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‘The Lord of the Rings,’ ‘The Hobbit’ Rights Sold; How Does this Impact Amazon’s ‘Rings of Power’?

David Satin

One IP to rule them all… at least, that’s what Swedish video game manufacturer Embracer Group is hoping. The company announced on Thursday that it had acquired the intellectual property rights to “The Lord of The Rings” and “The Hobbit.” The rights cover a myriad of different content areas including movies, video games, board games, merchandise, and even theme parks.

Previously, those rights had been held by the Saul Zaentz Company, which took ownership of them in 1976. The film rights had been sold to New Line Cinema, who is still developing the animated “Lord of The Rings: War of The Rohirrim” with Warner Bros. However, since Warner Bros. had no plans to develop a live-action adaptation in the works, the film rights reverted back to the Saul Zaentz Company last year. All of this is befuddling enough, and then one must ask the question “Where’s Amazon in all this?”

That question is especially pertinent since Amazon is preparing to release “The Lord of The Rings: The Rings of Power” on Prime Video Sept. 2. Amazon spent well over $400 million on just the first season, so expectations around the series are incredibly high. The tech company also spent $250 million to acquire the rights to make the show in the first place, but those rights covered only TV shows longer than eight episodes, so they were not part of Zaentz package. Instead, Amazon purchased those rights directly from the estate of “The Lord of the Rings” author J.R.R. Tolkien.

Other development rights, like video games and merchandise, remained with the Saul Zaentz corporation until now.

It is curious that Amazon lost out on the bidding for the remaining rights to a smaller company, if they were even engaged in them to begin with. The terms of sale to Embracer have not been revealed, so it’s not known how much the video game company paid for the IP, but it does seem that if money was the only concern, Amazon should have been able to blow any competition out of the water.

What may be trickiest for Amazon now is the specific material the company has the right to adapt. Amazon has the rights to “The Lord of the Rings” novels only. The story being adapted is not a retelling of the Peter Jackson trilogy, but a new narrative based on material pulled from the book’s appendices. Amazon is also allowed to adapt specific events or characters from other Tolkien sources like “The Silmarillion,” but must get approval on a case-by-case basis from the author’s estate.

The new Embracer deal complicates that arrangement as well. Embracer now owns limited matching rights to projects adapted from “The Silmarillion,” as well as “The Unfinished Tales of Numenor and Middle-earth.” That means that any company wanting to make an adaptation of those works has to first let Embracer decide if it will adapt them instead. “Rings of Power” has already taken some elements from these works, and it’s unclear if future seasons will be able to pull from other Tolkien sources to flesh out their story or not.

One thing is clear for Amazon, its show isn’t going anywhere because of this deal. It still owns the TV development rights to “The Lord of The Rings,” so there’s no way for Embracer to shut down the project or cancel it after one season, even if it wanted to. However, given that Embracer now owns a stake in the show’s success, it will likely leave well enough alone.

However, the company did not buy the IP simply to watch the royalty checks roll in. Embracer will presumably look to begin developing ideas for new film adaptations quickly.

“Opportunities include exploring additional movies based on iconic characters such as Gandalf, Aragorn, Gollum, Galadriel, Eowyn and other characters from the literary works of J.R.R. Tolkien,” the company said in a press release, indicating that Embracer already has some intention to act on the acquisition.

Embracer could go back to Warner Bros. Discovery to reengage the studio on developing live-action films, but because they own the rights outright, Embracer can decide to sell those film rights to any third party that it likes, and for what will assuredly be a staggering amount of money.

More answers about the deal will emerge, but the biggest questions remain a mystery for now: Why didn’t Amazon acquire these rights? Was it that the Tolkien Estate wanted them split amongst different companies with different visions? Did the e-commerce giant really get out-bid by a Swedish video game company? “Rings of Power” was already facing competition from HBO’s “House of The Dragon,” but in the coming years could it face more competition from within Middle-earth itself?

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