The Lord of the Rings The Lord of the Rings

Swedish entertainment conglomerate Embracer Group, through its subsidiary Freemode, has agreed to acquire Middle-earth Enterprises, a division of the Saul Zaentz Company, which owns the global rights to films, video games, board games, merchandising, theme parks, and stage productions relating to J.R.R. Tolkien’s The Lord of the Rings trilogy and The Hobbit, as well as matching rights in other Middle-earth related literary works from the Tolkien Estate and publisher Harpercollins.

The Saul Zaentz Company first acquired the rights to The Lord of the Rings and The Hobbit in 1976, in an arrangement with United Artists to produce Ralph Bakshi’s animated version (pictured atop), released in 1978.

Purchase details:

  • Embracer is based in Karlstad, Sweden, and owns an ever-expanding catalog of video game and board game companies including THQ Nordic, Plaion, Coffee Stain, Amplifier Game Invest, Saber Interactive, DECA Games, Gearbox Entertainment, Easybrain, and Asmodee. The company announced yesterday that it has also acquired Limited Run games, Tuxedo Labs, and Tripwire Interactive. Embracer boasts 120 internal game development studios and employs more than 12,750 people in over 40 countries.
  • According to Embracer, the company is exploring opportunities including movies based on iconic characters such as Gandalf, Aragorn, Gollum, Galadriel, Eowyn, and others, and wants to continue to provide new opportunities for fans to explore the fictive world through merchandising and other experiences. Embracer’s operative group Asmodee Group already licenses The Lord of the Rings and The Hobbit through board games and card games.
  • Warner Bros. and New Line Cinema are currently working on the anime feature, The Lord of the Rings: The War of the Rohirrim, set to hit theaters in 2024. A prequel to The Lord of the Rings film trilogy, the animated film expands “the untold story behind the fortress of Helm’s Deep, delving into the life and bloodsoaked times of one of Middle-earth’s most legendary figures; the mighty King of Rohan – Helm Hammerhand.” Kenji Kamiyama (Blade Runner: Black Lotus) will direct the film from a screenplay by Jeffrey Addiss and Will Matthews (The Dark Crystal: Age of Resistance).
  • Literary rights still belong to the Tolkien estate, while some film rights belong to Warner Bros. (the exact rights that WB owns is a subject of dispute between the studio and Zaentz’s Middle-earth Enterprises). Meanwhile, the Tolkien estate owns the rights to produce tv series longer than eight episodes, meaning that Amazon’s upcoming series The Lord of the Rings: The Rings of Power was approved through the estate and not Zaentz Company. Even with all these asterisks to the deal, Embracer Group obviously saw an opportunity to exploit Tolkien’s work across the 100+ game divisions it owns.
  • The financial terms of the deal were not disclosed by either company, however Embracer revealed that it has recently spent SEK8.2 billion (Usd$774 million) on a series of six acquisitions. It would be safe to assume that the largest portion of that amount is being used for the Middle-earth Enterprises deal.
  • Skadden, Arps, Slate, Meagher & Flom LLP acted as legal advisor to Embracer Group. Arnold & Porter acted as legal advisor and ACF Investment Bank acted as investment banker to The Saul Zaentz Company.
  • In December of last year, Embracer purchased independent comics publisher Dark Horse, taking the rights to the likes of Hellboy, The Umbrella Academy, Sin City, and many other popular franchises.
  • Lars Wingefors, founder and group CEO at Embracer Group, said in a statement: “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. 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.”