New Zealand looks set to lose "The Hobbit" movies after a union row trashed the country’s image with Hollywood studios, jeopardizing its entire film industry, director Peter Jackson said Thursday.
In a move Prime Minister John Key described as a potential "tragedy" for New Zealand, Jackson said Warner Bros. executives would travel to the country next week and make arrangements to shift the production offshore.
"It appears we now cannot make films in our own country — even when substantial financing is available," the Oscar-winning director said in a statement.
"The Hobbit," a two-part prequel to "The Lord of the Rings" trilogy, has been dogged by a dispute between Jackson and the actors’ union NZ Equity, which last month persuaded its international counterparts to boycott the production.
The row centers on NZ Equity’s demand that Jackson allow it to negotiate minimum standards for actors, which the director has refused, saying it would set an unacceptable industry precedent.
Jackson said even if unions lifted the ban it would do nothing to keep the films in New Zealand because the damage to the country’s $3 billion (US $2.3 billion) a year film industry had already been done.
"Seemingly overnight, NZ Equity shredded the reputation of a burgeoning industry, which has been over 40 years in the making," he said.
Jackson said Warner Bros. was "quite rightly, very concerned about the security of their US $500 million investment."
New Zealand provided a stunning location for "The Lord of the Rings," which helped establish a thriving screen industry, boosted New Zealand’s tourism profile and catapulted Jackson to the A-list of Hollywood directors.
Key said the industrial action had undermined Warner’s confidence in New Zealand but he hoped to meet the studio executives during their visit next week in a last-ditch bid to change their minds.
"The government will have to sit down and talk to them and see what we can do to restore that confidence," he told reporters.
Jackson said the industry — which in recent years has hosted shooting for blockbusters such as "The Last Samurai" starring Tom Cruise, the "Narnia" chronicles and James Cameron’s "Avatar" — was now at risk.
"This will be the start of a domino effect, as word of New Zealand’s unstable employment environment registers with film investors and studios worldwide," the director said.
"The Hobbit" has already been stalled for years by wrangling over distribution rights, reported budget blowouts and financial woes at the MGM studio, prompting director Guillermo del Toro to quit earlier this year.
It received a studio green light last Saturday and will begin filming in 3D next February. The producers have previously mentioned Scotland, Canada, Ireland, Australia and eastern Europe as possible shooting locations.
Council of Trade Unions president Helen Kelly said plans to move offshore were driven by money, not the dispute over union representation, with some countries offering to double New Zealand’s 15 percent tax rebate on films.
"In the end, they will go where they can get the most money," she said.
Jackson’s wife and film-making partner Fran Walsh the pair would attempt to keep the film in New Zealand but Warner appeared keen on using the Leavesden Studios near London, where the "Harry Potter" movies were filmed.
"They’ve got a huge studio that Harry Potter have vacated that they own and they say would be perfect for us," she told Radio NZ, denying the possible move offshore was related to tax breaks.
