...But at the moment it's a dank, nasty, filthy hole crawling with studio executives, accountants, and lawyers, lawyers, lawyers.
The current situation is: Peter Jackson et al. are very much interested in making a film version of J.R.R. Tolkien's "The Hobbit" but don't expect to for "three or four years." He currently has on his plate KING KONG, of course, to be followed by THE LOVELY BONES. But the larger problem holding up the works for anyone to make THE HOBBIT is the complicated situation regarding the book's film rights, currently split between two studios.
I've attempted to put together a brief history of the rights to THE HOBBIT, but the research time was limited and I couldn't fill in all the holes, so anyone feel free to clarify and/or correct. Many chunks are outright pasted from the ever-blessed Wikipedia (
www.wikipedia.org), AP reports, and anything else Google could get me. I plagiarize because I'm lazy.
Tolkien sold the film, stage and merchandise rights of "The Hobbit" and "The Lord of the Rings" to MGM/United Artists in 1968, for an estimated $10,000 to pay off a tax bill.
A side note is amusing: He very early (before LOTR had been finished, but The Hobbit was a hit) forbade that Disney should ever be involved in an adaptation of The Hobbit (Letters, 13, 1937): "It might be advisable […] to let the Americans do what seems good to them – as long as it was possible […] to veto anything from or influenced by the Disney studios (for all whose works I have a heartfelt loathing)."
UA never made a Tolkien film, and "most of" the film, stage, and merch rights were sold in 1976 to Tolkien Enterprises, a division of the Saul Zaentz Company, who held on to them for nearly two decades, rejecting other proposals to make a LORD OF THE RINGS film after Bakshi's attempt failed.
Jumping tracks over to Jackson and Fran Walsh, who (after THE FRIGHTENERS and their new interest in CGI innovations) desired to make a realistic live-action fantasy project. They settled on Tolkien, after realizing that they were constantly using his works for a reference point anyway while they were brainstorming ideas. The idea was to film THE HOBBIT first and then, if it was successful, THE LORD OF THE RINGS.
Their film HEAVENLY CREATURES had been distributed by Miramax, and at that time PJ entered a "first sniff" deal with the Weinstein brothers, meaning each would offer the other first refusal on suitable projects.
As it happened, Miramax had just rescued Saul Zaentz from financial disaster while he was in the throes of producing THE ENGLISH PATIENT. Funding for that movie had been abruptly withdrawn by the original studio just prior to commencement of shooting. So Harvey Weinstein had temporary ascendancy over Zaentz, to quote a friend who quoted PJ at a live event. PJ described the pair as "extremely canny, experienced, tough negotiators." However, Zaentz only held 50% of the film rights to THE HOBBIT, MGM/UA apparently still holding the distribution rights (possibly having to do with the television productions of Rankin/Bass' THE HOBBIT and THE RETURN OF THE KING in the late 70s -- it's all very murky). It became clear that it would be too complicated to structure a deal to film THE HOBBIT, but Miramax was confident a deal would be struck for the LOTR rights, which it got (as best I can work out) [I]under license from Tolkien Enterprises. PJ got the greenlight to start pre-production on LOTR.
After 18 months of preproduction, Miramax (and possibly at the orders of their Disney overlords) demanded a complete overhaul of PJ's proposed 2-film, $140 mil production plan, instead to make a single 2-hour film of the entire epic. Jackson's agent then managed to broker an expensive and unlikely exit strategy with Miramax, which ended up with New Line buying the Tolkien rights from Miramax as well as covering all $10 mil of preproduction expenses, among other sweetnesses for the Weinsteins.
After a series of twists and turns that included settling a lawsuit with United Artists, Saul Zaentz eventually sold the LOTR rights to New Line after approving a treatment put forward by Jackson. However, MGM retained the distribution rights for THE HOBBIT. It's unclear what rights Mr. Zaentz has going forward, although I'm fairly sure Tolkien Enterprises is still the primary rights holder, just going by the credits retained on the three LOTR films.
And so as it currently stands, New Line right now has the rights to [I]make THE HOBBIT, but MGM holds the rights to distribute THE HOBBIT in most major markets. No studio would make a movie of this scale without at least some of the distribution rights, so New Line's only option is to haggle with MGM. When MGM went up for sale last year, the situation looked as if it would be greatly simplified when Time/Warner -- New Line's parent company -- seemed to be the buyer. However, Sony won out and bought MGM/UA, adding yet another layer of complication.
For now, and as far as I could find, the two studios have not yet even begun negotiations on THE HOBBIT, although that has to be seen as an inevitability. For its part, last year New Line said it will pursue a deal only if Jackson takes on the project. NL head honcho Bob Shaye said, "A big reason for the [LOTR] franchise's success has been Peter. ... He's so passionate about the subject and we feel very loyal to him."
Shaye even went so far as to write an open letter (
http://www.thehobbitfilm.com/bobshaye.html) to a particularly vocal "make The Hobbit movie" fan site.
To make matters uglier, in the first few days of March of this year, Jackson's production company, Wingnut Films, sued New Line Cinema over profits from THE FELLOWSHIP OF THE RING. So, who's to say how eager he is to work with them again. Then just two weeks later, PJ told reporters while on a visit to Sydney there was a "desire" to make THE HOBBIT, but not before lengthy negotiations, and "I think it's gonna be a lot of lawyers sitting in a room trying to thrash out a deal before it will ever happen." Although this was ostensibly in regards to the complicated rights issues and referring to the two studios' lawyers, the irony and applicability is too broad to miss.
On the bright side, before the unfortunate lawsuit, PJ has publicly said "I am certainly interested in making THE HOBBIT. I definitely wouldn't want to see anyone else do it." Ian McKellan, who's said he preferred playing Gandalf the Grey to the White (more crotchety and interesting), and Andy Serkis have both publically said they'd be eager to reprise their Middle-earth roles.
When New Line and MGM do make it to the negotiating table, doubtless MGM will want to retain some sort of cut. According to an old Wall Street Journal article, a possible proposal could include the two sharing the costs and splitting the profit, with New Line taking the domestic distribution rights and MGM taking the international rights. Such a split isn't unusual -- in the case of the LOTR, New Line used independent distributors for the international release. "We're open to any discussions that the other rights holders would like to have," MGM Vice Chairman Chris McGurk told the WSJ.
...For now, THE HOBBIT sits undisturbed, quietly smoking, with no reason to expect a wizard at the door any time soon.