A short-lived union boycott prompted Warner Bros. representatives to travel to New Zealand this week to review the studio’s decision to shoot Peter Jackson’s two-part adaption of JRR Tolkien’s fantasy in New Zealand.
Fearing the loss of the project worth an estimated US$500 million and damage to the reputation of New Zealand’s burgeoning film industry, Prime Minister John Key stepped in, negotiating a deal to keep the two-movie project.
“An agreement has been reached between the New Zealand government and Warner Bros. that will enable the two Hobbit movies to be directed by Sir Peter Jackson to be made in New Zealand,” Key said.
Jackson’s adaptation of Tolkien’s Lord of the Rings proved beneficial to everyone: New Zealand received priceless international publicity, Warner Bros. sold nearly $3 billion worth of tickets at the box office, and the filmmaker and his team won armfuls of Oscars.
Key said the government would introduce legislation into parliament on Thursday to change local labour laws at the heart of the dispute which sparked protests on the streets of the country.
The row erupted when actors’ unions said the movie’s producers would not allow them to negotiate a minimum wage and working conditions for their members.
“We will be moving to ensure that New Zealand law in this area is settled to give film producers like Warner Bros. the confidence they need to produce their movies in New Zealand,” said Key.
As part of the deal, New Zealand will also expand its film subsidy program for big budget movies, paying an extra US$7.5 million for each Hobbit movie.
Key said Warner Bros. had also agreed to a joint marketing deal with the New Zealand government which would promote the country as a film production and tourism destination.
The government will offset US$10 million of those costs.
“I am delighted that we have reached this result,” Key said in a statement.
“Making the two Hobbit movies here will not only safeguard work for thousands of New Zealanders, but it will also follow the success of the Lord of the Rings trilogy in once again promoting New Zealand on the world stage.”
The threat to take the project offshore, which economists said could cost New Zealand US$1.5 billion, brought thousands of people into the streets earlier this week.
Film subsidies were originally expected to run to about US$50 million, and some union members had argued that Warner Bros. was using the industrial disagreement – which centered on working conditions – to wrangle a better deal from the government.
The Hobbit is based on the adventures of Bilbo Baggins, a hobbit who lives in the land of Middle-earth that is filled with wizards, elves and other fantasy creatures. Bilbo goes on a quest to find treasure guarded by a dragon.
The book, first published in 1937, is the precursor to the Lord of the Rings trilogy which also takes place in Middle-earth.