As Warner Bros. executives arrive in the country, let's put to bed the concept that the studio would waste its time manufacturing a crisis and look at the economic realities

I saw on TV last week actor Robyn Malcolm explaining that there was never an intention to cause mayhem over the Hobbit. "All we wanted to do was have a talk over wages and conditions," she said.

And all I want for Christmas is world peace and to end hunger.

In a thousand lifetimes the members of the actors' union will not do for others what Jackson has accomplished. His creation of jobs, tax, tourism and career opportunities is unparalleled. And it is not his undoubted directorial skills that has made the real difference, it is his unmatched ability to generate the enormous investment to make seriously competitive movies.

New Zealand movies, before Jackson, must surely have been a huge cost to the taxpayer on average and in net terms. Many should never have been made as they were never going to create an audience and were just self indulgent twaddle.

All of the members of the actors' union executive have, throughout their careers, enormously benefited by a diverse range of subsidies from the taxpayer. None of them can say that over their careers they have created more wealth than they consumed.

I have no problem that they are fiscally naive, but they do not have a right to jeopardize the wealth creation of those who aren't.

Actors' Equity are being disingenuous in the extreme by trying to claim that "all we wanted was to talk". No they didn't, they wanted to force Jackson to agree to conditions that they could then impose on the rest of the film industry. The CTU confirmed that.

When Jackson chose not to break employment law and also destroy the less well-off local film industry (he had, as he said, no mandate to negotiate for them) they immediately called a strike.

Warner Brothers are making an investment of half a billion dollars (real dollars that is not Mickey Mouse Kiwi dollars) and of course want the best deal they can get. For some reason they want to minimise their risk in a highly speculative endeavour and some consider that unreasonable!

If New Zealand actors are going to strike, then why would you stay? It is time that all actors in New Zealand should be fair and agree to not be paid for their work but be on a profit share basis – if the film makes money they win and if it loses money they get nothing. That would educate them on the principles of risk and rewards!

Then we saw real dishonesty from the CTU and left wing commentators by claiming as fact, without a shred of hard evidence, that Warner Bros. either wanted to go somewhere cheaper or were looking for more tax breaks. The money that Warners has already spent here gives the lie to the former and Economic Development Minister Gerry Brownlee was unequivocal that Warners had not asked for any further tax breaks.

As is their legal obligation to their investors, Warner Bros. will always endeavour to get the best deal they can, but it is the height of absurdity to think that a global corporation would feel the need to engineer a crisis so they can leave for somewhere cheaper or where they can get better tax breaks.

It is unbelievably stupid to think that they would feel any need to create a crisis – they operate in one of the most competitive fields in the global economy and are consequently very tough. All they had to do if that was their intention was just get on the phone and say they were pulling out to go somewhere cheaper or they would have asked the government directly for a better deal.

Only those completely divorced from the business world would think that they saw a need to manufacture a fuss. The only possible reason would be if they cared about what the public think! The New Zealand public are some of the most fiscally illiterate people in any first world country, so why would their opinion be of any value whatsoever?

In such a highly competitive world most countries understand the principal of risk and reward and are only to happy to offer Warner Bros. a better deal. Jackson is the only thing New Zealand has going for it that all the other countries don't.

To have lifetime wealth consumers with no corporate business experience trying to understand large scale commercial realities just doesn't work, as has been amply demonstrated here.

If Warners do take the Hobbit then I look forward to the actors' union and the CTU putting something in its place.

Comments (17)

by Tim Watkin on October 25, 2010
Tim Watkin

Good on you for putting a post where your mouth is Mark, but let me be the first to raise objections to your thinking.

You write as if businesses can and should play hardball, but unions never should. If it's right and proper for a film studio to agitate for the best deal possible, why not apply the same standard to the actors? Isn't it a union's "obligation" to negotiate?

Two, you dismiss all NZ film that isn't commercially successful as "self indulgent". Such as Meet the Feebles, perhaps? Our most successful directors, and most of the crew and actors that have gone onto commercial success, learnt their craft on those movies. That taxpayer investment has been just as critical to building our industry as the Jacksons of this country. And that doesn't even address the question of the value of film as art or national story-telling.

