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Hobbit Film Worth $500 Million May Quit N.Z. Location

The backers of “The Hobbit” movie may move the $500 million production out of New Zealand after an actors’ union dispute undermined confidence in the country’s film industry, according to the movie’s director.

Warner Bros Productions Ltd. executives will visit New Zealand next week and plan to move the production offshore, according to a statement from Peter Jackson. New Zealand Actors’ Equity, backed by Australia-based Media, Entertainment and Arts Alliance, recommended people delay accepting work on the two-film prequel to the “Lord of the Rings” trilogy until producers offer union contracts.

New Zealand’s film industry boomed after Jackson made the Lord of the Rings films, and was worth NZ$2.8 billion ($2.1 billion) in 2009, according to a Statistics New Zealand report. Hiring film crew and equipment added about NZ$350 million to the economy in a three-year period to March 2002, according to a report by the New Zealand Institute of Economic Research.

“It appears we now cannot make films in our own country, even when substantial financing is available,” said Jackson in the statement. “Seemingly overnight, NZ Actors Equity shredded the reputation of a burgeoning industry, which has been over forty years in the making.”

The union advised Warner Bros on Oct. 17 that it asked the Screen Actors Guild to lift the workers’ boycott, according to a statement today from the New Zealand Council of Trade Unions. The union is seeking agreement on basic terms and conditions such as hours and breaks, according to the statement.

Warner Decision

Jackson will try to keep the filming of “The Hobbit” in New Zealand, he said in the statement. The decision “ultimately belongs” to Warner Bros, he said.

New Zealand Prime Minister John Key said the government may meet with Warner Bros when the executives visit, according to He blamed the potential location shift on the actors’ unions, the website reported.

“It’s a dreadful situation and it’s going to take a bit of work even to get future productions into good shape,” Gerry Brownlee, the minister for economic development, told Television New Zealand this morning.

The Rings trilogy, based on J.R.R. Tolkien’s fantasy epic, generated $2.9 billion in worldwide box-office receipts and another $3 billion from DVDs, merchandise and other sources.

Production of “The Hobbit” has suffered a number of delays including the withdrawal of director Guillermo del Toro in May, and a fire at Wellington’s Portsmouth Miniatures Studio, where parts of the film were to be shot.

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