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?
There’s lots of material to use, more than just “There and Back Again”. Sounds like they’re going to tell some of the other stories and legends.
It could get out of hand. But I’ll be happy if they just get TABA right... the rest, mostly in the sequel I hope, is just sauce.
Or... they tell the other stories in flashback, interwoven through the basic TABA story, so we don’t meet Smaug until the second movie. Dang... I’ll bet that’s what they do.
No, it's been over who owns the story rights, and whether New Line was going to pay PJ what he thought he was owed for the last project.