Is Jackson the better film-maker than Ward or Waititi simply because he's worth around half a billion dollars?

And why is a union wanting to talk with a studio akin to world peace? Jackson himself is a member of four unions, and worldwide union bargaining has improved actors' terms and conditions.

You're right that there's been no evidence presented that Warners was pushing for better tax breaks in this case. But that argument stemmed from the business reality that that's what studios do and the fact that in his recent review of the film industry in this country, Jackson himself lambsted this government for not increasing the tax breaks as other countries have been doing.

Given Jackson's position on that – and Warner Bros. would have known that, presumably – it was a reasonable question to ask. But now it's been so unequivocably denied, as you say, Warners, Jackson or the government can hardly say anything more about that now.

Finally, you mock the actors for not understanding risk and reward. Seriously, actors? There must be few riskier professions to enter. And what's riskier than issuing a non-work order against a major Hollywood studio? Fact is, it was a strategy that ended in failure, but you can't say they didn't take the risk and put their own financial futures on the line!

by Tim Watkin on October 25, 2010
Tim Watkin

Oh, and Robyn Malcolm. I'm sure she was chosen to front this because she has made a commercial contribution to this industry (and her public popularity). An American version of Outrageous Fortune is being made over there, it's success in no small part down to her acting skill.

Directors don't do the business on their own.

by Robert Winter on October 25, 2010
Robert Winter

It is genuinely fascinating to to see the emergence in NZ of a slavish and increasingly apoplectic  "what's good for Jackson is good for NZ"mentality,  When the heat and hissy-fits have died down, we will see the following to be the case:

  • the relevant unions - without consulting the CTU - advanced a case long-established about wages and conditions internationally in the film industry, They did so because companies in their industry act internationally, so why shouldn't they? No doubt, there might have been some stages in their move to boycott, but, then, they are hardly dealing with milk-and-water liberals.
  • Mr Jackson (who is not some homespun SME, but a global player in the industry), and then others, all of whom should have known better, launch quite deliberately into hyperbole, rather than quietly getting on with sorting out the issue, which would be usual in such cases;
  • the CTU steps in and, by all objective accounts, seems to have helped to achieve an reasonable solution
  • Mr Jackson continues in hyperbolic mode, despite that solution, for reasons that remain unclear, but which I expect reflect a degree of personal pique  and an element of discussion with Warners et al
  • the government and the EMA step in using the issue disgracefully to attack the CTU and current employment law
  • there will be a meeting this week, the filming will stay here, we will probably fund the film a bit more, and we will look like a banana republic knee-jerking to international capital

I do like Mr Wilson's arrogance - the "lifetime consumers" line is particularly good - how dare these upstarts quibble with those that can do a beta analysis. It's much like the CCO debate in Auckland , but in this case, it's "know thy place and bend thy knee to one's betters in Miramar".

And, just in case anyone believes Mr Wilson, there are case studies of firms creating crises deliberately to create instability and promote restructuring or disinvestment.

by Eric Goddard on October 25, 2010
Eric Goddard

New Zealand's relatively recent breakthrough into the shortlist of countries to consider making a movie in is a huge achievement.  An achievement in which Peter Jackson's role cannot be ignored. It is an industry that, as we have seen, has the potential to provide impressive benefit to New Zealand.

However, a race to the bottom trying to make the cheapest movies isn't one New Zealand can or should win. We shouldn't let the corporate giants push us into it. Our movie industry offers only one thing that can't be matched offshore and that's our backdrops. New Zealand scenery is top notch and we shouldn't undersell it.

We need to stop panicking about these negotiations. We're in a strong position and some give and take is perfectly reasonable. They want to make the Hobbit in New Zealand to give consistency with LOTR, they want to make it here because it'll be a damn good looking movie if they do, they want to make it here because their director has an affinity with the place, a familiarity with the locations, film crews etc. They want to film it here because they know we'll bend over backwards in terms of providing free extras, bending regulations, stamping filming permits and generally making the production welcome.

