‘Hobbit’ Production to Stay in New Zealand

Prime Minister announces that deal is reached with co-producer/distributor Warner Bros. to keep the Peter Jackson film in Kiwi country

New Zealand prime minister John Key announced Wednesday that production of "The Hobbit" will stay in-country, local broadcast outlet TVNZ reports.

Agreement to keep the Peter Jackson-directed film in Kiwi country follows face-to-face negotiations between high-level local government officials and co-producer/distributor Warner Bros.

Producers for the film threatened to bolt New Zealand, after a local talent union — backed by the Screen Actors Guild and the American Federation of TV and Radio Artists — threatened to boycott the production.

Last week, however, the union backed off its threat.

Part of the agreement: New Zealand officials broadened the qualifying criteria for local production rebates to include bigger projects.

"The impact of this will mean an additional rebate for 'The Hobbit' movies of up to $7.5 million  per picture, subject to the success of the movie," Key said.