The flood of news about The Hobbit has shrunk to a trickle in the wake of the actors’ boycott, the Warner Bros. threat to take The Hobbit out of New Zealand, the greenlight, the casting of Bilbo, and the MGM’s creditors’ decision to accept the Spyglass deal. I counted up and realized that over the past five weeks or so, I have posted 110 times just about the Hobbit crisis!

Looking back over recent events, I realized that two things could be useful at this point. First, a summary that tried to organize those many pieces of news into a clear shape. Second, some thoughts on how this crisis reflects the growing competition among countries for big-budget productions from Hollywood and elsewhere. I’ve written an epic entry that just went up on Observations on Film Art, the website I share with my husband, since I think this drama is is of more general interest than most of the topics I write on here.

There are still a few editorials on the government’s deal with Warner Bros. being posted on New Zealand news sites. I’m not going to try to link to them all, since so far they haven’t provided anything fresh; they’re opinion pieces for or against. If I find new stories that do reveal more information, obviously I’ll post about them.

The website Twitch has posted reactions from two New Zealand film directors about the deal reached by the government and Warner Bros. to keep The Hobbit production in the country. Of the two, Jonathan King’s is the more substantial. (He directed his first feature, Black Sheep, which had creature designs by Weta Digital and other services from Peter Jackson’s companies. Those companies charge considerably less for services provided to local films than for those from overseas.) He provides a thoughtful and balanced response, expressing relief that Jackson’s companies and their employees won’t suffer and opining that the loss of The Hobbit would have led to a dearth of foreign productions coming into the country. He continues:

Like I suspect many Canadian film makers probably feel, I don’t actually think those international productions are necessarily an unqualified good for our industry. It makes crew unaffordable, it makes facilities, at times, hard to get into. It grossly distorts what is ‘our’ industry with what is in fact a service branch of somebody else’s. This is really just postponing the inevitable day when Hollywood films do stop coming here; there isn’t the work to sustain a fraction of these people. While it’s great for employing large numbers of people when monster films like The Hobbit are made here, they are part of the Hollywood machine that’s bulldozing all independent and small-industry films beneath them, and it comes at a time when the NZ industry is finding it harder than ever to keep its own head above water.

King considers the deal made by the government an “acceptable compromise”:

(the government didn’t offer anything like the double tax rebates the studio would have loved to have had). What this does is clarify, for the film industry specifically, the difference between an employee and a contractor — something, I think, most local producers would be happy to have happen anyway. It basically means you can’t work for several months or more as a contractor — getting the associated tax etc benefits — and then claim at the end you were actually an employee, and would like holiday and sick pay now. Other industries like real estate and, er, sharemilking (!) already have this clarification. A creepy right wing government sneaking in a bit of legislation that suits them in a moment of populist hysteria? Very possibly!

Finally, King blames the Australian union, the MEAA, for trying to dictate terms to the New Zealand film industry:

But this was all precipitated by an equal or greater attack on our sovereignty: an aggressive action by an Australian-based union taken in the name of a number of our local actors, backed by the international acting unions (but not supported by a majority of NZ film workers), targeting The Hobbit, but with a view to establishing a ‘standard’ contract across our whole industry. While the actors’ ambitions may be reasonable (though I’m not convinced they are in our tiny market and in these times of an embattled film business), the tactic of trying to leverage an attack on this huge production at its most precarious point to gain advantage over an entire industry was grotesquely cynical and heavy-handed, and, as I say, driven out of Australia. Imagine SAG dictating to Canadian producers how they may or may not make Canadian films!

[Thanks to Stew Fyfe for the link!]

There have been quite a few negative responses to the New Zealand government’s concessions to Warner Bros. in order to keep The Hobbit production in the country. I’ve linked some of them in my entries. But here’s a common-sense editorial on the New Zealand Herald‘s website that points out the obvious: this move will benefit New Zealand. The author, Fran O’Sullivan, points out the brain-drain of talent that went on before The Lord of the Rings (across the boards, not just in the film industry). She concludes:

New Zealand could also have co-hosted the 2003 Rugby World Cup with Australia. But the previous Government stuffed that opportunity.

We can get all prissy about the fact that the Hollywood studios found Key’s inflexion point. Get over it. No one will remember any prime ministerial egg-on-face when the Hobbit omelette is finally cooked.

