• The Hollywood Reporter on LinkedIn
  • Follow THR on Pinterest

New Zealand to 'Fight Like Hell' for 'The Hobbit'

When Warner Bros. production executives touch down in New Zealand next week they'll get a welcome they'll never forget, with lobbying planned from the Kiwi prime minister, cabinet ministers and producer-director Peter Jackson -- an industry-wide united front and simultaneous rallies by non-union-aligned actors in five cities up and down the country.

Their desperate mission: keep the $500 million Hobbit films in New Zealand in the aftermath of a month-long, but now-ended, boycott by actors unions across the English-speaking world and amid reports that the studio is paving the way for a move to the UK.

But it might be a lost cause. Warners New Line unit confirmed Thursday that it is still considering shooting The Hobbit at alternate locations outside of New Zealand.

That possibility helped drive down the value of the Kiwi dollar, according to RBC Capital Markets foreign exchange strategists as reported in the Wall Street Journal.

 In a statement, the studio blamed NZ Actors Equity and its Australian parent -- the Media, Entertainment and Arts Alliance -- for demanding that the studio take part in union negotiations. "We have refused to do so, and will continue to refuse to do so," the statement said. "The actions of these unions have caused us substantial damage and disruption and forced us to consider other filming locations for the first time."

New Line denied reports that SAG, AFTRA and NZ Equity agreed to lift their boycott of the production a number of days ago and that the studio asked them to delay the announcement. Calling that version of events "false," a New Line spokesperson said, "It was not until last night that we received confirmation of the retractions from SAG, NZ Equity and AFTRA through press reports."

Nonetheless, THR has reviewed emails provided on a confidential and U.S.-exclusive basis showing that an agreement to lift the "do not work" order was actually reached Sunday Los Angeles time (Monday in NZ).

The emails do not indicate the reason for the delayed announcement.

However, Helen Kelly of New Zealand's Council of Trade Unions told THR: "As of Sunday night, Warners knew that the boycott had been lifted. We were waiting for them to issue the press release because they asked to do the first release. Why would we antagonize them?"

The New Line statement continued, "We are still awaiting retractions from the other guilds. While we have been attempting to receive an unconditional retraction of the improper Do Not Work Orders for almost a month, NZ Equity/MEAA continued to demand, as a condition of the retractions, that we participate in union negotiations with the independent contract performers, which negotiations are illegal in the opinion of the New Zealand Attorney General."

MEAA's Simon Whipp disagreed, telling THR that the union has "provided them with legal advice that this is not the case."

Whipp added, "This week we sat down with the Screen Production and Development Association to discuss conditions of engagement of performers in New Zealand generally."

Whipp said that meeting demonstrates that union negotiations are not in fact illegal.

Meanwhile, events in New Zealand have reached a fever pitch, with charges, countercharges, cabinet ministers deployed in the media on a daily basis, canceled union meetings, and a gathering of 1,500 pro-Hobbit workers earlier this week that turned into a several hundred person march on parliament.

The threat to Hobbit appears real even as the ultimate outcome is impossible to predict. Jackson revealed Thursday that Warner Bros. would "begin preparations [next week] to move the production offshore" and the UK has emerged as the front runner to host the project.

Scotland, Ireland, Canada, Australia and the Czech Republic had previously been identified as possible production locations.

However, Jackson's co-producer Fran Walsh told Radio New Zealand that Warners had location scouts in the UK and had told them that a former Rolls Royce factory that the studio owns there would be "perfect" for them and The Hobbit.
 
The factory has sound stages that were used in another medieval drama, the Harry Potter films.

MEAA's Whipp contested the assertion that the studio is exploring a move, telling THR, "To our knowledge flights for performers are being booked, people are being contracted, sets are being constructed, crew are being hired, and the film has a start date of February next year in Wellington," the country's capital.

Warners asserts its actions stem from the labor dispute with NZ Actors Equity that Jackson said in an interview with TV New Zealand has "damaged the studio's confidence in New Zealand as a stable place to make movies."
 
