Producers Finally Decide to Keep THE HOBBIT in New Zealand

After two days of back and forth debate, it has been officially announced that producers for the two-part film adaptation have finally decided to conduct principle photography in New Zealand.

New Zealand's prime minister, John Key, announced this morning that his government has reached an agreement with the Producers of the Hobbit film to keep the $500-million production in his country.

"I am delighted we have achieved this result,'' Key said, "Making the two Hobbit movies here will not only safeguard work for thousands of New Zealanders, but it will also follow the success of the Lord of the Rings trilogy in once again promoting New Zealand on the world stage."

All three Lord of the Rings films were shot there so plans were to film the prequel there as well but dilemma ensued when a dispute with union officials threw the production into jeopardy after they instigated a boycott over local performers' rights. Executives from the studios Warner Bros and New Line, flew into New Zealand this week to talk with politicians, who were determined to keep the production in the country.

LA Times is reporting, "The government offered movie bosses a tax break and promised to introduce new legislation to distinguish between employees and independent contractors working in the film production business. The government said it would broaden the criteria for its film fund, entitling the producers to receive an additional rebate of up to $7.5 million for each of the Hobbit movies. The government also said it will offset $10 million in Warner Bros.' marketing costs as part of a 'strategic partnership' with the studio to 'promote New Zealand as both a film production and tourism destination.'"

Key adds, "We will be moving to ensure that New Zealand law in this area is settled to give film producers like Warner Bros the confidence they need to produce their movies in this country. It's good to have the uncertainty over, and to have everyone now full steam ahead on this project."

Hopefully this will be the last of the speed bumps the Hobbit film will face.