There is very little direct source material to speak of; The Hobbit and the LotR books take place much later, and the The Silmarillion and some other works take place much earlier. There are some notes and references here and there, but it's not much.

Overall, I feel that's a good thing because this way you can both incorporate aspects of the original canon yet also have some freedom to do your own thing, kind of similar how The Next Generation taking place almost 100 years after the original series gave the writers some freedom.

Of course, that doesn't mean it's actually any good. The first two series of TNG were notoriously bad (with a few exceptions) before it finally got on the right track and actually started making good stuff.

>If it's not faithful to the source, then it's just on the same level as unknown author

Yeah, kinda pointless to buy IP, only to then hire producers that don't understand what made the source material good.