Variety reports that Warner Bros. and the Saul Zaentz Co. are currently in private mediation to settle differences over license rights to film adaptations of key J.R.R. Tolkien’s works The Lord of the Rings and The Hobbit.
According to Variety’s sources, the argument stems from disagreement about whether the studio has met ongoing obligations needed to maintain the long-term license that it has held since the late 1990s.
In a statement to Variety, a Warner Bros. spokeswoman 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.
Warner Bros. earlier this week announced a release date for that film, and showed off the first samples of concept art.
As Variety points out, license deals such as this “often involve producers conducting a certain level of development and production activity by pre-determined dates, among other clauses.”
However, it is the Saul Zaetnz Co. (through its subsidiary, Middle-earth Enterprises) that holds the rights to exploit The Lord of the Rings and The Hobbit “in movies, video games, merchandising, live events and theme parks.”
Variety adds that this includes limited matching rights should the Tolkien Estate make movies or other content based on two Tolkien books published after his death: The Silmarillion, and The Unfinished Tales of Númenor and Middle-earth.
The Saul Zaentz Co. also recently announced that it will auction all its Tolkien IP rights. Universal and Warner Bros. are both reported to be interested.