New Line International's output arrangement with the financially troubled German distributor Kinowelt has finally unravelled. In a deal hammered out last week, Warner Bros has assumed the distribution of New Line Cinema features in all German-speaking territories, eastern Europe and Russia effective immediately and through 2003.

The announcement was made in Los Angeles yesterday by Richard Fox, executive vice president, international, at Warner Bros and Rolf Mittweg, president and COO of worldwide distribution and marketing at New Line Cinema.

The agreement calls for Warner Bros Pictures to handle the theatrical distribution and marketing of the current and future New Line slates in Germany, Austria, Switzerland, eastern Europe and Russia. Warner Home Video and Warner Bros International Television Distribution will likewise handle the respective home video and TV rights of these films in the territories.

Critically for New Line, one of the first films to be covered by the arrangement will be The Fellowship Of The Ring which will open in Germany, as in the rest of the world, on Dec 19. The first instalment of the hugely anticipated Lord Of The Rings trilogy, the film's German release had been the subject of much concern at New Line since Kinowelt would clearly be unable to finance the large-scale release of the film.

Also covered are the further installments of the trilogy in 2002 and 2003, Rush Hour 2, Austin Powers In Goldmember, Blade 2, John Q with Denzel Washington, Life As A House with Kevin Kline and I Am Sam with Sean Penn and Michelle Pfeiffer.

"At New Line, we're known for our eclectic slate of films which include all genres from critically acclaimed thought-provoking dramas to crowd-pleasing blockbusters," said Mittweg in a statement. "We're pleased to be represented in these markets by our AOL Time Warner sister company Warner Bros."

"Our distribution arrangements with New Line in other regions have proven very successful and we anticipate similar success in these territories," said Fox. Warner Bros currently distributes New Line Cinema's films theatrically, on home video and on television in select territories in Latin America and Asia.

Cash-starved Kinowelt said in a presentation at the end of March this year that it had paid DM28m for The Fellowship Of The Ring in its territories; until now the company had been a key link in New Line's distribution network which also includes Entertainment Film Distributors in the UK, Metropolitan Filmexport in France, Aurum in Spain, Svensk Filmindustri in Scandinavia and Nexo Pictures in Italy.