UPDATED: WATCHMEN: SETTLED

Update 5:00am EST - It will be 8.5%. Click here for Jeff Trexler's analysis, clarificiations (Fox does have a piece of sequels and spinoffs) and look at the settlement between Fox and Warner Bros.

Original Story:

Word has come that Warner Bros and Fox have settled their legal dispute over the rights to the film version of Alan Moore and Dave Gibbons’ Watchmen. According to The Hollywood Reporter, the settlement details will be delivered to Judge Gary Feess on Friday morning, and the parties will then request that the pending legal case be dismissed, saving both studios millions, and ensuring that the film will meet its March 6th release date.

As the trade reports, no terms will be made public, but reportedly includes a “sizable cash payment” and a portion of Watchmen’s box office. As a result of the deal, Fox will have no piece of Watchmen moving forward, and will not co-distribute the film. (Newsarama Note - this inital assertion was later proven to be wrong)

While this portion of the case may be over, for Watchmen Producer Larry Gordon, the problems may just be starting. It has been reported that Warner Bros. will seek reimbursement for the amount being paid to Fox from Gordon, due to the fact that Gordon’s attorney from 1994, when he left Fox, admitted that he did not inform Gordon or Warner Bros. of the claim Fox had on the Watchmen film. The move by Warner Bros. is tantamount to the studio laying the blame for the entire matter at Gordon’s feet. In an open letter to Feess written by Gordon last week, the Producer wrote: ""It is Mr. Gordon's position that the execution of the 1994 turnaround agreement was the result of either a mutual mistake by both parties or a unilateral mistake made by his counsel, on which Mr. Gordon relied" this in regards to Fox's claim on the property.

As implied by an article this week in the L.A. Times, the damages sought by Warner Bros. against Gordon could reach into the tens of millions of dollars, as the newspaper reported that one of the amounts being bandied about for the box office percentage due to Fox was 8.5%. As the Times Synder's last film, an adaptation of Frank Miller's 300, grossed more than $465 million in ticket sales worldwide. Watchmen is expected to do the same, if not better than 300.

The advertising campaign for the March-debuting film has already begun, and is expected to ramp up considerably in the coming weeks - especially on Fox outlets, as the media giant now has a vested interest in the film's success.

A joint statment from Fox and Warner Bros. is expected Friday.