- Associated Press - Thursday, October 21, 2010

WELLINGTON, NEW ZEALAND (AP) - New Zealand may lose the filming of “The Hobbit” movies because of an actors’ pay dispute, with financial backers Warner Bros. making arrangements to shift the production elsewhere, director Peter Jackson warned Thursday.

The “Lord of the Rings” film trilogy based on the J.R.R. Tolkien novels relied heavily on the rugged landscape of New Zealand, which in turn received a tourism boost after becoming associated with Tolkien’s Middle Earth fantasy world inhabited by hairy-footed little people and host of other colorful beings.

But the $500 million, two-movie prequel, “The Hobbit,” may end up shooting somewhere else, Jackson’s Wingnut Films said.

The New Zealand union, Actors Equity, insisted the dispute was being resolved and that it had lifted its work bans on the project, while foreign counterparts, including the powerful U.S. Screen Actors Guild that had backed the boycott, said its members were now free to work on the films.

But senior producers in Jackson’s company said it may be too late to save the production in New Zealand.

Fran Walsh, Jackson’s partner and co-producer, said Warner Bros. already had an executive in England scoping locations and assessing the studio used for shooting the Harry Potter series to relocate “The Hobbit” movies.

Why would Warner Bros. “go to a place where they’re almost guaranteed industrial action during the shoot?” Walsh told New Zealand’s National Radio on Thursday. “They are saying they need stability and certainty and that’s no longer here _ they can protect their investment better elsewhere.”

Jackson’s company, Wingnut Films, said in a statement that Warner Bros. representatives were coming to New Zealand next week “to make arrangements to move the production offshore” because “they are now, quite rightly, very concerned about the security of their investment.”

The industrial dispute began in late September when Actors Equity arranged an international boycott of the movies when Jackson refused to hold talks on a union-negotiated collective agreement on wages and conditions for local actors, saying they should get a deal that matched those of their international colleagues.

Jackson and the films’ backers, Warner Bros., MGM and New Line Cinema, said a collective agreement would expose Wingnut to unfair liabilities and sanctions under New Zealand law. They said the actors would be employed as independent contractors, with pay and conditions based on the local industry’s standard working conditions.

The Screen Actors Guild and British actors joined the work blacklist of “The Hobbit,” which is expected to include Sir Ian McKellen reprising the role of the wizard Galdalf from the Rings movies.

New Zealand Council of Trade Unions president Helen Kelly said Thursday the industrial issues were on the way to being resolved and the blacklist was lifted on Sunday.

New Zealand performers want the movie made here as much as anyone,” she said.

In a statement posted Wednesday on its website, the Screen Actors Guild advised members it had lifted its blacklist on “The Hobbit” after advice from the New Zealand union and that members were free to work on the film.

Jackson said in his statement the dispute had already done serious damage by undermining Warner Bros. confidence in the New Zealand industry.

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