it became $200 million. After the success of the first film, more money was allotted to the next two and by 2004, estimates for the three was in the low $300 millions.

The trio earned $2.99 billion at the box-office. (As a bonus, the three “Hobbit” films, from 2012 to 2014, earned $2.93 billion).

But Jackson’s success goes beyond numbers. His visionary work changed the scope of film storytelling and created new ways for adults and children to dream. He and his team also revolutionized the visual-effects industry.

He also helped end the perception that big-scale filmmaking was Hollywood-centric and that Hollywood was the only true gauge of international success.

Plus, Jackson accomplished something no other filmmaker has ever done: He significantly improved his country’s economy, by boosting both filmmaking and tourism.

The three “LOTR” films earned 30 Oscar nominations, with 17 wins. On Feb. 29, 2004, “The Lord of the Rings: The Return of the King” won 11 Academy Awards; it was only the third film to earn that many (after “Ben-Hur” and “Titanic”) and was the only one to win in every category.

As Variety reported the following day, “It’s easy to forget how long a road it was to its 30 Oscar noms — and what a longshot the franchise was.”