It’s quite possible that many New Zealanders have already forgotten how much LOTR did for the international image of their country and the various benefits that followed on. Would many of them really want to go back to before it was made?

[Added October 30:]

Somehow I missed another editorial posted on 3news on the 28th. It lays the blame for the extra financial incentives give to Warner Bros. by the government squarely on the heads of the unions. As the author rightly points out, Warner Bros. was set to make the two Hobbit films in New Zealand without the added NZ$34 million–until the unions announced their boycott.

Variety reports that MGM’s creditors have voted to let Spyglass take over the running of MGM after the financially trouble studio goes through a preplanned bankruptcy procedure:

The New Zealand Herald reports that the tax breaks that induced Warner Bros. to keep The Hobbit in New Zealand don’t raise the rate, but they do extend the types of expenses eligible for the rebate:

Film studios are more likely to make big-budget movies in New Zealand because they will benefit from broader tax rebate rules, the Government says.

The Government revealed this week that the new rules would mean up to $20 million in extra money for Warner Bros via tax rebates, on top of the estimated $50 million to $60 million under the old rules.

While the details of the Large Budget Screen Production Grant remain under wraps, Economic Development Minister Gerry Brownlee said it would effectively increase the incentives for large productions to come to New Zealand.

The grant is a 15 per cent tax rebate available on eligible domestic spending. At the moment a production could claim the rebate on screen development and pre-production spending, or post-production and visual effects spending, but not both.

If the Government allowed both aspects to be eligible, it would be a large carrot to dangle in front of movie studios.

Mr Brownlee was giving little away yesterday but said the broader rules would apply only to productions worth more than US$150 million ($200 million).

It would bridge the gap “in a small way” between what New Zealand offered and what other countries could offer.

“It helps assist with the issue of competitiveness. But what it comes down to in the end, we rely heavily on the talent pool that we’ve got here, because they do produce a good product, and we feel fairly strongly that this is the right sort of move to make to continue to support that industry.”

If I read that rightly, it’s good news for Weta, Ltd. and other facilities that Peter Jackson’s team has built in “Wellywood.” Weta has two halves, the Workshop, dealing with the design and building of objects like armor and prosthetics (mostly pre-production) and Digital, the half dealing with digital effects. Park Road Post is also a post-production facility that should benefit.

I assume the two Avatar sequels, which may again work extensively with Weta, would be eligible.

The Large Budget Screen Production Grant scheme was enacted during the summer of 2003. It originally offered a 12.5% tax rebate on certain types of spending and later raised that to 15%. The LBSPG system was put in place to a large part because of the success of LOTR. The first big-budget film it helped lure to shoot in New Zealand was The Chronicles of Narnia: The Lion, the Witch and the Wardrobe. (See Chapter 10 of The Frodo Franchise.)

[Added later the same day:]

Yesterday I posted about the talks about shooting Avatar‘s two sequels in New Zealand. In the current post (above), I suggested that the new scheme should be applicable to those sequels. Now 3news confirms that the “Hobbit law” changes could prove a draw for James Cameron’s upcoming projects:

And with The Hobbit now in the bag the movie industry is abuzz with more good news – two sequels to James Cameron’s Avatar have been given the green light.

“Avatar was made mostly in Wellington, from the live action to the visual effects and Jim has indicated he’d like to do the same for Avatar 2 and Avatar 3,” says Joe Letteri of Weta Digital.

Avatar brought more than $300 million into the local economy while the film’s backers got a $45 million tax rebate.

So if both are made here, the spending is likely to be as great as that for the two Hobbit movies – $600 million plus.

So Weta Digital is looking at a full order book for the next five years.

“The Hobbit films, the other films of course, we’re still working on Tin Tin: The Secret of the Unicorn and there are a number of other films as well, we’ll probably stay in that level, 750 – 1000 crew,” Mr Letteri says.

Mr Letteri says the timing of the Avatar announcement has nothing to do with The Hobbit laws, but agrees they will make New Zealand more attractive.

Stuff.co.nz is reporting an unconfirmed story:

The extra $20 million subsidy for The Hobbit will be paid as a tax break on a pool of profits to be shared by actors and other workers on the films, including director Sir Peter Jackson, it is understood.

