It’s understandable to be confused about who owns the rights to the Lord of the Rings because even
the people who do own them are confused. But almost since the books were first
published over six decades ago, there has been a war for the rights to adapt the Lord of the Rings.
And few now live, who understand it. It began, with the forging of the great novel.
A story about the most unlikely creature imaginable – a hobbit, Bilbo Baggins of the Shire.
It was from here that the world of Middle-earth was born.
JRR Tolkien would spend his entire adult life building this universe, but in his lifetime would
only publish one other novel of Middle-earth. Because there is only one Lord of the Rings.
Only one. It was split into
three separate volumes by his publisher, which was a sensible commercial decision,
but Tolkien always thought of it as one, single novel consisting of three parts.
The Hobbit and Lord of the Rings were published by Allen and Unwin,
which was bought by HarperCollins in 1990. Then and now, they held the literary
publishing rights but at the time Tolkien himself still owned rights to the story.
And within these rights was bound the strength and legal
permission to adapt his work to another medium. And such power does not stay hidden for long.
In 1969 he sold the exclusive film, merchandising, and stage rights to the Lord of the Rings and The
Hobbit to United Artists for 100,000 pounds, but he kept a 7.5 percent royalty interest
in any future adaptation. And for reasons lost to history,
the right to make a TV series longer than eight episodes also stayed with Tolkien.
Hmmmm, I wonder if that’s going to be relevant later…
Both before and after his death in 1973, Tolkien’s business affairs were wrapped
up in a company called the Fourth Age Ltd, which was renamed in 2013 to The Tolkien Estate.
And until his death is 2020, the Estate was led by Tolkien’s son, Christopher,
who was responsible for editing and publishing several of other books set in Middle-earth,
based on the extensive notes left behind by his father.
You finished it Not quite, there’s room for a little more.
This is why you’re not getting a Silmarillion movie any time soon.
The only Tolkien works that have adaptation rights held outside the Tolkien Estate are
The Hobbit and the Lord of the Rings because those were the only rights Tolkien himself sold.
The rights to all of the other works bearing his name remain with the Tolkien Estate.
But the hearts of films studios are easily corrupted.
And the films rights held by United Artists had a will of their own.
Having failed to adapt either book into a film, United Artists sold most of
their Tolkien rights in 1976 to Saul Zeantz, a producer who had worked with the studio before.
Notice how I said they sold most of the rights to him.
One of the things they held onto was distribution rights to film adaptations of The Hobbit.
Hmmm, I wonder if that will become relevant later. Anyway, Saul Zeantz would go on to incorporate
the Tolkien film rights into Middle-earth Enterprises, a division of his larger company.
Now, technically Middle-earth Enterprises still owns these rights today but as
we shall see later, it’s complicated. What’s that? This is already complicated.
Ohhhh boy do I have some bad news for you! Look at how long this video is!
Anyway, one of the reasons Zaentz acquired the Lord of the Rings rights was because
he had been approached by Ralph Bakshi to produce an animated Lord of the Rings movie.
This was the only Rings movie Zaentz would actually help produce himself, and funnily enough,
it was actually distributed by United Artists. Meanwhile, in 1977 the Rankin/Bass animation
company released a one-off TV movie of The Hobbit. Now, this had nothing to do with Zaentz or with
Bakshi – in fact production began in 1972 because, through a bizarre quirk of US copyright law,
The Lord of the Rings and The Hobbit books were arguably public domain in
the United States until January 1996. That’s a whole other thing, by the way
– links in the description for copyright geeks – but it’s fair to say that the idea that Tolkien’s
work was somehow free to be adapted by anyone who wanted to
was of course heavily disputed by the Tolkien Estate and Zaentz.
So when Rankin-Bass went to release their sequel to The Hobbit, they sued.
Details aren’t public but the case was settled and the Rankin-Bass film – an
adaptation based on Return of the King – was released in May 1980 on ABC.
Meanwhile, Bakshi never got to make his own Lord of the Rings sequel for a bunch of reasons.
And so it came to pass that besides the absolutely hilarious Russian and Finnish
movies, the Return of the King was the last film and TV adaptation of Tolkien
until Peter Jackson came along two decades later. In this time, Zaentz’s rights to the rings were
mostly used for licensing things like board games, merchandise, and the odd theatre performance.
Licencing is kind of like the Steward of Gondor compared to the King.
It basically means that Middle-earth Enterprises still owns the rights, but gives permission to
a third party – the steward – to use them for specific purposes for a specific period of time.
Hmm, I wonder if that will become relevant later. But the passage of time goes ever on and on.
Memories of the 1980 cartoon faded into the shadow. History became legend…legend became myth.
