7 Unions Want to Boycott Hobbit; Jackson Responds

Seven unions have banded together to urge members not to work on Peter Jackson's THE HOBBIT. Below is the joint letter sent to members; followed by Jackson's response.

The makers of feature film The Hobbit – to be shot in New Zealand next year – have refused to engage performers on union-negotiated agreements.

Members of Canadian Actors Equity, US Actors Equity, the Screen Actors Guild, UK Actors Equity, the American Federation of Television and Radio Artists, the Media, Entertainment & Arts Alliance (Australia) and the Alliance of Canadian Cinema, Television and Radio Artists are advised not to accept work on this non-union production.

If you are contacted to be engaged on The Hobbit please notify your union immediately.For more information about this non-union production see here:

Background

For some years performers in New Zealand have struggled on non-union contracts. These contracts provide no minimum guarantees of wages or working conditions, no residual payments and no cancellation payments in the event the performer’s contract is cancelled.

In 2006, at the request of New Zealand performers, the Australian union, the Media Entertainment & Arts Alliance (Alliance) opened an office in New Zealand.

Since that time the New Zealand branch of the Alliance has sought to negotiate with both individual producers and with the producers’ association but to no avail.

The International Federation of Actors (FIA), of which the vast majority of performer unions around the world are members, resolved that the time had come for performers around the world to support their colleagues in New Zealand and seek a union contract for all performers on The Hobbit.

Who is FIA?

FIA represents performer unions in 100 countries around the world. Unions represented include the Screen Actors Guild (SAG), the American Federation of Television and Radio Artists (AFTRA) American Actors Equity, the Alliance of Canadian Cinema, Television and Radio Artists (ACTRA), Canadian Actors Equity, Equity UK and the Media Entertainment & Arts Alliance.

FIA’s goal is to advance the interests of performers around the world.

What did FIA decide?

At a recent meeting FIA decided that the situation had persisted long enough and that it was time for action to be taken.

Consequently, FIA resolved as follows:

“Resolved, that the International Federation of Actors urges each of its affiliates to adopt instructions to their members that no member of any FIA affiliate will agree to act in the theatrical film The Hobbit until such time as the producer has entered into a collective bargaining agreement with the Media Entertainment and Arts Alliance for production in New Zealand providing for satisfactory terms and conditions for all performers employed on the productions.”

Has someone tried to talk to the producers?

Yes

On 17 August the General Secretary and President of FIA wrote the production company which will produce the film asking that they make contact with the Alliance. A copy of that letter is available here.http://www.alliance.org.au/documents/letter1.pdf

On 20 August the English speaking unions in FIA wrote a joint letter to the producers of the film advising that they were adhering to the FIA position set out in the 17 August letter. A copy of that letter is available here.http://www.alliance.org.au/documents/letter2.pdf

On 31 August the Alliance wrote to the studios behind the film, MGM and New Line. A copy of that letter is available here.http://www.alliance.org.au/documents/letter3.pdf

What have the producers said?

The producers, through their lawyers, have refused to negotiate with the union. The producers claim it would be unlawful (and a breach of New Zealand competition laws) for the producer to enter into an agreement with the union covering the engagement of performers on the production.

Would it be illegal for the producer to enter into an agreement with the union?

No

The Alliance has obtained legal advice that there are a variety of lawful means which could be used to establish the minimum wages, working conditions and residuals for performers on the production. A copy of this advice has been provided to the lawyers for the producer.

What is the current situation?

SAG, Equity UK and the Alliance have made contact with their performer members who are either rumoured to be involved in the film or to whom offers of involvement have been made. These performers have indicated strong support for the FIA position. The producers have indicated that, notwithstanding the request to meet and discuss the terms of engagement of performers on the production, they intend to make imminent offers to performers. In addition, they have now advised that they propose to pay some performers “residuals” on the production.

What would these residuals be?

These residuals are significantly less than the Alliance’s usual agreements in every respect. The producers have offered 2% of distributors gross receipts to commence for exploitations 2 years after the first US theatrical release of the film. However, it is unclear on what they would be based (for example what about sales which occur before the 2 years relating to use after the two year period), how these residuals would be divided between the performers and how they would be enforceable. It is not clear which performers may be offered this arrangement.

How does this compare to residuals under other Alliance agreements?

The Alliance agreement for large budget international studio films (such as Mad Max 4 aka Fury Road and Happy Feet 2) provides for residuals that are equivalent to those under the SAG Agreement. The residuals proposed by the producers of The Hobbit are less in every respect.

Under all Alliance agreements all performers are entitled to share in residual payments and there is no uncertainty about how each performer’s share is calculated or about enforceability.

What about other conditions?

