October 28, 2010

Hobbit saved

The government has secured  the $670 million Hobbit movies for New Zealand. Prime Minister John Key announced the agreement with Warner Brothers last night after two days of negotiations with studio executives who had been worried about industrial disputes and wanted a bigger tax break than what NZ has previously offered for big movies, according to TVNZ.

Law changes will clear up confusion about the legal status of contractors and employees, but the $20 million tax break was much less than Warner Bros had asked for. A Bill will be put through Parliament today under urgency today to seal the deal. 

Key said that in financial terms there was no doubt Warner Brothers could have got a better deal from other countries, but the studio wanted to make the movies in New Zealand and so did director Sir Peter Jackson.
"They wanted a lot more, they argued for a lot more," he said.  "I made it clear we were at our limit, this is a better deal than we have had with other big movies made here in the past."

And the government has also won an agreement that New Zealand will be promoted through all the marketing DVDs and other material that will be used to publicise the two Hobbit movies, as well as hosting one of the world premieres.  To get that it will offset $US10 million of Warner Brothers marketing costs.

"The strategic marketing opportunities for New Zealand from the movies will be worth tens of millions of dollars," Key said.  "In the financial sense, this is a good deal."

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