Warner preparing to take Hobbit offshore – Sir Peter

Sir Peter Jackson and his partner Fran Walsh shocked the film industry overnight, releasing a statement suggesting New Zealand could soon lose The Hobbit.

"Next week Warners are coming down to New Zealand to make arrangements to move the production offshore. It appears we cannot make films in our own country even when substantial financing is available," the pair said.

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Fight to keep, but up to Warners
"We will continue the fight to keep the film in NZ, but ultimately this decision belongs to Warner Bro’s [sic]," Sir Peter and Ms Walsh said.

Previously, the possibility the Hollywood studio could move the production to Eastern Europe, or elsewhere, had only existed as rhetoric as Weta jostled with actors' unions seeking a collective contract - though some will wonder if the statement, if more concrete that previous threats, is another negotiating ploy.

Sir Peter and Ms Walsh's statement about the Warner visit was timed to coincide with an Actors Equity meeting in Wellington.

But the union meeting was called off when it was learned that around 1500 Weta workers, led by Sir Richard Taylor, were marching from Mirimar to picket it. Organisers said they feared for their members' safety. As things stand, the union still wants to use The Hobbit to set a precedent for collective bargaining (currently, actors on NZ productions are employed as individual contractors). New Zealand labour laws do not allow collective bargaining for individual contractors.

Ms Walsh told Radio New Zealand this morning that tax breaks were not an issue. The studio is focussed on the stability of the labour situation.

Protesting technicians march in Wellington last night.

Beyond union woes, a bidding war
There is speculation that some countries may offer the $670 million production - a prequel to the Lord of the Rings trilogy - double the 15% tax break on offer in New Zealand.

In the face of that bidding war, the actors' demands have not helped, the Mr Jackson and Ms Walsh said: "The damage inflicted on our film industry by [the actors unions] is long since done."

Now, Warner Brothers are "quite rightly, very concerned about the security of their $US500m investment".

Filming is due to start in February, in 3D.

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