And for 17 years, the idea of a Lord of the Rings film passed out of all knowledge.
Until, when chance came, it ensnared a new bearer. How Peter Jackson came to direct the Lord of
the Rings trilogy is the subject of an entirely different video,
but for our purposes the important thing to know is that in 1997, he took it deep into
the tunnels of Miramax and convinced He Who Shall Not Be Named to licence the rights from Zaentz.
And there, it consumed them. The licencing agreement brought to Miramax
and Jackson unnatural development hell, with the pair disagreeing over whether
the adaptation should be one or two movies. He Who Shall Not Be Named effectively tried to
force Jackson into making one film or none at all, and gave him just four weeks to try and find
another studio to not only agree to produce Jackson’s script for what was then two movies,
but also give Miramax a five percent take of the gross because of the money they
had already spent developing Jackson’s script. It was a deal designed to be impossible to accept.
But something happened then, the Dark Lord did not intend.
Jackson secured agreement from New Line Cinema to produce his script as a trilogy,
and they bought the rights off Miramax. And the time would soon come, when this agreement
would shape the fortunes of all involved. Because the Lord of the Rings trilogy was
among the most successful movies of all time, and launched a whole new
wave of interest in Tolkien’s writings. So Middle-earth Enterprises licenced
a whole host of new Rings merchandise but these were all based on the books.
Merchandise and video games based on the films was still owned by New Line under their
licencing agreement with Middle-earth Enterprises. But here is where the lawsuits really get rolling,
because in this complex web of ownership and licencing, everyone saw the $2.9 billion that
the films brought in and went HNNNAAGG!
First up was an August 2004 lawsuit by Middle-earth Enterprises against New Line Cinema,
claiming they were owed $20 million in unpaid royalties from the Jackson films.
Around the same time, Peter Jackson was also suing New Line, claiming he was also
underpaid by the studio. What about the lawsuit?
We’ve already had it. We’ve had one yes, what about second lawsuit?
Both disputes were settled out of court. But that was only the battle for profits deep.
The battle for Middle-earth was about to begin. In February 2008, when the Tolkien Estate
and HarperCollins Publishing took New Line Cinema to court for a whopping $150 million.
They claimed that all they had seen from the massive financial success
of the Jackson films was an upfront fee of $62,000 before production even began.
Their claim for $150 million was based on the terms of Tolkien’s original sale
of the film rights, which promised a cut of the film’s profit to the Estate.
Problematically for New Line, the lawsuit by the Tolkien Estate effectively blocked the
production of The Hobbit movies until the dispute was settled.
That happened a year and a half later in September 2009.
The details weren’t made public but the Tolkien Estate gave its blessing for production on The
Hobbit films to resume. In the meantime,
New Line Cinema was acquired by Warner Brothers, while way back in 1981 United Artists – the studio
that still owned distribution rights for movies based on The Hobbit – had been acquired by MGM.
So this partly explains the production hell of The Hobbit films, dubbed immortally by
Lindsay Ellis as the Battle of the Five Studios. You have Warner Brothers and its subsidiary New
Line financing the production. You have MGM distributing it.
Then you have Peter Jackson’s production company Wingnut Films actually making them.
Then Middle-earth Enterprises is taking a cut, as is Miramax because of the original deal
that He Who Shall Not Be Named cut with New Line back in 1997.
A tad excessive, isn’t it? The Hobbit movies also unleashed a new
wave of merchandising based on Tolkien’s works. As before, merchandise based on the books
was still licenced by Zaentz, while anything related to the movies was done by the studios.
Even the Hobbiton Movie Set operates under agreement from the studios –
and if you haven’t seen my mini-documentary about how that came about, which you probably haven’t
based on the view count, then you really should.
Trust me, you’ll learn something and also get to meet this sheep.
Anyway, all this new merchandise means that it was only a matter of time before someone goes
too far and whadda you know, it’s back to court! In 2012 the Tolkien Estate sued Warner Brothers
and Seantz over what it claimed was an over-use of their adaptation rights.
An online, LOTR-themed gambling game was the centre of the dispute.
Not only did the Estate object to the use of Tolkien’s work for gambling,
but they also argued that the original license to Tolkien's works didn’t cover "electronic or
digital rights, rights in media yet to be devised or other intangibles.”
This case was actually an important benchmark for clarifying how video games
based on Tolkien’s works would operate. See, video games set in Middle-earth
actually go all the way back to 1982, and they were either being made under
licence from Zaentz as adaptations of the books, or by EA along with New Line Cinema as tie-in
games to the Jackson films. But for whatever reason,
in 2012 the Tolkien Estate felt that video game adaptations were outside the remit of Zaentz’s
ownership rights and took him and Warner Brothers to court over the online slot machine game.