The Government has kept under wraps details of the extra cash incentive to Warner Bros, which comes on top of the 15 per cent subsidy worth about $65m on the budget for the two movies of about $670m. […]

But it is believed the extra $20m will be a tax break on up to 75 per cent of a profit-sharing pool set up to reward those involved in the film if it is a success, seen as a near certainty in light of the popularity of The Lord of the Rings.

Mr Key said the total taxpayer subsidy for the two movies, of about $100m, was far less than the $300m claimed for The Lord of the Rings trilogy, making The Hobbit deal better value.

“The tax deal involved in The Lord of the Rings was far more generous than even the changed and improved subsidies in the case of The Hobbit. I’m not going to go into all the details but it is by margin of an enormous amount.”

If true, that might help to reconcile the actors’ unions to the government/Warner Bros. deal to some extent.

Stuff.co.nz reports that the Hobbiton set being built on the same farm outside Matamata that was used for LOTR will be left standing after the filming is over:

Brett Hodge, owner of Matamata Post and Rails, which has supplied the timber for The Hobbit duology since construction began in February, told the Waikato Times that Sir Peter Jackson’s company Three Foot Six was building the home of the Hobbits to last.

“What they did last time was build a temporary set, but now it’s a permanent set,” said Mr Hodge, whose business also supplied the timber for the temporary The Lord of the Rings trilogy Hobbiton set.

The hobbit houses will also have meet to building codes for permanent structures.

“Once the filming is over the set will stay as a permanent tourist attraction.”

A permanent set is guaranteed to attract back many diehard The Lord of The Rings fans who have visited Hobbiton from overseas as well as win over new visitors.

It will begin a perpetual celebration around the party tree, on the set, where The Fellowship of the Ring began with Bilbo’s disappearance.

The Green Dragon, where the dwarf Thorin Oakenshield awaits Bilbo Baggins ahead of their quest, will include a real thatched roof and the nearby Bywater bridge, made from polystyrene blocks resembling stone for The Lord of the Rings, is being rebuilt in permanent stone. […]

Vic James, a school principal who has run Lord of the Rings tours since 2001, said the Government had come up with a fantastic deal that would benefit all New Zealanders.

Interest in his tours, which visit locations used in The Lord of the Rings across both North and South Islands, had dropped to about half a dozen people per month since fans were waiting for some certainty around the Hobbit films.

Many fans, who had done the tour three or four times, had put off coming back because they wanted to attend The Hobbit premiere which was slated for 2011 but been put back as directorial, money and then industrial woes stalled the film.

“It will be December 2012 and we are expecting well in excess of 100 people on that tour,” Mr James said.

Fans will recognize Vic James as the owner of Red Carpet Tours, the company offering the longest tour of LOTR filming locations available. They also might notice a little mistake here. The company building the current Hobbiton set is 3 Foot 7, the successor to 3 Foot 6. (Every significant film production has its own production company.)

Not surprisingly, the resolution of the various problems besetting The Hobbit have saddened Guillermo del Toro, but he does not think he was wrong to give up the directorial job in May:

He tells Britain’s Film 2010, “It’s the hardest decision I’ve ever taken. I have incredible heartache. I feel terrible about it. It’s very hard. It’s getting a little easier to talk about it, but essentially it’s like you’ve been recently widowed and everybody (is) asking you how exactly your wife died. It’s pretty morbid.

“There was no other choice, I kept postponing, I kept fending off the problems, I kept compartmentalising, I kept with it, everything we could (do).”

The film is back on track and due to begin shooting in February (11) and Del Toro admits he’ll be first in line to see it.

He adds, “I’ll be able to watch it and (I will) probably enjoy it. But you know, with The Hobbit, I feel like the guy (survival mountain climber Aron Ralston) in the real-life experience that Danny Boyle just did his movie (127 Hours about). I was hanging by a thread on my arm for so long that at the end of the day you have to cut it off. Do I like having one arm less? No. But did I have to? Yes.”

(From Contactmusic.com)

I doubt that Guillermo will really have to stand in line to see the film! He’s still co-screenwriter, of course, and involved in the film. He’s had a big impact on the pre-production, too, and maybe will be called back for consultations during the shooting and pre-production. I hope he will feel a part of the film’s making.

[Thanks to Paulo Pereira for the link!]

