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'Hobbit' to Stay in NZ; Gov't Offers WB Incentives to Save Middle Earth

Oct 27, 2010 | 4:12am EDT

ALTOn Wednesday evening (local New Zealand time), it was announced by Prime Minister John Key that the Hobbit movies will indeed be made in New Zealand.

As part of the deal to keep the films, the NZ government will introduce legislation on Thursday that clarifies the distinction between independent contractors and employees as it relates to the film industry only.

In another concession, tax rebates will be changed for Warner Bros., which will mean up to an extra $7.5 million per movie. Further, the government will offset $10 million of Warner Bros.' marketing costs as part of a strategic partnership.

"The industrial issues that have arisen in the past several weeks have highlighted a significant set of concerns for the way in which the international film industry operates," Key said, according to The New Zealand Herald.

"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 this country. This will guarantee the movies are made in New Zealand," he added.

"I am delighted we have achieved this result, said Key. "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 NZ on the world stage."

Regarding the financial incentives NZ is ponying up, Key said, "The government has moved to widen the qualifying criteria for the large-budget screen production fund, to improve New Zealand's competitiveness as a film destination for large budget films like The Hobbit."

The Government and Warner Bros. further agreed to work together in a long-term strategic partnership to promote New Zealand as both a film production and tourism destination.

New Zealand will also host one of the world premieres of the Hobbit movies.

"We are in the middle of commercial negotiations for two of the largest movies that Warner Bros. have ever made. In the end, the government had to make a call: Did it want to secure those movies for New Zealand? I for one think we got the package right," Key, who is also New Zealand's minister of tourism, said, according to The Wall Street Journal.

(Although Peter Jackson and Warners had yet to comment as of this writing, there's a message of thanks over at on behalf of the Weta Workshop family.)

In other news, Jackson released a letter earlier in the day which he said proved the actors' unions had already decided to blacklist The Hobbit before requesting a conversation with him.

"It was the first time a meeting was ever requested and it was clear from the letter they had already voted to blacklist us, before even asking for one conversation with me," he said.

"I am sick and tired of hearing [union NZ Actors] Equity say 'All we ever wanted was a meeting', because it's disingenuous. They fail to add that from the outset, they had a gun to our head."

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