The Lord of the Rings has a new rights owner. What does that mean?

The Lord of the Rings has a new rights owner. What does that mean? ...

Embracer Group, a Swedish gaming conglomerate that is seeking acquisitions, has purchased the rights to produce films, games, merchandise, and theme parks based on J.R.R. Tolkiens The Lord of the Rings and The Hobbit.

The purchase price for the rights was apparently unconfirmed by Variety. The company is expected to sell the rights to the Saul Zaentz Company earlier this year. The Lord of the Rings: The Rings of Power is a prime example.

Embracer announced the purchase along with five other, smaller acquisitions: Limited Run Games, the publisher of collectible physical editions of games; Tripwire Interactive, the developer and publisher of games such as Killing Floor and Maneater; Singtrix, a company that develops vocal effects technologies for karaoke and gaming; and Tuxedo Labs, the creator of the destruction game Teardown.

Embracer stated that the anticipated total cost of acquiring the six businesses over a period of time will be 8.2 billion Swedish krona, or around $788 million. Even if we assume that Middle-earth Enterprises will make up the majority of that amount, its still less than half of what the prized Lord of the Rings rights would fetch.

What occurred? And why was Amazon or another major entertainment industry player hesitant to take a look?

Middle-earth Enterprises and now Embracer have the worldwide rights to produce films, video games, board games, merchandise, theme parks, and stage productions related to the Lord of the Rings trilogy and The Hobbit. However, there are several limitations, exceptions, and red flags as to the scope of these rights.

The publishing rights to Tolkien's other Middle-earth titles, The Silmarillion and The Unfinished Tales of Numenor and Middle-earth, remain with the Tolkien estate and HarperCollins. Embracer claims to now have the rights to match any offer the owners may receive from elsewhere.

The right to make a TV series longer than eight episodes was carved out of the Tolkiens estate's agreement back in the 1970s, thus Amazon was able to contract directly with the estate when it bought those rights in 2017, eliminating Middle-earth Enterprises from the deal. However, Embracer claims that Middle-earth Enterprises has financial interests in The Rings of Power, as well as the EAs in-development mobile game Heroes of Middle-earth.

The extent of the film rights Embracer has just purchased is questioned. Warner Bros. through its subsidiary New Line Cinema, the studio behind Peter Jackson's Lord of the Rings and Hobbit trilogy, has held the rights for years, but the Saul Zaentz Co. was arguing that the rights would be restored in 2021 because Warner Bros. had not been actively working on new film projects. It's possible that The War of the Rohirrim was approved precisely so Warner Bros. lawyers could litigate this claim

Thats a lot of asterisks. In particular, if there have been changes in the legal dispute with Warner Bros. that have made the film rights appear even less secure, that would have deterred many Hollywood buyers, and reduced the asking price for Middle-earth Enterprises.

Embracer may not be as concerned. The company recently acquired Asmodee, a company that has been distributing Lord of the Rings licensed titles for years, and it may well consider the gaming rights as the jewel in the crown of this deal.

The $300 million deal with Square Enix appeared to be a bargain, while for its part, the company was said to be glad to have gotten rid of its Western subsidiary. It appears Embracer has once again swooped in on a desperate seller, and purchased the rights to a precious fantasy franchise however disputed or limited for a song.