The producers have advised they do not intend to negotiate with the union. Consequently the usual provisions of the New Zealand contract would apply. These include a provision which permit the producer to terminate the contract at any time without obligation to pay out the performer’s contract. This provision could also be used to justify non-payment of any residual obligation which may have been agreed above (even after the performer has performed all their work on the film and even if the performer’s work is used in the film).

This clause alone makes the residual offer above meaningless. Under an Alliance agreement this would not be the case.

Where to from here?

In accordance with the resolution of FIA performers are advised not to work on The Hobbit unless and until the production enters into an agreement with the Alliance protecting the wages and working conditions of performers on the production.

If you are contacted to work on the production please make immediate contact with your local union to establish the current position.

All unions remain hopeful that this situation can be resolved with goodwill on all sides.

Many thanks for your support.

Peter Jackson's response:Statement regarding The Hobbit and claims by the Australian Media Entertainment and Arts Alliance (MEAA):

The Australian Labour Union, the MEAA is using our production The Hobbit in an attempt to widen it's membership, and power within the New Zealand film industry. As a New Zealand filmmaker, who has nothing to hide or be ashamed about, I'm not going to see this threatening behaviour continue without some form of sensible discussion about the "facts" and "truth" behind their various allegations.

It's incredibly easy to wave the flag on behalf of workers and target the rich studios. It's not hard to generate an emotive response, nor is it hard to sway public opinion, since nobody seems to like the facts to get in the way of a good story in these situations.

Behind the claims of exploiting actors who are cast in the "non-Union" Hobbit production, and claims that various high-profile stars will refuse to take part in the films, there are clear agendas at work. As usual with these agendas, they are based on money and power.

I am not a lawyer, nor am I an expert in unions and how they operate - but I like to think I have a degree of common sense, and that's what I'm basing my observations on. Let me run over a few facts:

-- Personally speaking, I'm not anti-Union in the slightest. I'm a very proud and loyal member of three Hollywood Unions - the Directors Guild, the Producers Guild and the Writers Guild. I support the Screen Actors Guild (SAG). All these organisations (I must confess I'm not entirely sure what the difference is between a "Guild" and a "Union") do terrific work on behalf of their members.

-- Many Actors are members of SAG, but many are not -- especially younger actors and many Australian and New Zealand performers. MEAA claims we are "non-Union", but whenever we hire an actor who belongs to SAG, we always honour their working conditions, their minimum salary agreements and their residuals.

-- The SAG residuals is a small pot of money that comes from the movie's profits. The DGA and WGA have similar schemes. An agreed upon percentage of movie profits is placed in a pot, which is shared amongst the members of the guild who worked on the film in question. Despite MEAA claims that The Hobbit is "non-Union", our studio, Warner Brothers, is honouring these residuals, and making the profit sharing available to all the various Guild members - just as it did on The Lord of the Rings, and Universal did on King Kong.

-- These residuals can be worth tens of thousands of dollars to an individual if the film is successful - however the normal situation is that if an actor is not a member of SAG, they do not share in the profit pot.

-- This has always struck us as unfair, since most Kiwi actors are not lucky enough to be SAG members. For the Hobbit, Warner Brothers have agreed to create a separate pot of profit participation, which will be divided up amongst non-SAG actors who are cast in the film. This was not done because of any pressure from Guilds or Unions - it was actually Warners doing the decent thing, and New Zealand and Australian actors will be the principle beneficiaries. SAG members have their pot, and non-SAG members now have theirs. We have introduced the scheme to Kiwi agents and it's now part of all our Hobbit cast deals.

-- Whatever damage MEAA is attempting to do -- and it will do damage, since that's their principal objective in targeting The Hobbit - we will continue to treat our actors and crew with respect, as we always have.

-- As I said earlier, money and power lies behind this threatening behaviour from our Australian cousins, and to fully understand that, you simply have to step back and look at the greater picture in context.

-- It starts with "NZ Actors Equity". This is a tiny organisation that represents a small minority of New Zealand Actors. They are not a Union, and have none of the legal status of a Union. They are a ... well, a smallish group who have some New Zealand actors as members. How many actors are members of NZ Equity? They guard that information very closely, but various reports I've seen put their membership at 200, although somebody in the know swears it's nearer 100.

-- How many professional actors are there in New Zealand? Somewhere between 2000 and 4000, depending on just how you describe a "professional actor". Obviously most Kiwi actors have other employment too, but there's certainly over 2000 actors available to cast in a film production.

-- So taking the most generous numbers, NZ Actors Equity represents 200 out of 2000 Kiwi actors, or 10%. Perhaps I'm wrong, and if so, NZ Equity will no doubt reveal their real membership numbers.

