New Line Cinema has gone and lost their ever lovin mind. They’ve kicked Peter Jackson off any and all future Lord of the Rings projects.

We’ve been hearing rumblings for quite awhile now which indicate that a Hobbit movie has been in the works. MGM came out and said they were committed to making the movie, and even said they’d like to have Peter Jackson involved in making it. Jackson and his team have been adamant that no one has talked to them about it, and the confusing thing here is that neither MGM or Lord of the Rings movie makers New Line Cinema actually own the rights to make the film. They both have a piece of it.

Adding to the confusion is Peter Jackson’s ongoing lawsuit against New Line. He says they owe him millions, New Line says he can have them… but only if he agrees to make The Hobbit. He feels that though he wants to make the film, doing so under duress is not the best way to get started.

So now, Peter Jackson and Fran Walsh have addressed the situation in an open letter sent to fan site TheOneRing.net. The news is as bad as it can be. In the letter, Peter and Fran state simply that they’ve received a call informing them that “New Line would no longer be requiring our services on the Hobbit and the LOTR 'prequel'.” Why? “Because we won't discuss making the movies until the lawsuit is resolved, the studio is going to have to hire another director.”

Basically, New Line is being petty here. They’re sabotaging their own franchise simply because they don’t want to pay their Oscar-winning, flagship director. They’d rather screw over Peter Jackson and hoard his cash then treat him properly and keep their franchise on the right track... to say nothing of the way they’ve just alienated virtually every single Lord of the Rings fan in existence.

Fools.

Look though, I don't think you can place all the blame here on New Line. Most of it maybe but it sounds like Peter Jackson and the folks over at Wingnut films aren't exactly going out of their way to cooperate either. For all his talk about refusing to involve the lawsuit with whether or not The Hobbit gets made, the long and short of it is that PJ is playing the same game as New Line. He's refusing to make the movie until they pay out his lawsuit. New Line on the other hand, is refusing to pay him until he promises to do The Hobbit. There's plenty of money to go around, and it's not like PJ hasn't already pocketed millions and millions from Lord of the Rings. This smells and awful lot like Fox and Bryan Singer's battle over the X-Men franchise. Everyone is to blame, they're both being childish and now we're all going to suffer. I'm sure that while Peter Jackson has been playing pay-me-chicken Brett Ratner already has gotten his Hobbit pitch ready to go.

The only confusing thing here is who has the rights to make the film? Now it sounds like New Line is going ahead with it, but a few weeks ago it was MGM that was going to make it. Which studio will end up with the rights? If MGM manages to pry them away from New Line, is there any change that PJ might be brought in to direct? Peter and Fran don’t sound very hopeful: “We now have no choice but to let the idea of a film of The Hobbit go and move forward with other projects. We send our very best wishes to whomever has the privilege of making The Hobbit and look forward to seeing the film on the big screen.”

Read the full Peter Jackson letter by clicking here and tell New Line Cinema’s greedy executives what you think of them in our comments section below.