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Edition: U.S. Article Comments (0) Email Print Reprints Read UPDATE 8-Rousseff leads Brazil election, but runoff likely 03 Oct 2010 Racial predatory loans fueled U.S. housing crisis: study 12:22am EDT Gunmen attack NATO fuel tankers in Pakistan 03 Oct 2010 Microsoft hopes to bury iPhone, Android 02 Oct 2010 Witness: Hungover in the hottest place on earth 01 Oct 2010 Shared Blame Nobel for crisis, says author of "Black Swan" 28 Sep 2010 Exclusive: FX moves too fast, too speculative: Japan 02 Oct 2010 U.S. apologizes for syphilis experiment in Guatemala 01 Oct 2010 Ex-maid says Whitman knew she was in U.S. illegally 30 Sep 2010 Real Creator of $150 Million da Vinci Discovered PR Newswire 16 Sep 2010 Watched Pictures of the month Thu, Sep 30 2010 Red faces over top model gaff Tue, Sep 28 2010 Prints reveal NY’s wild 70’s period Thu, Sep 30 2010 New Zealand offers to mediate "Hobbit" union spat Tweet This Share on LinkedIn Share on Facebook Related News Black actors face snub at Oscars Fri, Oct 1 2010 Special report: Is there power in Europe's unions? Mon, Sep 27 2010 Unions urge "Hobbit" boycott, angering Jackson Sun, Sep 26 2010 Related Topics Fashion » Entertainment » Zagat Power Lunches » Film » By Jonathan Handel Mon Oct 4, 2010 2:26am EDT LOS ANGELES (Hollywood Reporter) - Where exactly is Middle Earth? Firmly planted in New Zealand, if the country's prime minister has anything to say about it. In the latest development in the fight over unionization of actors on "The Hobbit," Prime Minster John Key has offered to have government officials mediate the dispute between director-producer Peter Jackson and the union seeking to organize the production. Government mediation of a unionization dispute is unusual in New Zealand, but in this case, the stakes for the country are high. "I would be very, very concerned if (the production) moved offshore," Key said. Underscoring the risk to the local film industry, he added, "If you can't make 'The Hobbit' here, frankly, what movies are you going to make here?" It remains unclear where the movie will be shot. Jackson said late last week that Warner Bros., which is financing the two-part film "to the tune of hundreds of millions of dollars," is considering moving the project from New Zealand to Eastern Europe. Jackson's statement echoes an earlier one from Warner subsidiary New Line, which said that the studio was "exploring all alternative options in order to protect (its) business interests." That's tough talk, but given the high stakes, it's hard to imagine that the producers and the union won't find some middle ground to keep the "Lord of the Rings" prequel shooting in the land of the kiwi. Indeed, some media reports indicate a solution could be reached shortly. In an effort to further that result, the president of New Zealand's Council of Trade Unions, Helen Kelly, met with Jackson several days ago. Although no one's talking, one possibility might be a set of recommended, rather than mandatory, contract terms. The union on the front lines, New Zealand Actors' Equity, said it had "no desire to jeopardize the production or create instability in any way." That union is the local unit of Australia's Media, Entertainment and Arts Alliance (MEAA). Adding to the film's troubles was a massive fire Friday that destroyed a miniatures facility Jackson planned to use for the production. The cause remains under investigation. TUMULTUOUS PROJECT Trouble is nothing new to "Hobbit." In 2006, Jackson was bounced from the project by New Line in the wake of a lawsuit he filed charging that studio self-dealing had reduced his backend payment from the hugely successful "Lord of the Rings" trilogy. Jackson's ejection resulted in a storm of negative Internet reaction. The suit was settled in 2007, and Jackson was restored as producer, but then "Hobbit" became mired in the financial troubles of MGM, the project's co-financier. This year, original director Guillermo del Toro left the production, citing the extended delays. Recent reports in the U.S. have Warner and MGM close to reaching a deal on their co-financing arrangement for the movie after months of negotiation, but MGM still must meet its next debt payment for the film to go forward. Nonetheless, the movement might have created additional urgency to resolve the unionization question. The stakes extend beyond "Hobbit." Gisella Carr, CEO of locations marketing agency Film New Zealand, said losing the project might result in the country losing "(its) ability to attract international film productions into the future." Recent studio films made in New Zealand include "Avatar" and "X-Men Origins: Wolverine." Television productions include Starz's drama "Spartacus: Blood and Sand." 1 2 Next Fashion Entertainment Zagat Power Lunches Film Add a Comment *We welcome comments that advance the story directly or with relevant tangential information. 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