Saul Zaentz Company to sell its LORD OF THE RINGS screen and merchandising rights

The Saul Zaentz Company is to sell its long-standing screen and merchandising rights to J.R.R. Tolkien's work, which it has held since 1976.

United Artists struck a deal with J.R.R. Tolkien in 1968 to secure the screen rights to Tolkien's novels The Hobbit (1937) and The Lord of the Rings (1954-55), along with related merchandising rights. Tolkien had been reluctant to sell the screen rights, but had wanted to secure a legacy for his children and, in particular, to provide for the education of his grandchildren. United Artists worked on several prospective movie projects over the next decade, most notably a live-action collaboration with John Boorman which ultimately did not reach the screen (during research, Boorman developed ideas which led to his 1981 Arthurian movie Excalibur instead).

In 1976 United Artists decided to sell some of its rights to Tolkien's works to raise funds for more original projects. Film producer Saul Zaentz, fresh from the success of One Flew Over the Cuckoo's Nest, acquired the full rights to The Lord of the Rings and the production rights to The Hobbit; United Artists held onto the distribution rights to The Hobbit, figuring that any film adaptation would want to start with the earlier novel (these rights were later acquired by MGM when they bought United Artists). This led Zaentz to produce an animated version of the first half of The Lord of the Rings in 1978 with director Ralph Bakshi; the film was not successful enough to allow a sequel to be produced.

Zaentz established a new company called Tolkien Enterprises to handle the rights he'd acquired; the name was later changed to Middle-earth Enterprises to avoid confusion with the Tolkien Estate. Tolkien Enterprises entered into licencing and merchandising deals for various merchandise related to the property, including video games and a tabletop roleplaying game from Iron Crown Enterprises (ICE). In 1997, Zaentz entered into an agreement with New Line Cinema for a new, live-action film adaptation of The Lord of the Rings, to be directed by Peter Jackson. Released as three movies between 2001 and 2003, the the trilogy made $3 billion at the box office and was critically acclaimed.

Zaentz continued to benefit from various licencing deals related to the books and films. Several years later, a complex deal was worked out between New Line, their new owners Warner Brothers and Hobbit rights-holders MGM to produce a film series based on The Hobbit. This trilogy was released between 2012 and 2014 to financial success, but a much more muted critical reception. Zaentz died in January 2014, shortly after the release of the second film in the trilogy.

Zaentz's death and the subsequent reversion of the live-action film rights from New Line to the Zaentz Company in 2020 seems to have spurred the company's decision to sell. The package includes the live-action film rights to The Lord of the Rings in full, the production rights to The Hobbit, spin-off merchandising rights to both properties (including tabletop games, video games, miniatures), theme park rights and rights related to live events based on both novels. The package is expected to raise at least $2 billion before any potential bidding begins.

The logical home for the rights is Amazon. Amazon reached a deal with New Line and Warner Brothers in 2017 as part of their project to bring a Lord of the Rings-branded television series to the air, boosted by an unprecedented $250 million deal with the Tolkien Estate granting them certain limited rights to other Tolkien writings (believed to incorporate strictly-limited rights to Tolkien's posthumous works The Silmarillion and Unfinished Tales). Amazon subsequently acquired MGM, meaning they also now own the distribution rights to The Hobbit. Acquiring the Saul Zaentz Company's rights would reunite the full rights to The Hobbit for the first time since 1976, and would also clear the way for Amazon to helm any future remake of the films.

Amazon entered production on its Middle-earth prequel television series, The Rings of Power, in February 2020. The series, which has become the most expensive single television series ever made, is expected to debut its first trailer during the Super Bowl on Sunday. The show is currently scheduled to hit the air on 2 September this year.

It's possible other companies might also be interested in the deal, with Warner Brothers likely keen to investigate following their production (via subsidiary New Line) of the six successful live-action Middle-earth movies to date. Warner Brothers are also currently developing an animated Middle-earth movie, War of the Rohirrim, and that project entered production early enough to not be affected by this reversion of rights. However, the likely high price tag may dissuade Warner Brothers, or encourage them to enter into a partnership with Amazon over future possible projects.