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Film producer says Hobbit deal 'terrific'

Published: 7:17PM Wednesday October 27, 2010 Source: ONE News/NZPA

A leading Kiwi film and television producer believes the government's deal with Warner Bros is a good one.

John Barnett told TVNZ News at 8 that the deal was "terrific".

"Under the original scenario there would have been a 15% rebate, which would have been $75 million. So what the Prime Minister has done is negotiated a deal where another $US15 million... has also been put into the pot for Warners," Barnett said.

"But the trade-off is an enormous trade boost for New Zealand, a tourism boost. I think he's done a great deal."

Ministers signed the agreement at 7pm after two days of crisis talks with studio executives who wanted more money than the government was prepared to give, and sought assurances there was no possibility of legal disputes that could hold up production.

Prime Minister John Key then announced that The Hobbit movies have been saved for New Zealand.

"This will mean an additional rebate for The Hobbit movies of up to $US7.5 million dollars per picture, subject to the success of the movies," Key said.

The agreement will also see labour law changes pushed through Parliament tomorrow.

The $670 million movies will be directed by Sir Peter Jackson, and Key said tonight a long-term partnership had been achieved for New Zealand's $2.8 billion film industry.

He said he was satisfied with the outcome.

"I'm delighted we have achieved this result. Making the two movies here will not only safeguard work for thousands of New Zealanders but will also allow us to follow the success of the Lord of the Rings trilogy in once again promoting New Zealand on the world stage."

Part of the arrangement will see new legislation introduced to clarify the distinction between independent contractors and employees. The bill will go through Parliament under urgency, and Key said he already had enough support to ensure it was passed.

Key said the law change would relate "only to the film production industry. It is this clarification that will guarantee the movies are made in New Zealand.

"We will be moving to ensure that New Zealand law in this area is settled to give film producers like Warner Brothers the confidence they need to produce their movies in New Zealand.

"This is commercial reality," Key said. "Without this change, those movies would not be made in New Zealand."

Sweeteners and pay-offs

Key also announced a sweetener aimed at making it more attractive for other production companies, along with Warners, to film in New Zealand.

"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."

He added that the government and Warner Bros have agreed to work together in a long-term strategic partnership to promote New Zealand as both a film production and tourism destination.
But that will come at a cost.

"The government will offset $US10 million of Warners marketing costs as part of the strategic partnership. This will include working with Sir Peter Jackson on the development of appropriately themed material that will promote New Zealand as a tourism destination," Key said.

"It is envisaged that this material will be included on all DVDs and digital products likely to reach tens of millions of international consumers. In addition to this, the government will be working with Time Warner as a strategic partner to promote New Zealand across their stable of media outlets."

Better money elsewhere?

Key said Warner Brothers argued for more than the $20 million tax rebate - $US7.5 million per picture - which is on top of the standard 15% that big movies get.

"They could have held out for a lot more, I made it clear we had reached our limit," he said.

"We've done the business... there are bigger bucks overseas but they wanted to make the movies here."

Barnett told TVNZ at 8 that was true.

"He's right because Ireland has 28%, someone else offered 30% and we couldn't just match that. In fact in the US some of the states are offering well over 40%," Barnett said.

"On top of that you've got to admit that Peter Jackson is an enormous pull for this picture - Warners want Peter to be happy, they want the project to take place here, they want to use the facilities that Peter's built at Weta Workshop.

"In the end it's actually cheaper to make it here than other places, not because of the labour but because there is stability and because the infrastructure exists and because we're good at that we do," Barnett said.

Key said he hadn't spoken to Sir Peter since the deal was made "but I'm sure he's going to be a very happy camper tonight".

What do you think of this arrangement? Has the government cut a good deal? Have your say on the messageboard below.


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  • argonell said on 2011-01-26 @ 18:38 NZDT: Report abusive post

    Congratulations Mister Prime Minister! Notice the timing of the boycott - AFTER proven success, after all the risk, after the blood, sweat and tears. What leeches the union produces! All the risk takers such as Weta, New Line and now MGM commit to the funds needed, but these guys can up and break contract or strike and leave everyone hanging. It is absolutely despicable! Here's a thought for these few bottle babies...leave, and let the thousands of mature New Zealand adults keep working!

  • Nelson said on 2010-10-29 @ 13:30 NZDT: Report abusive post

    If a large multi-national company set-up in NZ (unlikely i know) and offered the employees NO security, i.e "your late so dont turn up tomorrow, you're out". Or I" dont like your attitude please leave". Would the government change the law to allow this ? Oops I asked a question there.... the Government had already done it. Why does '3rd world' and 'going backwards' come to mind....

  • lisellemono1 said on 2010-10-29 @ 08:55 NZDT: Report abusive post

    The reality is that most Film people work for free anyway. They would love to work in the Hobbit and nobody who wants to even cares about the money or the pay. It's for the love of film, a thing many careers are lacking. How many artists get paid well? It's life and its love. Thats the way we like it really. People's lives looked set to be destroyed from jobs, income down to relationships, family. Now its better. Lets face it, those moaning arent affected by it anyway. Thanks John Key!

  • i8thelastcookie said on 2010-10-29 @ 08:01 NZDT: Report abusive post

    How pathetic NZ has become. Keep blaming the unions for this stupid movie.Why don't you just put an add in the US that says "come to NZ and make your movies for free, actually..we'll pay you to come and do it here too.."no wonder 40 thousand NZ'ers go to australia to live every year..unions only try to give fair workers rights..not take them away..but when you get public harrassment in restaurants of these poor people trying to earn a fair dollar..just shows how low this country really is.

  • Hobbiton Farmer said on 2010-10-29 @ 07:43 NZDT: Report abusive post

    If The Hobbit had been taken away from NZ then no other international film company would have risked their time and money to film in NZ. What a terrible waste and cost! Who would have suffered? The people who work in the NZ film industry, and all the supporting jobs.