The Tolkien Rights Saga

What happened

In 1969 J. R. R. Tolkien was in his late seventies, rich in readers after the American paperback boom (see The Ace Paperback Affair) and worried about taxes. He sold the film, stage, and merchandising rights to The Hobbit and The Lord of the Rings to United Artists, reportedly for about £100,000 plus a 7.5 percent share of receipts from any adaptation. The literary copyrights — the right to publish the books — stayed with Tolkien and, after his death in 1973, with his estate, whose literary executor was his son Christopher Tolkien. That split between the words on the page and everything else is the root of the whole saga.

United Artists commissioned scripts, including one by John Boorman, but made nothing. In 1976 it sold the rights to Saul Zaentz, the Berkeley record executive whose Fantasy Records fortune had just financed One Flew Over the Cuckoo's Nest. Zaentz folded them into a division called Tolkien Enterprises in 1977, and the next year produced Ralph Bakshi's rotoscoped The Lord of the Rings, which covered only the first half of the story. A year earlier, Rankin/Bass had broadcast its own animated Hobbit on American television; Arthur Rankin later said the book was in the public domain in the U.S. at the time, a position the rights holders disputed.

Zaentz's company policed the name aggressively. TSR had republished an unlicensed board game, Battle of the Five Armies (1975), and in the late 1970s was served with legal papers; accounts differ on exactly when. Gary Gygax recalled a threat of half a million dollars in damages. The upshot is still visible in every edition of D&D: later printings replaced hobbits with halflings and ents with treants, and the balrog-like demon eventually became the balor. Licenses went instead to others — Iron Crown Enterprises obtained the tabletop license in 1982 and published Middle-earth Role Playing in 1984.

Why it mattered

The deal Tolkien signed in 1969 decided who could make Middle-earth for the next half century. When Peter Jackson began pursuing the books in 1995, he had to go through Zaentz; the project began at Miramax and moved in 1998 to New Line Cinema, which agreed to make three films. The resulting The Lord of the Rings film trilogy earned close to $3 billion, and nearly everyone with a claim then went to court. Zaentz sued New Line in 2004 for about $20 million in royalties and settled in August 2005. Jackson's company sued in early 2005 over the accounting on the first film; that dispute was resolved in December 2007.

The largest suit came from the Tolkien side. In February 2008 the Tolkien Trust and HarperCollins sued New Line in Los Angeles, invoking the 1969 contract's share of gross receipts and claiming more than $150 million. It settled in September 2009 on confidential terms — the Tolkien Trust's accounts later showed a payment from New Line of £24 million — and the settlement explicitly cleared the way for The Hobbit, which Jackson made as three films in 2012–14. A second estate suit, filed in 2012, argued that the 1969 license covered tangible goods such as figurines and clothing, not online slot machines and digital games; it ended in a confidential settlement in July 2017.

Zaentz's company also drew public anger for demanding that small British businesses — most famously a Southampton pub called The Hobbit — stop using the word, a campaign criticized by Stephen Fry in 2012.

Legacy

The saga keeps producing new chapters. In November 2017 Amazon struck a separate deal for global television rights, working with the estate, HarperCollins, and New Line; the price was widely reported at about $250 million, before production costs. The result, set in the Second Age and drawn largely from the appendices, premiered in September 2022 as The Lord of the Rings: The Rings of Power. Christopher Tolkien, who had disliked the Jackson films, resigned as a director of the estate in 2017 and died in January 2020.

Zaentz died in January 2014. On 18 August 2022 the Swedish games conglomerate Embracer Group announced it was buying Middle-earth Enterprises, as Tolkien Enterprises had been renamed in 2010; terms were not disclosed. Its licensees now include Warner Bros. for films and games, Games Workshop for miniatures, and Free League Publishing (Fria Ligan), publisher of The One Ring Roleplaying Game. Online games such as Turbine's The Lord of the Rings Online likewise operated under the Middle-earth license. In February 2023 Warner Bros. Discovery announced a new agreement for more live-action films, and in May 2024 unveiled the first: The Lord of the Rings: The Hunt for Gollum, directed by and starring Andy Serkis, with Jackson, Fran Walsh, and Philippa Boyens producing, now scheduled for 17 December 2027.

The result is a fantasy world owned in layers. The books belong to the estate; the films, games, and merchandise pass through whoever holds the 1969 rights; and fans, designers, and publicans have learned — sometimes from a lawyer's letter — which is which.