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The Hobbit’s future in New Zealand still hangs in the balance, as crisis talks between prime minister John Key and Warner Brothers executives fail to determine where filming will take place.

Last month, acting unions threatened to boycott The Hobbit in a protest over wages and working conditions. Key said that this was the key factor in giving Warner second thoughts about filming in New Zealand.

"They [the executives] have a lot of goodwill towards New Zealand, but there's no question that the industrial action caused concern on their side.

"If it wasn't for the industrial action, they [Warner Bros] were good to go," Key was quoted by the New Zealand Herald as saying. 

The crisis talks follow the protests by thousands of New Zealanders who fear that The Hobbit will be lost to another country. Economists said the move could cost New Zealand up to $1.5 billion.

Despite this, Key has ruled out increasing the country's subsidy program to sway studio executives.

"In the conversations I've had with Warner Bros. so far I've made it quite clear if it comes to a bidding war, then New Zealand's out, because I don't think that's the right way to run this," Key told reporters.

"We don't want to be re-negotiating with every single production company that comes to New Zealand."

Another possible bargaining point would be a change in labour laws to protect The Hobbit from industrial action. "We wouldn't want to say we could definitely do that, but we also wouldn't want to rule it out," said Key.

Key revealed that Warner Brothers don’t have much faith in assurances made by the Council of Trade Unions (CTU), which has guaranteed there will be no further industrial action taken.

The rising value of the New Zealand dollar has been cited as another factor in moving The Hobbit to a European location. The currency is currently trading about $0.75, around a third higher than when New Zealand was first investigated as a potential site for film.

According to Key, the chances of The Hobbit remaining in New Zealand are no higher than 50 per cent.

A decision is expected in the next 24 to 36 hours when the prime minister meets with Warner Brothers again.

Related:
New Zealand Hobbit talks fail to seal deal 
Hobbit march as New Zealand filming in peril

- Frankie Mullin


Digital Mag

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