Q. So how exactly did NZ taxpayers end up handing over tens of millions of dollars to Warner Brothers?
A. After the actor’s dispute had been settled, but not publicly announced, Sir Peter Jackson put out a press release claiming that Warner Brothers were going to move the production overseas. A day later, Warner Brothers themselves said yes, they were sending their people over to make arrangements to send the production overseas. Why they would come all the way to New Zealand to do this was not explained.
The Government duly announced that they would meet with these representatives and try to negotiate some arrangement so the films would stay in NZ. Our sunny and optimistic PM gave only a 50/50 chance of the films staying here. This despite a long list of solid reasons why the films weren’t going anywhere:
• The actor’s union dispute was settled, the blacklist was called off, and once actors sign up to a contract, they have to honour it, i.e. no strikes during filming.
• Warners had already spent $100 million renovating the Hobbiton sets in Matamata. They couldn’t uproot the hills and take them overseas.
• Peter Jackson wanted to film in New Zealand and keeping their star director happy would be a big priority, especially since the previous director walked.
• Moving locations would mean a delay while new sets were built and new logistics arrangements were made, and this in a project already beset by delays.
• NZ’s labour laws are actually attractive to Warners, because our workers aren’t locked into strictly defined roles they can’t step outside of as is the case overseas. That means Warners can hire fewer people and get more out of them.
• If they shifted to higher-wage economies like the UK or Ireland, they would have to pay more to the local crew and actors.
• The LOTR was filmed in NZ and getting that same look for Hobbiton again to make the movies consistent would be desirable.
• NZ was clearly Warner Brothers’ preferred location to make the films
Warners had the scent of blood, and they knew there was a deal to be done. The NZ public had been stirred into a frenzy – people marching in the streets and directing vitriol at union leaders and any actors who dared speak out. NZ had let them know that we would do anything to ‘save’ the production.
Not ones to waste a good opportunity, they demanded ‘a lot’ in John Key’s words. They gambled on the fact that Key wouldn’t call their bluff – and he didn’t.
As Helen Kelly pointed out on Radio New Zealand, John Key consistently undermined New Zealand’s negotiating position prior to and during the talks with his anti-union rhetoric.
The Government’s first mistake was taking sides in the dispute. From the very first they made no bones about their anti-union, pro-studio stance. An opportunity to bash unions and have the public thank you for it is too great a temptation for almost any right-wing leader to ignore. Key got stuck in and had a great time.
But this is the very behaviour that came back to bite NZ later around the bargaining table.
Because when it was time to strike a deal with Warners, Key was already painted into the ‘evil unions’ corner. Not exactly an uncomfortable position for him, admittedly. But negotiations-wise it presented a problem. If Key’s sole aim was to retain the production for NZ, then he should have been doing his damndest to reassure Warners that the union action was over and there would be no more problems.
But he couldn’t do that when he’d been the one stirring up anti-union fervour from the beginning.
Instead, he kept up the attacks on the unions, emphasizing that in his view there was a problem and implying that Warners would be justified if they walked out on NZ.
In other words, he was asking to get done over.
Key had thrown away NZ’s negotiating position early on, but it wasn’t all bad news for him. He could be assured of ‘saving’ The Hobbit if he gave Warners what they really wanted, which was more money. He could come up with a way to save face by ‘clarifying’ a law to make it look like employment issues of some sort were still a factor, and by getting an ad put on some DVDs. And he could continue to gain long-term political mileage going into election year by bashing the unions and pretending it was all their fault.
While this issue has caused a lot of upset to a lot of Kiwis, for John Key it has been like all his Christmases come at once.
The deal looks expensive if it’s just to retain two movies. But to retain two movies and buy an election result, it’s a great deal.