It took five years, during which time Saul Zaentz passed away,
but the case was finally settled in 2017. So games like Return to Moria or the upcoming
Gollum one are independent of the movies, and are made under a licence from Middle-earth
Enterprises to adapt the literary characters. And having at last escaped from this legal bog,
the Tolkien Estate was finally free to look at further licencing agreements.
And it was in this moment that rumour grew of a shadow,
whispers of a nameless fear, and Jeff Bezos perceived his time had now come.
On 13 November 2017, Amazon Studios acquired global TV rights
to The Lord of the Rings for $250 million. This was a deal done directly with the Tolkien
Estate that took advantage of the fact that, way back in 1969, Tolkien had not sold
the rights to a TV series, leaving them still in the
hands of the Tolkien Estate. This was entirely separate
from Middle-earth Enterprises. As long as Amazon didn’t make
a movie, they were in the clear. But while Amazon was throwing a
truckload of money at their series, in 2021 the clock was ticking on the
licencing agreement between Middle-earth Enterprises and Warner Brothers.
See, it is common for film rights to be licenced for a set period of time for a studio to use them,
before they revert to the original owner. So in the deal between Warner Brothers and
Middle-earth Enterprises, Warner Brothers would have had to have made another movie by 2021,
otherwise their licence would lapse and Zaentz could shop them around to someone else.
Or at least, that’s what Middle-earth Enterprises claimed.
In February 2022, the Saul Seantz Company announced that they were putting
their Lord of the Rings rights up for sale, arguing that they could do this since their
agreement with Warner Brothers had lapsed, and they were now looking for a new home.
Warner Brother disagreed. Strongly.
Because Warner Brothers is making a Lord of the Rings film.
An anime called The War of the Rohirrim. The Warner Brothers statement said “New
Line Cinema has maintained the theatrical film rights, both live-action and animated,
for over two decades now. We are currently in production
on our anime film ‘The Lord of the Rings: The War of the Rohirrim’ and look forward
to bringing audiences back to Middle-earth.” Which is basically the legal equivalent of
“if you want him, come and claim him!” It’s not clear how exactly this will end,
but if history is anything to go by, it will involve lots and lots of lawyers.
But the journey does not end here. In August 2022, Middle-earth
Enterprises was acquired by the Embracer Group, a Swedish gaming conglomerate.
That’s right. They didn’t buy the rights to The Lord
of the Rings; they bought the entire company. So Middle-earth Enterprises still holds
the Rings rights. All that has changed
is that it is now a subsidiary of Embracer, not the Saul Zaentz Company.
But the statement announcing the sale from Embracer contained a few things that
raised some eyebrows, and awoke the lawyers. But the oliphant in the room was that Embracer
claimed Middle-earth Enterprises had “a financial interest” in the Rings of Power series by Amazon.
Which, if you’ve been paying attention, is very much not the case.
The Executive Producer of the show was asked about this during press for the show,
and she just said “I'm sure Amazon will have some thoughts about that."
So today, in September 2022, this is how things stand.
The Tolkien Estate owns the copyright to all of J.R.R. Tolkien’s literary works,
which are published by HarperCollins. Besides The Lord of the Rings and The Hobbit,
adaptation rights to all of the other Tolkien books – including
The Silmarillion – remain with the Tolkien Estate. Middle-earth Enterprises owns the motion picture,
gaming, merchandising, and stage rights to The Hobbit and The Lord of the Rings novels.
The Embracer Group owns Middle-earth Enterprises as a subsidiary company, having bought it from the
Saul Zaentz Company in August 2022. Through Middle-earth Enterprises,
dozens of companies have licenced rights to make various forms of merchandise and video games based
on the Lord of the Rings and Hobbit novels. Warner Brothers and its subsidiary New Line
Cinema owns the copyright to Peter Jackson’s Lord of the Rings and Hobbit movies, including
merchandise and video games based off those films. These films were made through a licencing
agreement with Middle-earth Enterprises that allowed them
to adapt Tolkien’s work in the first place. Whether this licencing agreement is still valid
is the subject of an ongoing dispute between Warner Brothers and Middle-earth Enterprises.
Amazon Studios owns the global television rights to television adaptations of the Lord of the
Rings and Hobbit novels, which they have used as the basis for their Rings of Power series.
So here at last, on the shores of the sea, comes the end of this video.
But the last pages are for you, dear viewer. Because two things are now clear to me,
as they should be to you. The first is the truth that,
for as long as people continue to get lost in the world Tolkien created all those years ago,
people will continue to looks for new ways to bring that world to life.
And the second is that it’s only a matter of time before the lawyers turn up and say
“well, I’m back”