Warner’s Gets Worldwide Theatrical & Video Rights to ‘The Hobbit’

As part of deal, MGM will handle television licensing for the fantasy prequel

Warner Bros. and Metro Goldwyn Mayer have worked out an arrangement that carves up distribution rights to "The Hobbit."

As part of the pact announced Thursday, Warner's receives worldwide theatrical and video rights to the fantasy film, while MGM will handle international television licensing.

The companies also said that they would work together on the two-part prequel's marketing and release plans worldwide.

Production on the follow-up to "The Lord of the Rings" begins this February in New Zealand. Jackson, who helmed the the Oscar winning trilogy, will direct the two "Hobbit" films. 

Production was initially threatened when the New Zealand Actors' Equity announced it would boycott the production over what it felt were unfair labor terms, but the union lifted the ban after the studio said it would move filming elsewhere. 

The films are tentatively scheduled to be released on December 2012 and December 2013.

"The Hobbit" had been stuck in development hell for years, a victim of MGM's debt crisis. However, the studio exited Chapter 11 last month and is using part of a $500 million  line of credit to finance its half of the costly film. 

While the film was stuck in limbo, original director Guillermo del Toro left the project and was replaced by Jackson.