I suspect they will create a new story about the Hobbits, including his nephew, Frodo, and perhaps about the battles in which young Aragorn and Theoden, King of Rohan, faced together.
I’m afraid you’re right. They’re playing with fire if they do that. The story says the project has been tied up in litigation. Is taking liberties with the canon the reason?
Keep in mind too that there was a major event in that intervening 60 years: The Necromancer was driven out of Dol Guldur by the White Council, whereupon he revealed himself to be Sauron and reclaimed Barad Dur. There’s enough material there to make for an exciting movie all by itself.