Variety is reporting that Warner Bros. is absorbing New Line Cinema, which will become an internal genre arm of the WB studio producing a smaller slate of films and focusing on the horror, comedy and urban franchises that New Line has built up.  The move by Warner Bros. ends the colorful saga of New Line, which began on a shoestring 40 years ago just scraping by with a diverse lineup of films that mixed camp classics like Reefer Madness with edgy foreign fare such as Jean-Luc Godard's Sympathy for the Devil. After years of scuffling, New Line hit its stride in the 1980s thanks to the rise of home video and the success of its Nightmare on Elm Street franchise, which was followed by a number of other hits including House Party, the Austin Powers films, and Rush Hour.


In 1998 New Line actually ushered in the current era of comic book-based movies with the first film in its Blade series, which was also the first critically and financially successful Marvel-based film.  Blade paved the way for the later success of X-Men and Spider-Man films.  However historically important Blade might eventually prove to be, it is clear that New Line reached its apogee with Peter Jackson's Lord of the Rings trilogy.  New Line execs Bob Shaye and Michael Lynne took a major gamble by giving the relatively unknown Jackson some $270 million to film the Tolkien trilogy -- and it paid off handsomely -- just four years ago The Return of the King won the Best Picture Oscar and brought in over a billion dollars worldwide.


The success of the LOTR trilogy appeared to validate the Time Warner corporate strategy of keeping New Line as a separate unit after Warner Bros. merged with Ted Turner's media empire that included New Line.  But the four years since The Return of the King triumphed have not been kind to New Line.  Bitter disputes with Peter Jackson over his share of the profits from the LOTR movies delayed the potential blockbuster Hobbit films -- and New Line's hugely expensive The Golden Compass, which reportedly cost $180-200 million, earned just $70 million at the domestic box office. 


New Line's last shot at recovering some of that LOTR hit magic is the Will Ferrell comedy Semi-Pro that opens this weekend and will hope to match the performance of the studio's only real post-Tolkien hit, the 2005 comedy Wedding Crashers, which earned over $200 million. Time will tell what effect Warner Bros. gobbling up New Line will have on important New Line projects such as the Hobbit films (see 'Del Toro to Direct Hobbit Films').


By absorbing New Line into Warner Bros. Time Warner will reap considerable savings.  Shaye and Lynne will be gone along with the majority of New Line's staff that Variety estimates at 600.  But in this round of corporate cost-cutting Time Warner will shed more than just expenses -- New Line, for all its flaws, had some of that reckless, pioneering spirit that seems to be sorely lacking in the increasingly corporate climate of Hollywood's major studios.