When Universal cancelled King Kong in 1997, Jackson and Walsh immediately received support from Weinstein and began a six-week process of sorting out the rights. Jackson and Walsh asked Costa Botes to write a synopsis of the book and they began to re-read the book. Two to three months later, they had written their treatment. The first film would have dealt with what would become The Fellowship of the Ring, The Two Towers, and the beginning of The Return of the King, ending with Saruman's death, and Gandalf and Pippin going to Minas Tirith. In this treatment, Gwaihir and Gandalf visit Edoras after escaping Saruman, Gollum attacks Frodo when the Fellowship is still united, and Farmer Maggot, Glorfindel, Radagast, Elladan and Elrohir are present. Bilbo attends the Council of Elrond, Sam looks into Galadriel's mirror, Saruman is redeemed before he dies and the Nazgûl just make it into Mount Doom before they fall. They presented their treatment to Harvey and Bob Weinstein, the latter of whom they focused on impressing with their screenwriting as he had not read the book. They agreed upon two films and a total budget of $75 million.During mid-1997, Jackson and Walsh began writing with Stephen Sinclair. Sinclair's partner, Philippa Boyens, was a major fan of the book and joined the writing team after reading their treatment. It took 13–14 months to write the two film scripts, which were 147 and 144 pages respectively. Sinclair left the project due to theatrical obligations. Amongst their revisions, Sam is caught eavesdropping and forced to go along with Frodo, as occurs in the original novel. In the final treatment Sam, Merry, and Pippin infer the existence of One Ring and voluntarily go along after confronting Frodo about it. Gandalf's account of his time at Orthanc was pulled out of flashback and Lothlórien was cut, with Galadriel doing what she does in the story at Rivendell. Denethor attends the Council with his son. Other changes included having Arwen rescue Frodo, and the action sequence involving the cave troll. The writers also considered having Arwen absorb Éowyn's role entirely by having her kill the Witch-king.Trouble struck when Marty Katz was sent to New Zealand. Spending four months there, he told Miramax that the films were more likely to cost $150 million, and with Miramax unable to finance this, and with $15 million already spent, they decided to merge the two films into one. On 17 June 1998, Bob Weinstein presented a treatment of a single two-hour film version of the book. He suggested cutting Bree and the Battle of Helm's Deep, "losing or using" Saruman, merging Rohan and Gondor with Éowyn as Boromir's sister, shortening Rivendell and Moria as well as having Ents prevent the Uruk-hai from kidnapping Merry and Pippin. Upset by the idea of "cutting out half the good stuff" Jackson balked, and Miramax declared that any script or work completed by Weta Workshop was theirs. Jackson went around Hollywood for four weeks, showing a thirty-five-minute video of their work, before meeting with New Line Cinema's Mark Ordesky. At New Line Cinema, Robert Shaye viewed the video, and then asked why they were making two films when the book was published as three volumes (this was later corrected: New Line only made this choice out of economical reasons); he wanted to make a film trilogy. Now Jackson, Walsh, and Boyens had to write three new scripts.The expansion to three films allowed much more creative freedom, although in their effort to restructure the scripts, Jackson, Walsh, and Boyens did not write each film to correspond exactly to its respective book, opting instead to write a three-part adaptation with some sequences missing, some sequences created from scratch, and some sequences moved from one area to another regardless of its placement in the books. To allow the story to be clearer for viewers, Jackson takes a more chronological approach to the story than did Tolkien. Frodo's quest is the main focus, and Aragorn is the 

Question: What did Miramax do to two films when it run out of budget?
Answer: merge the two films into one