From Yahoo News:
NEW YORK - Peter Jackson and New Line Cinema have reached agreement to make J.R.R. Tolkien's "The Hobbit," a planned prequel to the blockbuster trilogy "The Lord of the Rings."
Jackson, who directed the "Rings" trilogy, will serve as executive producer for "The Hobbit." A director for the prequel films has yet to be named.
Relations between Jackson and New Line had soured after "Rings," despite a collective worldwide box office gross of nearly $3 billion — an enormous success. The two sides nevertheless were able to reconcile, with Metro-Goldwyn-Mayer Studios (MGM) splitting "The Hobbit" 50/50, spokemen for both studios said Tuesday.
"I'm very pleased that we've been able to put our differences behind us, so that we may begin a new chapter with our old friends at New Line," Jackson said in a statement. "We are delighted to continue our journey through Middle Earth."
Two "Hobbit" films are scheduled to be shot simultaneously, similar to how the three "Lord of the Rings" films were made. Production is set to begin in 2009 with a released planned for 2010, with the sequel scheduled for a 2011 release.
New Line Cinema is owned by Time Warner. Sony and Comcast are among the owners of MGM.
I was hoping Jackson would direct, but at least he's back on as exec. producer. I hope they continue with his vision of Middle-Earth, using the same sets, cast (i.e. Gandalf and Bilbo), and general direction. I don't want it to end up like Harry Potter, with drastic changes happening between the films (settings, dementors, etc.). It would destroy the world that Jackson has worked so hard to bring to life.
It appears that the story will be broken up into two films. How they will do this, I have no idea. I'm now rereading the Hobbit, in an attempt to figure out a good breaking point for the films.
In the end, I'm really anticipating this movie, as the Lord of the Rings trilogy is easily my favorite book series, and the Extended Editions of the films are easily my favorite movies. I can't wait until they're released in high def. :D