The Hobbit – It WAS All About The Dollars

See, what did we say? – The Hobbit fracas was all about the dollars.

You don’t bring 10 studio executives over from the US, and host them at considerable expense, to talk about NZ employment law and practices.

The bust up with the Unions was just being used for additional leverage, so shame on those who blasted the unions for wanting a fair deal for NZ film contractors.

At a film studio’s bidding, employment law may about to be changed in New Zealand to the detriment of all contractors, now there’s something worth striking about.

This in today’s Stuff:

Subsidies Focus of Hobbit Talks

Crisis talks to keep the Hobbit films in New Zealand have come down to how much the Government is prepared to subsidise the producers.

Prime Minister John Key said overnight talks with executives from United States studio Warner Bros had gone a long way towards resolving concerns about industrial laws in New Zealand.

The Government is almost certain to change the law regarding the definition of a contractor – Warner Bros’ main concern.

But he said there was still a huge gulf between Warner Bros’ demands for a bigger taxpayer subsidy and what the Government was willing to pay.

“I think it’s fair to say on the financial side there’s a fair bit of hardball being played on both sides.

“We have the capacity to move a little bit, but we don’t have the capacity to write out cheques that we can’t afford to cash.” read the rest on Stuff

But “Playing hardball” doesn’t involve giving away one’s game plan before the negotiations start.

Yesterday we postulated that filming of The Hobbit may be returned to where it arguably belonged and where tax breaks for production companies also happen to exceed those offered in New Zealand. Read:  Hobbit Could be Made in England.

Despite the assurances by the government that they weren’t going to get into a bidding war with other countries the simple fact remains that Britain offers a larger subsidy than New Zealand.

It looks like the only way to keep the film will be for NZ to exceed the more generous allowances offered by the UK (factoring-in the stronger Kiwi dollar in relation to Sterling) and other countries, despite all the posturing about not entering into a bidding war.

At the end of the week if the deal is done, New Zealand will almost certainly have “moved more than a little bit.”

If that happens it will be interesting to see how that is spun to the public and how it impacts on future US backed films in New Zealand.

Further considerations:

Other factors that may have influenced New Line/Warner

The Canterbury earthquake and the long term effects that it is having on NZ’s infrastructure and businesses.

General safety concerns following the serious fire at Rongotai Road’s  Portsmouth Miniatures Studio – where the miniatures for The Hobbit were due to be filmed and where  items of “commercial sensitivity” had been stored.

The Rugby World Cup pushing up accommodation prices and impacting on already limited facilities in the country.

The strong NZ dollar relative to the greenback.