Hollywood is about to stampede into Middle Earth. An array of movie, merchandising, gaming and live event rights to “Lord of the Rings,” “The Hobbit” and other titles from author J.R.R. Tolkien are coming up for auction now that the Saul Zaentz Co. has decided to sell its Tolkien holdings.
Zaentz Co. has hired ACF Investment Bank to handle the sale process, which is unfolding this week as bankers make the rounds of the logical Hollywood buyers. The Tolkien properties are projected to fetch at least $2 billion, based on recent high valuations for top-tier IP and content producers.
Representatives for Zaentz Co. and ACF declined to comment.
The timing of the sale process is not accidental. Amazon is set to premiere its long-awaited, mega-budgeted TV series rendition of the enduring “Lord of the Rings” saga, “Lord of the Rings: The Rings of Power,” on Sept. 2. Amazon is at the top of the list of prime candidates to pursue the additional rights now held by Zaentz.
The Zaentz Co. holdings encompass rights to exploit “LOTR” and “The Hobbit” properties in film, video games, merchandising, live events and theme parks. It also includes limited matching rights should the Tolkien estate decide to make movies or other content based on two compilations of Tolkien writings that were published after his death in 1973: “The Silmarillion” and “The Unfinished Tales of Numenor and Middle-Earth.”
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Warner Bros. also maintains some film development rights to “LOTR” through its ownership of New Line Cinema. New Line had massive global box office hits and Oscar wins with director Peter Jackson’s trilogy “Fellowship of the Ring” (2001), “The Two Towers” (2002) and “The Return of the King” (2003). Warner Bros. last year announced plans for an anime theatrical feature to be produced with New Line and Warner Bros. Animation, “The Lord of the Rings: The War of the Rohirrim.”
But it’s understood that in the Zaentz Co.’s view, substantial live-action film rights reverted back to them last year in part because Warner Bros. had not been actively developing new “LOTR” and related content. That development, plus the anticipation for the new Amazon series, was enough to convince Zaentz Co. that the time was ripe for a sale. Warner Bros. declined to comment but it is believed that the studio and Zaentz Co. are already odds over who controls what when it comes to “LOTR” and “Hobbit” rights, which have been the subject of extensive litigation over the years.
Saul Zaentz, an entrepreneur in music and film who died in 2014, acquired film adaptation and other rights to the various Tolkien titles in 1976. One form of media that was carved out of the deal with Zaentz back in the 1970s was the right to produce a TV series that was longer than eight episodes. That loophole allowed Amazon to cut a deal directly with the Tolkien estate for “The Rings of Power” series in 2017 when the Tolkien estate shopped the TV series.
In the early 2000s, Zaentz Co. sued Warner Bros. and New Line over its share of profits from the Jackson movie trilogy. The Tolkien estate and publisher HarperCollins sued Warner Bros. multiple times over profits from the “LOTR” films and the three “Hobbit” features: “The Hobbit: An Unexpected Journey” (2012), “The Hobbit: The Desolation of Smaug” (2013) and “The Hobbit: The Battle of the Five Armies.”
Based in Berkeley, Calif., Zaentz Co. is home to Middle Earth Enterprises, which handles its Tolkien-related licensing. Zaentz first made his name as the longtime leader of Fantasy Records, an influential jazz and rock label in the 1950s, ’60s and ’70s. He also produced such movies as “One Flew Over the Cuckoo’s Nest” (1975), “Amadeus” (1984) and “The English Patient” (1996), all three of which earned Oscars for best picture.