Ahoy, squirts! Quint here. I've been hearing word that Bob Shaye was desperately trying to keep his position at New Line these last few months. He cleared up his spat with Peter Jackson and got THE HOBBIT moving again, he was a central figure pushing for a remake/reinvigoration of one of New Line's other successful franches, A NIGHTMARE ON ELM STREET... all to show that he still has what it takes to run the studio.

Looks like it was too late. From what I understand THE GOLDEN COMPASS was supposed to show the big big wigs that Shaye didn't need Jackson and the original RINGS crew to make a successful fantasy franchise. When that tanked the expiration date on Shaye's CEO moved up to the present and the scrambling began.

Here's the email that went out to Time Warner employees today:

This afternoon, we announced that New Line will be operated as a unit of Warner Bros. New Line will continue to retain its own brand identity and will maintain separate development, production, marketing, distribution, and business affairs operations, but it will now coordinate those functions with Warner Bros.

The combination should strengthen our company's filmed entertainment business by combining New Line with Warner Bros.' industry-leading position and global reach. New Line has a proud 40-year legacy of producing creative, cutting-edge entertainment. That will continue. But, given trends in the industry toward fewer movie releases, the importance of a coordinated strategy for the international and digital distribution of filmed entertainment, and the need to continue to make sure that we're running our businesses as efficiently as possible, it made sense for us to combine our studios' infrastructures.

Bob Shaye and Michael Lynne, the Co-Chairs and Co-CEOs of New Line, have chosen to leave the company, but we're in discussions about possible future business relationships. Bob and Michael have a unique partnership that is noteworthy not only for its longevity, but also for its record of innovation and success. They have guided New Line's growth from a privately-held art film distributor to the world's leading independent film studio – home to such popular films as The Lord of the Rings trilogy, The Mask, Austin Powers, Blade, Rush Hour, Elf, Wedding Crashers and Hairspray. I thank Bob and Michael for their enduring contributions to Time Warner and look forward to working with them in the future.

This consolidation will also result in changes, including the elimination of jobs at New Line. Warner Bros. is currently working through the details and will let people know how the changes affect them as soon as possible. Colleagues whose jobs are eliminated will be treated fairly and respectfully. These are very difficult decisions, but they're important for the future success of our film studios and our company.

As always, thank you for your hard work and support as our company moves forward. I'll continue to keep you updated on our progress.

Everybody I've talked to say that this was a move by WB to squeeze out Shaye and Lynne and I don't doubt that. New Line will still exist without them, but it sounds like they'll be more of a production company now than its own studio.

Shaye brought us a lot of great films and took many risks, some paid off huge like RINGS and some didn't (TOWN & COUNTRY), but it seems that the level of sleaze surrounding the LOTR money is probably what put him in this situation. With Jackson not getting paid, rumors of the actors not getting any of their residuals for merchandising and now the Tolkien Estate trying to grab back the rights to HOBBIT before it can be made... things were clearly mismanaged.

I won't crap on Shaye. He's been in charge of some great movies and LORD OF THE RINGS as we know it would not exist without his intuition and guts to roll the dice when no one else would. It's a shame it had to end this way, but like any dysfunctional relationship... when it was good, it was great. We can remember those times and hope that New Line still carries on that legacy.