The publisher HarperCollins UK has more than doubled its profits thanks to a hugely lucrative deal with Amazon for the rights to make multiple TV series based on The Lord of the Rings for its global streaming service.
The 200-year old book publisher said the Amazon rights deal had fuelled record profits of £24.9m for the year to the end of June 2018.
In November 2017, Amazon beat Netflix to a $250m deal with the Tolkien estate, HarperCollins and Warner Bros, which brought Peter Jackson’s Lord of the Rings and Hobbit films to the big screen in 2001-03 through its New Line cinema studio.
Amazon may invest as much as $1bn in total, including the rights, production and talent costs, to bring multiple series based on The Lord of the Rings to its Prime Video service. They are expected to be based on stories Tolkien wrote about his fictional world of Middle Earth that are set before but connected to the events of The Lord of the Rings.
Welcome to the Second Age: https://t.co/Tamd0oRgTw
— The Lord of the Rings on Prime (@LOTRonPrime) March 7, 2019
HarperCollins, the world’s second largest book publisher, which is owned by Rupert Murdoch’s News Corp, said a rise in revenues also helped its bottom line but conceded that the Amazon deal had made for a stellar financial performance.
“The increase in turnover contributed a portion of this [doubling of profit],” the company said in a Companies House filing published on Thursday.
“However, the main driver was a one-off deal with Amazon, where in conjunction with Warner Bros and the Tolkien estate we sold the rights for a multi-series TV show to be shown on Amazon Prime based on the Lord of the Rings Appendices.”
HarperCollins acquired the rights to Tolkien’s work in 1990, when it bought Allen & Unwin, which first published The Hobbit and The Lord of The Rings.
Amazon moved to strike the deal after its founder, Jeff Bezos, ordered executives to find a global hit in the vein of Game of Thrones, HBO’s mega-franchise that starts its final season this month.
In 2017, JRR Tolkien’s family settled a five-year, $80m legal action against Warner Bros over the merchandise rights to The Lord of the Rings and The Hobbit.
Priscilla Tolkien, the author’s daughter, and his estate, joined with HarperCollins to sue Warner Bros. The estate sold the rights to the films in 1969 along with some merchandising.
Harper Collins UK, which increased revenues by almost 5% to £194.7m, said an increase in the popularity of downloadable audio content had more than offset a continued decline in eBook sales.
