Even as negotiations between Fox and Warner Bros over the rights to WATCHMEN tootle along, Warners is busy planning several things. One of them, unfortunately, is a lot of layoffs:

Warner Bros is considering ways to slash its budget by 10 percent, saving tens of millions of dollars via layoffs or other steps, as the studio nears an expected settlement of a dispute with a rival house over its upcoming “Watchmen” film.

Warner joins rivals from Sony Corp’s Sony Pictures to Walt Disney Co in trying to offset falling film and flat DVD revenues in a rocky U.S. economy.

“No decisions have been made,” said a Warner Bros spokesman regarding the cost cuts, which are widely expected to result in an unspecified number of layoffs at the studio, which released the blockbuster Batman movie, “The Dark Knight.”

Meanwhile, this LA Times piece gives the first idea of what the settlement with Fox may be — perhaps as much as 8.5 percent of WB’s gross on the film. (No mention of that apocryphal Batman TV rights swap, either.) However, both Fox and Warners seem to have found an excellent target for any wrath over the legal misery — producer Larry Gordon, whose bumbling reading of his contracts and subsequent fumbling over court statements has made him the villain of the piece:

The court fight over “The Watchmen” is costing Warner Bros. and 20th Century Fox hundreds of thousands of dollars in legal fees, but the biggest bill of all could fall to the film’s producer, Larry Gordon, his lawyers and their insurers, who could be on the hook for substantially more money.

Court documents in the nearly yearlong dispute over the superhero movie’s distribution rights show that Warner Bros., which is poised to lose valuable rights to “Watchmen” after a judge’s favorable ruling for Fox, is pursuing Gordon “for all damages Warner Bros. suffers as a result of Fox’s claims.”

Gordon is no wannabe, having produced such popular fare as “DIE HARD,” “48 Hrs.” and “PREDATOR.” But this time…he may be the one whose world changes forever.

Is this just Hollywood at its worst…or Alan Moore’s black magic taking effect?

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