'Rings' lures German investors

A German investment company is trying to raise $380 million to invest in Peter Jackson's The Lord Of The Rings trilogy, says an American entertainment magazine.

Variety says Hanover Leasings has established the fund to finance The Return Of The King, the third film of the series, due for release in December 2003.

Investors must have at least $110,000 to invest in the film, the magazine says.

Mystery surrounds the cost of the three films, based on JRR Tolkien's fantasy classic, but there appears to be a budget blowout.

When the project was announced in August 1998, Jackson's company, Wingnut Films, said it would cost $260 million.

By July last year, film sources said the budget had risen to $360 million - an increase the company would not confirm.

American magazine Vanity Fair this month reported the project would cost $US270 million ($692 million).

Even with the low value of the New Zealand dollar, it was a substantial increase.

Wingnut Films would not confirm the figure.

The project's main backer is American company New Line Cinema.

Variety said German investment schemes, such as that for The Lord Of The Rings, were usually offered towards the end of the financial year to big-income earners looking to bring down their taxable income.

Variety said German tax authorities were busy rewriting investment regulations to end tax revenue losses to such funds, which would not be available after this year.

While media funds would continue to be offered, they would not provide the same lucrative tax benefits.

The magazine said that last year nearly $3.8 billion was raised through private media funds.

- NZPA