Nevertheless, Jackson said they would "fight like hell" to "get this film back" but was "wracking his brains" on how to give Warner Bros. some certainty when they arrive in the country next Monday.

"One month ago, no one in a million years thought this movie was going to leave [New Zealand]. At that point the confidence in our country as a stable base to make movies was eroded. Is the movie going to come or go? We don't know. Warners are coming here next Monday and we've got to fight like hell," Jackson told TV New Zealand.

Ironically, Monday is that country's Labor Day.

[pagebreak]

Underscoring Jackson's statements, SPADA said Thursday that "due to the recent industrial unrest, The Hobbit's future in New Zealand is very precarious, and has resulted in considerable damage to New Zealand's international reputation as a shooting and production location."

However, CTU's Kelly said threats to move the production offshore were financially motivated, with Warners wanting additional tax breaks over and above the 15% Large Budget Screen Production Grant that the government would provide the film. A SPADA spokesperson denies this.

"To suggest that the film may move purely because of superior tax incentives or subsidies being offered by other countries is spurious and deflective," the spokesperson said.

The organization added, "Prior to this industrial action being taken, The Hobbit was to be filmed in New Zealand" - a claim that Kelly has previously denied.

SPADA continued, "By creating a climate of uncertainty and unrest, and prolonging it by not lifting the 'boycott,' the door that was previously shut was opened for other countries to strenuously lobby for the production to move."

In a radio interview, Kiwi economic development minister Gerry Brownlee said he would not get involved in a bidding war with other countries. Whether he can hold the line in the face of possible pressure from Warners is unknown.

Brownlee said his meetings with Warner Bros. officials "have entirely centered on the industrial relations situation here," and added that an increase in incentives is "not on the table."

Brownlee also claimed to know of other foreign productions that "were to come to New Zealand that are now on hold while they watch what happens here."

He said the dispute could force legislative change which some commentators argue would effectively lock unions out of the New Zealand film industry.

In Brownlee's words, the legislation would be to "clarify what the employment status is of actors and others who are employed on contracts on this sort of production." The country's attorney general opined several weeks ago that unionization of independent contractors, such as the country's actors, was impermissible under local law. NZAE has dismissed that claim.

Underscoring the bitterness of the dispute, CTU's Kelly last week described the country's leadership as "a right-wing government, very anti-union."

Despite the swirling controversy, some progress has been made towards keeping the production in-country.

SAG and AFTRA yesterday removed their "do not work" orders on The Hobbit at the request of New Zealand Actors Equity. Canada's ACTRA followed suit.

In any case, Jackson and others countered yesterday that the damage had already been done.

[pagebreak]

On a broader front, SPADA outlined an agreement with NZAE that aims to "restore the confidence of the international and domestic film financing and production communities, and to ensure a peaceful stable period."

That interim agreement is based on the existing "Pink Book" which covers contracts and working conditions for actors and will form the basis for ongoing industry negotiations.

Although Brownlee and others have attacked NZAE as a tool of its parent Australian union, the Pink Book is actually a pre-existing compendium of guidelines agreed to by SPADA and NZAE. The guidelines are non-binding. SPADA CEO Penelope Borland said that the new interim agreement covered any films entering into pre-production before March 31.

NZAE said "the discussions between SPADA and NZ Equity have no application to the production of The Hobbit, and the contracting of performers on The Hobbit is in no way contingent on the outcome of those discussions."

However, the union later said that it had "provided a clear undertaking" that NZAE would not move against the production, a statement that SPADA echoed.

"Equity has contracted with us that they will not enter into any negotiations or undertake any industrial action against those productions [that began pre-production before March 31] or encourage or facilitate any of its affiliate bodies or members to do likewise," SPADA's Borland said.

For their part, NZAE president Jennifer Ward Leland last night told the New Zealand Press Association, "We can provide absolute certainty that industrial issues are no longer a barrier to The Hobbit's production in New Zealand."