From Matt:

Kinowelt is knocked out of the ‘Ring’
First pic in trilogy to be released under new arrangement
Variety Magazine, October 16th

In a blow to ailing German distributor Kinowelt, Warner Bros. will immediately assume distribution of New Line Cinema features in all German-speaking territories, Eastern Europe and Russia.

While the shift was anticipated (Daily Variety, Aug. 30), Kinowelt had planned on releasing Peter Jackson’s first installment of “The Lord of the Rings” trilogy, “The Fellowship of the Ring,” in December. That film will now be the first title under the new arrangement.

Despite its financial woes, Kinowelt has been stretching to hold on to the epic. Although the distrib recently managed to pay its last $9 million installment to New Line for the pic, there were growing doubts as to whether it could find the money for the massive P&A spend required to release it.

Kinowelt originally signed a three-year output deal with New Line running from 2001-03, but in the end the German indie could only commit to the first year of that pact.

New output agreement calls for Warners to handle theatrical distribution and marketing for all New Line titles released in the U.S. through 2003 in Germany, Austria, Switzerland, Eastern Europe and Russia.

Warner Home Video and Warners International Television Distribution will handle the respective homevideo and television rights of these films in the covered territories.

Hard hit after the crash of the Neuer Markt stock exchange and its own inability to license an ambitious free TV package from Warners, Kinowelt is in the midst of a major restructuring and has already reduced its distribution apparatus from three divisions to one. Its inhouse production team also has been pinkslipped.

Warners currently distributes New Line films theatrically, on homevideo and on television in select territories in Latin America and Asia.

Other titles under the Warners output deal include the remaining two installments of “The Lord of the Rings,” “Rush Hour 2,” “Austin Powers in Goldmember,” “Blade 2,” “John Q,” “Life as a House” and “I Am Sam.”