The New Zealand Herald has a story about James Cameron coming to Wellington to discuss making the second and third Avatar films there. Weta, Ltd. was deeply involved in Avatar, helping develop new technology and providing many of the digital effects. The story quotes Joe Letteri extensively:

Twentieth Century Fox announced this week that Cameron would begin writing scripts for two sequels early next year, with production to begin late next year for a December 2014 release.

Weta Digital co-director and senior visual effects supervisor Joe Letteri said Cameron had been in touch to discuss shooting the films in Wellington.

“I know Jim would like to do that, so once we know what the story is he’d like to come down here and explore that.”

The Wellington film industry was integral to bringing the imaginary world of Pandora to life in the original film, with Weta Digital handling the 3D visual effects and Stone Street Studios shooting the live action sequences.

“Weta Digital is hoping that again we’ll be working with Jim and Fox to actually create Pandora and to create the characters and to do all the visual effects work on the films.

“And we’re actually hoping that Jim will come back to Wellington to shoot the live action portion of the films, as he did the first one.”

Letteri said it would be some time before anything was finalised.

“It’s still early days right now. I would think we’re at least a year away from knowing something more concrete,” he said.

“We do have a good relationship, and he took us on as creative partners on the film, and we hope to just continue working with him in that way.

Ironically in the wake of the recent arguments that the New Zealand film industry would collapse without The Hobbit, Letteri reveals that Weta Digital is facing several big productions in a row:

“There has been a lot of interest and more projects coming to Weta Digital, and in fact we have been doing more work since Avatar,” he said.

“Overlapping Avatar we began work on Tintin with Steven Spielberg and Peter Jackson, so that’s in full production here as well.

“And of course we’re gearing up for The Hobbit, so we actually have quite a busy slate right now.”

The timing would fit in nicely, with The Hobbit wrapping up before Avatar shooting began.

“It’s great news on both fronts – the news about Hobbit this week and the news about Avatar. I think that means we’ve got hopefully a good future for filmmaking in Wellington.”

Variety fills in details about the films themselves:

As first reported by Variety.com, “Avatar 2” and “Avatar 3” will be Cameron’s next films. He’s hoping to begin production in late 2011, and could shoot the films back-to-back. He’s expected to begin writing early next year. […]

For Fox, it provides two cornerstone tentpoles that are expected to hit theaters in December 2014 and December 2015, respectively. […]

One unique provision of the deal is that Fox will help co-fund with Cameron a nonprofit org, the Avatar Foundation, which will support indigenous rights and the environment, including the fight against global warming. Certain proceeds from future “Avatar” pics will go to the foundation.

“Avatar 2” and “Avatar 3” will be produced by Cameron and his partner Jon Landau for Cameron’s Lightstorm Entertainment. Lightstorm partner Rae Sanchini negotiated the deal on behalf of the company.

Shooting two big-budget films back-to-back is still not common in the film industry; it looks like New Zealand is becoming the go-to place to make franchise films that way.

(An editorial on TVNZ asking how Weta will possibly manage all the work of two Hobbit films and two Avatar ones misses the point that the films are to be released at the end of 2012, 2013, 2014, and 2015 respectively. Cameron hasn’t even started writing the scripts for his films, while the Hobbit scripts have been delivered and greenlit. There shouldn’t be a logjam of work, given that schedule. The more apropos question might be what will happen with the second Tintin film.)

The law designed to change labor practice so as to keep the Hobbit production in New Zealand has passed, 66 to 50. TVNZ has an account here. Stuff.co.nz reported:

The Employment Relations (Film Production Work) Amendment Bill was moved under urgency yesterday afternoon and has passed its third and final reading this afternoon.

National, ACT, the Maori Party and UnitedFuture supported the bill. Labour and the Green Party voted against it.

It is designed to stop film contractors switching over to an employee, claiming extra rights.

However, Labour MP Charles Chauvel said the bill would create more litigation, not less.

The New Zealand Herald has a column on the fallout from the actors’ dispute:

Alongside the taxpayer handout and changing laws to appease Warner Bros there has been talk from actors opposing Actors’ Equity about the formation of a new union.

The union would compete with the Media Entertainment and Arts Alliance (MEAA), which backs Actors’ Equity.

MEAA insists it will carry on in the industry.

Presumably a new union of people who did not like Equity would adopt a less antagonistic relationship to Jackson’s business interests and the producers body the Screen Production and Development Association.

What is not clear is how such a union would be treated by actors’ unions worldwide, with the potential for similar boycott threats.