- Now there's nothing wrong with NZ Actors Equity representing 10% of the actors in this country. It's great that they offer that service, and if an actor chooses, there's a supportive group they can join. Obviously the more actors that join NZ Equity, the better, since these organisations usually survive by taking a small percentage of their members acting fees. I'm guessing that Equity do something like that. Recently they have been part-funded by MEAA.

- Over the last 10 years our relationship with NZ Equity has been rocky -- whenever we cast an "overseas actor", we get a letter telling us why such and such Kiwi actor would be so much better in the role. In most cases we have already auditioned the actor in question, and formed our own opinions -- but what strikes me as unfair, is how this "helpful" service of suggesting better choices only includes the "Equity 200". If you happen to be a good actor who doesn't belong to NZ Equity (and many don't), you're automatically not good enough to be put forward.

-- What really does strike me as wrong, and this is my personal opinion, is the why that the MEAA is using NZ Actors Equity as a vehicle to represent the voices and opinions of New Zealand actors. A couple of years ago, the members of NZ Actors Equity voted to join some kind of alliance with the Australian MEAA group. At the time, there were voices of alarm at how this relationship could damage the interest of Kiwi Actors, but the merger went ahead - and now we're about to find out just how damaging it's going to be.

-- As far as I know, the membership of NZ Actors Equity was allowed into the MEAA, meaning that the Australian MEAA organisation represents 200 out of 2000 Kiwi actors. I don't believe it represents non-Equity NZ actors. It speaks on behalf of a tiny minority of our actors.

-- The management of NZ Equity are clearly happy to be used as a political football by the Australians -- but my sympathy goes to the 1800 New Zealand Actors who are not part of the "Equity 200", but who are going to suffer the fallout if this Hobbit thing goes nuclear.

-- I also feel a growing anger at the way this tiny minority is endangering a project that hundreds of people have worked on over the last two years, and the thousands about to be employed for the next 4 years. The hundreds of millions of Warner Brothers dollars that is about to be spent in our economy.

-- Why is this endangered? Because the "demands" of MEAA cannot be agreed to, or even considered - by law - and therefore the only options that remain involve closing the Hobbit down, or more likely shifting the production to Europe. It could so easily happen. I've been told that Disney are no longer bring movies to Australia because of their frustration with the MEAA.

-- The MEAA is demanding that the Hobbit production company (Warners owned, 3foot7 Ltd) enter into negotiations for a Union negotiated agreement covering all performers on the film.

-- I personally have a problem with any organisation who represent a small minority, but attempt to take control of everyone - but that's not the real issue. The complex web of NZ labour laws are the reason why this demand will never be agreed to.

-- NZ law prohibits engaging in collective bargaining with any labour organisation representing performers who are independent contractors, as film actors clearly are. The NZ Commerce Act claims it would be unlawful to engage with an Australian Union on these matters.

In closing:

My personal opinion is that this is a grab for power. It does not represent a problem that needs a solution. There will always be differing opinions when it comes down to work and conditions, but I have always attempted to treat my actors and crew with fairness and respect. We have created a very favourable profit sharing pool for the non-Union actors on The Hobbit -- and now the Union is targeting us, despite the fact that we have always respected SAG conditions and residuals.

I can't see beyond the ugly spectre of an Australian bully-boy, using what he perceives as his weak Kiwi cousins to gain a foothold in this country's film industry. They want greater membership, since they get to increase their bank balance.

The conspiracy theories are numerous, so take your pick: We have done better in recent years, with attracting overseas movies -- and the Australians would like a greater slice of the pie, which begins with them using The Hobbit to gain control of our film industry. There is a twisted logic to seeing NZ humiliated on the world stage, by losing the Hobbit to Eastern Europe. Warners would take a financial hit that would cause other studios to steer clear of New Zealand.

-- Seriously, if the Hobbit goes east (Eastern Europe in fact) -- look forward to a long dry big budget movie drought in this country.

-- Others gain from that too. SAG would much rather have it's members hired on movies -- as opposed to non-SAG actors. The easiest way to control that, is to stem what are called "runaway productions", which are American funded films made outside of America. The Hobbit is one of them, as was King Kong and LOTR. SAG, which is naturally supporting MEAA, would see it's own benefit in studios having a miserable experience in Australia/New Zealand. That may well be pushing the conspiracy theories one step too far, and it's perfectly natural that one Union would support another - but the point is that in the complex web of Hollywood intrigue, you never really know who's doing what to whom and why.

But it sure feels like we are being attacked simply because we are a big fat juicy target - not for any wrong doing. We haven't even been greenlit yet! It feels as if we have a large Aussie cousin kicking sand in our eyes ... or to put it another way, opportunists exploiting our film for their own political gain.

Peter Jackson

(NB: This represents Peter Jackson's opinion as a Kiwi filmmaker, and not that of Warner Bros or New Line Cinema, who were not consulted about this statement.)