Lord of the Rings fans, rejoice: Warner Bros. has reached a settlement with the estate of J.R.R. Tolkien over who owns the film rights to the story, and now production can start on The Hobbit, the prequel to the series that has been a massive success both as a series of books and as a series of movies.

The trouble started in February of 2008 when Tolkien's heirs sued Warner Bros.' New Line Cinema arm, accusing the company of shortchanging the estate on royalties. The suit sought in excess of $150 million and sought to rescind the studio's right to make Lord of the Rings movies. Bonnie Eskenazi, an attorney for the Tolkien estate, told the Wall Street Journal (subscription required) that while $150 million was the initial claim, "that demand increased after we got closer to a trial because discovery revealed additional financial impropriety."

After years of squabbling between the creators of The Lord of the Rings film trilogy and New Line Cinema (Time Warner, NYSE: TWX), today comes wonderful news that Peter Jackson and Fran Walsh have agreed to create not one, but TWO new hobbit movies! The prequels will be produced and distributed by New Line Cinema and MGM, and are slated for release in 2010 and 2011.

The first will be based on J.R.R. Tolkien's earlier work, The Hobbit, which follows Bilbo Baggins as he discovers the ring that becomes the macguffin of the record-breaking trilogy. Along the way, we will again encounter Gandalf, as well as a dozen dwarves, two trolls and one very angry dragon.

The plot of the second film, meant to bridge the narrative gap between The Hobbit and Lord of the Rings, will be stitched together from the volumunous notes Tolkien made for his history of Middle Earth. I'm pleased that Jackson and Walsh are heading this effort, since they have shown that they respect Tolkien's vision.

I can't wait to follow them there and back again, again.

Thanks to Matt Betts for the tip.

Sony Corp's (NYSE: SNE) "Superbad" ruled the weekend box office, raking in $31.2 million to become the No. 1 movie, according to estimates on Sunday. The teen comedy knocked off last weekend's top flick, New Line Cinema's "Rush Hour 3" to second place, and forced Warner Brother's (NYSE: TWX) "The Invasion," which stars veteran actress Nicole Kidman and the latest "James Bond," Daniel Craig, to open at No. 5.

Creating box-office hits seems to be a pattern for Judd Apatow, who has also directed "Knocked Up" and "The 40-Year-Old Virgin". In Apatow teamed up with Seth Rogen who coincidentally also starred in "Knocked Up", "The 40-Year-Old Virgin" and several other Apatow films. The pair has worked together for over a decade.

Sony had modest expectations for "Superbad" to earn somewhere in the $25 million range, despite having a production budget of $20 million. The $31 million dollar opening weekend was similar to Knocked Up, which opened with $30.7 million and went on to hit $100 million in sales.

Paul Derarabedian, president of box-office tracker Media By Numbers, believes that Apatow is a brand now, specializing in movies that appeal to older audiences who follow whatever he does, according to the Associated Press. Apatow is currently working on 6 films, including one with Will Ferrell and Adam Sandler, and two with long-time partner Seth Rogen. Unfortunately for Sony, they entertainment giant will not be involved in any of Apatow's next six films.

The wigs have been put away, the red carpet's been walked, and the cast and crew behind Hairspray -- the latest movie musical to hit the big screen -- is anxiously awaiting the movie's July 20 U.S. premiere.

Distributed by New Line Cinema -- a division of Time Warner (NYSE: TWX) -- Hairspray returns to the early 1960s to follow the tale of "pleasantly plump" Tracy Turnblad as she aims for a role on a television dance program while attempting to battle social ills. The movie, based on the 2002 Broadway musical, which was based on the 1988 (non-musical) John Waters movie, has a cavalcade of stars, including Michelle Pfeiffer, Christopher Walken, Queen Latifah, Allison Janney, and Amanda Bynes. Newcomer Nikki Blonsky won the central role of Tracy.

One member of the Hairspray contingent that could really benefit from the film's success is John Travolta, who takes on the traditionally cross-dressed role of Tracy's mother, Edna. Since Battlefield Earth, the Scientology-inspired 2000 film widely panned as the worst move ever made, the star of Grease and Pulp Fiction has suffered some missteps, including A Love Song for Bobby Long, Domestic Disturbance, and Be Cool. Not until this Spring's Wild Hogs did Travolta appear to have any hope of ditching the box-office poison title.

After years of speculation, rumors and negotiations, a film version of beloved HBO series Sex and the City is set to start shooting in the fall.

New Line Cinema, a subsidiary of Time Warner Inc. (NYSE: TWX), is said to be near a deal to finance and distribute the picture, and the leading cast is ready to go. All four major players -- Sarah Jessica Parker, the reportedly hardball-playing Kim Cattrall, Kristin Davis, and Cynthia Nixon -- have agreed to reprise their respective roles as Carrie, Samantha, Charlotte, and Miranda. The show's executive producer, Michael Patrick King, is set to write and direct.

When television audiences bid adieu to the ladies in early 2004, things were fairly neatly knotted up (spoiler alert!). Carrie's character had reunited with on-again, off-again love "Mr. Big" (aka "John," as we find out). Samantha was cancer-free and in a healthy relationship with a much younger man; Charlotte and new husband Harry were looking forward to adopting a baby girl; and newlywed Miranda was raising her son with husband Steve and caring for his ailing mother.

One can only speculate where the movie will take the ladies. Will it pick up in real-time, three years after the events of the series finale? Will the foursome's leading men also be back in their roles? Finally, will anyone still care to see 90 minutes into these ladies' lives, now that they are all settled down and monogamous? Michael Patrick King is a fantastic writer of dramedy, and the actresses are a fabulous ensemble. Here's hoping the cosmopolitans continue to flow for one more chapter of their collective tale.

Beth Gaston Moon is an analyst at Schaeffer's Investment Research.

Time Warner Inc. (NYSE: TWX ) has been selected as the "undervalued stock of the month" by Paul Tracy, in his StreetAuthority Market Advisor.

The advisor explains, "We think the company's days as an industry laggard are over and we think the company is well-positioned to leverage its valuable assets and unlock shareholder value in the years ahead."

For those unfamiliar with the company's operations, he explains that Time Warner is the largest media conglomerate on the planet. First, he notes, there is AOL, which has built a powerful network of highly-trafficked web sites. He explains, "Its ubiquitous instant messenger service is used to send 1.8 billion messages every day."

Then, he adds, there is Time Warner Cable Inc. (NYSE: TWC), which has grown to become the nation's number two cable provider with a massive base of 15 million customers -- roughly half of whom have signed up for premium services such as digital video or high-speed internet.

The film business, he points out, includes Warner Brothers and New Line Cinema, and has "raked in billions" in global box office revenues from blockbuster hits like Harry Potter and The Lord of the Rings.

In fact, he says, Warner Brothers is planning to bring the Harry Potter world to life, unveiling plans to collaborate on a new theme park based on the "wildly popular" series.