But we shouldn't bend too far, and expecting our actors to take a hit in their pockets from a film company that will break even on opening weekend is too far.

by Ben Curran on October 25, 2010
Ben Curran

The actors might have been in a strong position to negotiate better terms. And they might well be fully justified in seeking them. From the perspective of a pleb not connected with the industr in any way though, the time to do that was 18 months ago when the filmmaker/director association, what ever it is called, offered to re-negotiate the standard industry terms. Or alternatively, ask the government of the day to change employment law so that the independent contractors could bargain as a group, like the Irish actors union apparently has.

When protesting a cause, there is a case for making a martyr of yourself and breaking the law to draw attention to your cause as long as you are prepared to accept the consequences. You try and force the largest player in the local industry to break the law and sulk when it doesn't.

I tend to believe the actors when they say they want to talk about conditions and what not. And there should be a forum for it. As I understand it, there was a forum that the actors union ignored. The way the actors union went about trying to force the industry was cack-handed and asinine at best.

I don't know whether it's damaged the union movement as a whole. It has certainly damaged the reputation of the actors union. And rightly so.

by IrishBill on October 25, 2010
IrishBill

Frankly this diatribe is an absurd randian rant. How about the producers and Jackson take some responsibility for whipping up a hate campaign against the union a whole week after the dispute was settled?

And if Jackson really built the NZ film industry from scratch himself why should a wee actors ban cause him any problems at all? Surely you're not saying his success was a team effort?

Oh and one other thing. When you claim No they didn't, they wanted to force Jackson to agree to conditions that they could then impose on the rest of the film industry.

You're describing pattern bargaining - an industrial relations tactic that is practised across the world by both employers and unions (a classic employer example is the government's current call for teachers to accept 1.5% because other public servants have). To claim it's a sign of some immoral crusade is both naive and ridiculous.

Honestly, you need to educate yourself properly before you make a fool of yourself in public again son.

by Rod on October 25, 2010
Rod

Hey Mark, you're talking about a 'movie' about a 'book' that creates nothing but a couple of hours entertainment for a bunch of fat asses that can't entertain them self's, piss off  and do some real journalism.

by Bruce Thorpe on October 25, 2010
Bruce Thorpe

If New Zealand has ambitions to become a global movie capital, and I believe that is a common promotional claim, do they truly believe the rest of the global industry will peacefully accept competition from a non-unionised industry .

The significant part played by the actors unions from other countries is a fair signal, which I am sure the Warner Bros execs and presumably Sir Peter fully appreciate.

No matter how many tourist promoters and unemployed workers wave their knickers in the air and call "Me! Me!"  this film could be blacklisted for the simple facts of the etertainment industry world wide that if you want to participate in the worldwide industry, you must do business with the international union organisatiuons.

by Mark Wilson on October 25, 2010
Mark Wilson

Astonishingly my missive seems to have not meet with universal approval! I thought that ""Honestly, you need to educate yourself properly before you make a fool of yourself in public again son" was a winner but  "piss off  and do some real journalism" has the advantage of pithiness and brevity. Still, time for someone to make a late run.

May I humbly (well not really but when you are about to mock people it looks good) suggest that you all seem to have made the same mistake that the actors union did and are arguing about the rights and wrongs of the issue, which of course has nothing to do with it. This was a clear cut case of the actors union taking a plastic knife to a gun fight with a platoon of heavily armed Green Berets! Their end result made the battle of Little Big Horn look like a stunning victory for Custer!

Lets see - we had a number of mildly well known NZ actors whose whole careers exist only because of massive subsidies from the tax payer ($48 mill so far for Outrageous Fortune - well named when you think about it) with no discernible experience in the corporate or even business world trying to out muscle a multi billion corporate who have in their employee some of the best educated and experienced corporate players in a fiercely competitive global bear pit. And they were unaware, and seemingly still are, that they were out of their league. Amazingly they keep repeating that it was never their intention for things to have got so out of hand! It has still not occurred to them they were not smart enough for the job at hand.

I have no problem if we decide that we are going to set the terms on filming in NZ, no matter how absurd those terms may be as long as we accept that as we are price takers and not price makers we will end up with 100% of nothing.

