New Zealand govt reaches deal to keep Hobbit films

New Zealand is to remain the home of The Hobbit after the government struck a $25-million deal with Warner Bros to stop the Hollywood film studio from moving the blockbuster movie production to another country.

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 $500-million and damage to the reputation of New Zealand’s film industry, Prime Minister John Key stepped in, negotiating a deal to keep the project that was announced on Wednesday.

“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 Zeaand,” Key told a news conference.

He said the government would introduce legislation into Parliament on Thursday to change local labour laws at the heart of the film dispute which sparked protests on the streets of the country.

“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.

Subsidy programme
As part of the deal to keep The Hobbit movies, New Zealand will also expand its film subsidy programme for big budget movies, paying an extra $7,5-million to Warner Bros 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 $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.”

Economists had estimated that the loss of the project could cost New Zealand up to $1,5-billion. – Reuters

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