By the early 2000s, New Zealand had firmly claimed its spot on Hollywood’s map, thanks to Peter Jackson’s The Lord of the Rings trilogy. The films didn’t just win Oscars—they turned the country’s jaw-dropping landscapes, cutting-edge production facilities, and cost-effective workforce into irresistible selling points for international filmmakers.
Fast-forward to 2010, and New Zealand was gearing up for Jackson’s next epic: The Hobbit. But behind the scenes, a storm was brewing. The New Zealand Actors’ Equity (NZAE), a union representing local actors, demanded that Warner Bros. negotiate a collective bargaining agreement for fair pay and better working conditions.
Warner Bros., however, wasn’t having it. The studio argued that collective bargaining for contractors would create legal chaos and financial risks. To drive the point home, they threatened to pack up The Hobbit and move production to Ireland or Eastern Europe. The stakes? Thousands of jobs and millions in economic benefits for New Zealand.
The threat to relocate sent shockwaves through the film industry. Panicked workers hit the streets, rallying to keep the production in their homeland. Peter Jackson himself chimed in, accusing the union of playing politics and jeopardizing New Zealand’s hard-won reputation as a filmmaking haven.
Under immense pressure, the New Zealand government stepped in, eager to keep Middle-earth from slipping away. They cut a deal with Warner Bros., offering major concessions:
- A $25 million NZD increase in tax rebates for the studio.
- The swift passage of the Employment Relations (Film Production Work) Amendment Bill—nicknamed The Hobbit Law.
This controversial law, rushed through Parliament in just two days, fundamentally changed the game:
- Film workers were classified as independent contractors by default unless explicitly stated otherwise in their contracts.
- Independent contractors lost the right to unionize and collectively bargain, effectively tilting the scales in favor of studios.
While the law secured The Hobbit for New Zealand, it came at a steep price. Critics slammed it as a corporate giveaway that left workers—especially in the VFX industry—more vulnerable than ever. With no job security or collective bargaining power, many artists were left adrift in an industry already notorious for instability.
The fallout lingered for years, but in 2021, the tide began to turn. The New Zealand government introduced new legislation to soften The Hobbit Law. The updates allowed collective bargaining under specific conditions, aiming to strike a balance between the industry’s flexibility and workers’ rights.
In the end, The Hobbit trilogy may have brought dragons and treasure to the big screen, but behind the scenes, it exposed the cost of prioritizing blockbusters over people.