And please, no arguments about the rights and wrongs of the issue - completely irrelevant. The issue is are we in a position to tell a corporate with half a billion to spend how they will spend it?  

As to a world wide boycott of the movie you have a touching faith in the integrity of the movie unions overseas.

by Andrew Geddis on October 26, 2010
Andrew Geddis

Mark,

"And please, no arguments about the rights and wrongs of the issue - completely irrelevant" is a pretty good way of avoiding the actual issue at stake ... . Isn't your point a utilitarian one - it is better to have a movie made here under "inferior" conditions* than to not have any movie made here at all? And isn't that a claim about what is "right"?

If you are going to be a contributor to this site, rather than a serial commentator on it, you're going to have to have the courage of your convictions. Otherwise, why bother?

* Accepted that the question of whether Peter Jackson's conditions actually are inferior is somewhat disputed.

by Graeme Edgeler on October 26, 2010
Graeme Edgeler

An American version of Outrageous Fortune is being made over there, it's success in no small part down to her acting skill.

And its failure? Scoundrels was cancelled after the short 8-episode first season.

by Mark Wilson on October 26, 2010
Mark Wilson

Fair call - my mistake.

by stuart munro on October 26, 2010
stuart munro

... it is the height of absurdity to think that a global corporation would feel the need to engineer a crisis ...

...It is unbelievably stupid to think that they would feel any need to create a crisis...

Only those completely divorced from the business world would think that they saw a need to manufacture a fuss...

This is in itself naive thinking. Certainly, in an isolated sense Warners could not give a proverbial triviality about what New Zealanders think. But every action carries its attendant costs, including shifting locations. Public opinion is not directly important to Warners, but when it comes to soliciting tax breaks from a government, they are crucial - if there is broad public support nothing could be easier, but if there were significant and vocal opposition, the tax breaks might be harder to obtain, and politically costly for those who grant them.

Such factors readily affect not just this movie, but future productions as well, so that it is perfectly consistent with Warner's commercial interests to manufacture a crisis of this kind. Which is not to say that they did so, but that the possibility must be considered.

by Bruce Thorpe on October 26, 2010
Bruce Thorpe

If we are going to reconstruct the beginnings of this dispute to find those to blame , it is my understanding that the critical event was when a "contractor" with Weta workshop won his right to be considered an employee in an Employment Court hearing.

by DeepRed on October 27, 2010
DeepRed
And a few years earlier, there was a similar precedent when a group of janitors sued their employer for being forced into independent contractor status - and hence abrogating their sick leave and annual leave among others - and the courts ruled in the janitors' favour. That led to changes as part of the Employment Relations Act 2000.
by Mr Magoo on October 27, 2010
Mr Magoo

You are right Bruce. In fact Key mentioned that after the meeting.

Exchange rate, contractor/employee status and tax breaks.

The hollow men are hollow so they can be filled with crap...

by Frank Macskasy on November 17, 2010
Frank Macskasy

"If Warners do take the Hobbit then I look forward to the actors' union and the CTU putting something in its place."

Take ir where?

Britain, Ireland, Australia, Canada - all have Actors Equity unions that are far stronger and more militant than ours.

America? Wasn't the point of moving it offshore - that costs are cheaper than in the US?

Slovakia, Hungary, et al? Possible. Movies have been made in those countries. But the logistics of language difficulties will make production harder. If you run out of brass tacks, you can't just phone your nearest Hungarian Mitre 10 and ask for a 20kg sack of the product. You'd need an interpreter to make the call for you. Now multiply that by a factor of hundreds for every aspect of production.

It's not insurmountable, but it would add a definite nuisance factor to production.

And of course, unless you move production to Romania, neither Hungary nor Slovakia have mountain ranges like NZ.

Again - not insurmountable. But shifting off-shore would not be as simple as some make out.

Lastly; isn't it rather strange that business and governments are moving to have closer trans-Tasman relationships.

Our four major banks are Aussie-owned.

The two governments are attempting to rationalise standards and relations.

There is talk of common borders and a unified currency.

But if an Aussie and NZ union try to work together - then all hell breaks loose.

Strange...

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