Yahoo News Embracer Group Paid $395 Million for ‘Lord of the Rings’ Rights
Embracer Group, the Swedish gaming conglomerate that snapped up the rights to “Lord of the Rings” and “The Hobbit” in a surprise deal last summer, has finally revealed how much it paid — and it seems like they got a bargain.
The Karlstad-headquartered company has confirmed it spent SEK 4.2 billion — $395 million at today’s conversion rates — to acquire Middle-Earth Enterprises from the Saul Zaentz Company last August.
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At the time the deal was announced, Embracer and Saul Zaentz declined to say how much the “Lord of the Rings” holding company had sold for. But estimates at the time projected the rights – which include worldwide rights to films, video games, board games, merchandising, theme parks and stage productions — were worth up to $2 billion.
It turns out the reality fell significantly short of that.
For contrast, Amazon is rumored to have paid $250 million alone for the rights to make the TV series “The Rings of Power,” which they snapped up directly from the J.R.R. Tolkien estate (the right to make a “LOTR” TV series longer than eight episodes was one of the few interests in the franchise not owned by Saul Zaentz).
Amazon Games have also struck their own deal with Embracer to develop and publish a new massive multi-player online game based on “Lord of the Rings.”
The sales figure for Middle-Earth Enterprises was revealed today in Embracer’s annual report, which comes just a week after the games group revealed an aggressive cost-cutting program, including layoffs, games studio closures, consolidations and restructures.
The need for the savings measures, unveiled by CEO and co-founder Lars Wingefors, was put down to a spate of recent acquisitions – in addition to Middle-Earth Enterprises, Embracer has also bought comics publisher Dark Horse, anime company Anime Limited, the rights to “Tomb Raider” and a number of video games studios over the past couple of years – coupled with the economic downturn and the last-minute collapse of a significant deal that had been months in the making.
“Unfortunately, one ground-breaking strategic partnership agreement that would have set a new benchmark for the gaming industry did unexpectedly not materialize,” Embracer said of the defunct deal in the annual report.
The gaming company also admitted that its acquisition of Middle-Earth Enterprises had “impacted cash flow” to the tune of SEK 2.9 billion ($267 million).
For “Lord of the Rings” lovers, at least, the annual report brings a smattering of good news with the promise of “several world class products” based on the Tolkien universe set to be delivered in the next two decades while adaptations in other media are also in the works. In Feb., Embracer revealed it had struck a multi-year deal with New Line Cinema and Warner Bros. Pictures for “agreement covers “multiple feature films” based on Tolkien’s works.
Comics fans also have something to look forward to, according to Embracer’s annual report, which says that Dark Horse “has a healthy pipeline of projects in production in its entertainment business, with new streaming services and increasing competition creating a solid demand for content libraries despite a more challenging end market.” The comics publisher is also exploring “novels, comics, merchandising and media development.”
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