‘Lord of the Rings,’ ‘The Hobbit’ Film, Merchandise, Theme Park and Gaming Rights Sold to Video Games Company Embracer

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Middle Earth Enterprises, the holding company that owns all of J.R.R. Tolkien’s works including “Lord of the Rings,” “The Hobbit” and more, has been sold to Swedish gaming conglomerate Embracer.

The rights include movies, books, theatrical productions, video games, theme parks and merchandise in Tolkein’s most famous literary works – “Lord of the Rings” and “The Hobbit” – as well as “matching rights” in other literary works related to Middle-earth and authorized by the Tolkien Estate and HarperCollins, primarily “The Silmarillion” and “The Unfinished Tales of Numenor and Middle-Earth,” two compilations which were published after the writer’s death in 1973.

In February of this year, Variety exclusively revealed that the previous owner, the Saul Zaentz Co., was looking to sell.

The rights, which will be housed under a subsidiary called Embracer Freemode, were sold for an undisclosed amount however pre-sale estimates suggested the value of the properties was at least $2 billion.

It was initially expected that a Hollywood company might snap up Middle Earth Enterprises, with Amazon being the likeliest contender given they are about to release “Lord of the Rings: The Rings of Power” series. Instead, the Karlstad, Sweden-based conglomerate – which already holds a license to publish board games and card games based on “Lord of the Rings” and “The Hobbit” under subsidiary Asmodee Group – has emerged victorious.

ACF Investment Bank advised the Saul Zaentz Co. on the sale.

It is the second high-profile acquisition in the last 12 months for Embracer, whose primary business is making PC and console games, after they purchased independent comics company Dark Horse – publisher of “Hellboy,” “The Umbrella Academy” and hundreds of other familiar titles – in December of 2021 for an undisclosed amount.

“I am truly excited to have ‘The Lord of the Rings’ and ‘The Hobbit,’ one of the world’s most epic fantasy franchises join the Embracer family, opening up more transmedia opportunities including synergies across our global group,” said Lars Wingefors, founder and group CEO of the Embracer Group. “I am thrilled to see what lies in the future for this IP with Freemode and Asmodee as a start within the group. Going forward, we also look forward to collaborating with both existing and new external licensees of our increasingly stronger IP portfolio.”

Marty Glick, COO of The Saul Zaentz Co. added: “We at the Zaentz Company have had the honor over the past half century of stewarding the Tolkien rights so that ‘Lord of the Rings’ and ‘Hobbit’ fans worldwide could enjoy award winning epic films, challenging video games, first rate theatre and merchandise of every variety. We could not be more thrilled that it is Embracer now taking up the responsibility and we are confident their group will take it to new heights and dimensions while maintaining homage to the spirit of these great literary works.”

In the decades since Tolkien’s death there have been a number of legal wrangles over the rights to his literary creations, including years of litigation between Tolkien’s estate and Warner Bros., which, through New Line Cinema, produced Peter Jackson’s blockbuster trilogy “Fellowship of the Ring” (2001), “The Two Towers” (2002) and “The Return of the King” (2003). That was settled out of court in 2017.

There was also said to be some disagreement between the Zaentz Co. and Warner over rights, with the Zaentz Co. maintaining that Warner’s substantial live-action film rights in “Lord of the Rings” and “The Hobbit” had lapsed because they were not actively developing new content. In 2021, New Line Cinema announced it was planning a stand-alone original anime theatrical feature titled “The Lord of the Rings: The War of the Rohirrim.” It is unclear what will happen to that now. Variety has reached out to Warner Bros. Discovery for comment.

Entrepreneur Saul Zaentz, who died in 2014, originally acquired a number of rights to Tolkien’s works – including film adaptation – in 1976. Left out of the original deal, however, was the right to produce a TV series more than eight episodes long. This loophole meant that Amazon were able to negotiate directly with Tolkien’s estate to make the TV series and it is unclear whether the sale to Embracer will have any impact on the series, which launches next month.

Variety has reached out to Amazon for comment.

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‘Lord of the Rings,’ ‘The Hobbit’ Film, Merchandise, Theme Park and Gaming Rights Sold to Video Games Company Embracer

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