WELLINGTON, New Zealand -- Two $500 million Hobbit movies will be made in New Zealand as originally planned, Prime Minister John Key said Wednesday, after two days of crisis talks with Hollywood studio executives.
Senior executives from Warner Bros. and New Line Cinema won an agreement for a change in labor law and bigger tax breaks to keep the project in New Zealand after a dispute over pay and conditions for actors threw the production into turmoil last week.
The studios had warned that unless the threat of labor action was removed, production of the two movies would be moved to another country.
The dispute became a national issue because New Zealand received a huge boost to its tourism after The Lord of the Rings trilogy was made there. Hundreds of people marched in several cities Monday to show their support for keeping production in New Zealand.