‘The Hobbit’ will stay in New Zealand, prime minister says (update)

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‘The Hobbit’s’ New Zealand saga finally appears to be over. The nation’s prime minister, John Key, announced Wednesday that his government had reached an agreement with the producers of the two ‘Hobbit’ movies to keep the $500-million production in his country.

‘I am delighted we have achieved 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 agreement comes after Key held talks with New Line Cinema President Toby Emmerich and other executives, who wanted assurances that the production would not be disrupted by labor unrest. They also were seeking additional financial sweeteners, which they received.

As part of the agreement, the government said it would broaden the criteria for its film fund, entitling the producers to receive an additional rebate of up to $7.5 million for each of the ‘Hobbit’ movies. The government also said it will offset $10 million in Warner Bros.’ marketing costs as part of a ‘strategic partnership’ with the studio to ‘promote New Zealand as both a film production and tourism destination.’

Warner Bros. and director Peter Jackson had threatened to move the project, which is expected to begin filming in February, following a labor dispute that had erupted between Jackson and New Zealand Actors Equity, which was seeking to provide union benefits to actors on ‘The Hobbit.’

Warner Bros., its New Line Cinema unit and co-financing partner Metro-Goldwyn-Mayer recently greenlighted production of ‘The Hobbit,’ which has had a history of setbacks that delayed shooting for years.

The dispute caused deep anxiety in New Zealand, where the film industry is one of the largest private employers. This week, more than 2,000 actors, crew members and technicians marched in the capital to support keeping the films in New Zealand.

Representatives of Warner Bros. had no immediate comment on the announcement.

[Warner, MGM and New Line issued their own statement on Friday: ‘New Line, Warner Bros and MGM are pleased to have concluded successful discussions with the New Zealand government this past week. We’d like to thank Prime Minister Key, his Cabinet and the other dedicated New Zealand officials for their support and cooperation, which helped assuage our concerns and enabled us to keep The Hobbit in its proper home of New Zealand. We’d also like to express very special appreciation to Peter Jackson, Fran Walsh and the people of New Zealand for their tireless support of The Hobbit and their commitment to maintain and grow their vibrant film industry. Filming is scheduled to begin in February 2011 and we look forward to returning to Middle-earth.’ ]

-- Richard Verrier