Economic Development Minister Stuart Nash is under fire for not securing a pledge from Amazon to film additional seasons of its Lord of the Rings TV series in New Zealand.
The much-hyped first season of the Lord of the Rings TV show, which was filmed in New Zealand, will premiere on September 2 next year via Amazon's Prime Video streaming service.
But despite the Government giving Amazon a more than $100 million boost to film the series in New Zealand, the US e-commerce giant's TV arm has confirmed it will shift production of future seasons to the United Kingdom.
"The Government was informed of the decision yesterday," Nash said in a statement on Friday, adding that he was "disappointed" by the news.
Amazon announced in September 2019 it would film the TV series in New Zealand, and the following year the Government drew up a Memorandum of Understanding (MoU) to secure economic and tourism benefits, outside the screen production itself.
In exchange, Amazon was offered an extra 5 percent rebate or financial return, on top of the 20 percent every other international production gets under the International Screen Production Grant, to entice it to stay in New Zealand.
Amazon was expected to be spending about $650 million filming the first season of the show, meaning it would be eligible for a rebate of about $162 million.
National MP Todd McClay says Nash failed to negotiate a commitment from Amazon to film additional seasons of the TV series in New Zealand, and therefore thousands of jobs could be lost when it departs for the UK.
"This is a huge missed opportunity for New Zealand," McClay, National's economic development spokesperson, said. "Stuart Nash didn't even bother to ask the company to commit to filming a second season, if there was to be one, in New Zealand."
McClay said while Nash could argue it would be difficult to get a commitment from a studio to film a second season in New Zealand, film director James Cameron's team committed to producing three Avatar sequels here.
McClay fears it will have a devastating impact. The first season entered production in Auckland last year with more than 1200 people employed. An estimated 700 workers are indirectly employed by providing services to the production.
"Losing out on this means New Zealand misses out on more than $4.5 billion worth of spending and 2000 jobs have been put at risk."
But Nash told Newshub McClay is "confused" and "his claims are not borne out by evidence", as he did not even carry out the negotiations.
"Amazon Studios had not even committed to going ahead with a second series when the first MoU was signed so it's unrealistic to suggest it somehow should have been forced to commit to multi-year back-to-back projects.
"Amazon has raised no complaints about its experience with this production in New Zealand or problems encountered along the way.
"In fact, it has praised every Government agency it dealt with for their great collaboration, and for the way it was treated by Kiwis who hosted the cast and crew.
"Amazon's decision is not a reflection against anything NZ has done. It's a strategic commercial and operational decision to expand its studio facilities in the UK, because other Amazon Studios productions that are based there.
"Amazon has been clear that the move to the UK aligns with a bigger global strategy."
Amazon Studios Vice President and co-head of TV Vernon Sanders thanked the Government and the people of New Zealand "for their hospitality and dedication and for providing The Lord of the Rings series with an incredible place to begin this epic journey".
He confirmed the company does "not intend to actively pursue the season one MoU 5 percent financial uplift with the New Zealand Government or preserve the terms around that agreement".
The shift from New Zealand to the UK "aligns with the studio's strategy of expanding its production footprint and investing in studio space across the UK, with many of Amazon Studios' tentpole series and films already calling the UK home", the company said.
Louis Houlbrooke of the New Zealand Taxpayers' Union says Amazon has successfully played the New Zealand and UK governments off each other to secure massive handouts.
"We've warned time and time again that the only way to win the film subsidy game is to not play. Both National and Labour-led Governments have naively been drawn into taxpayer-funded bidding wars to woo film productions."
The TV series is set thousands of years before the events of J.R.R. Tolkien’s The Hobbit and The Lord of the Rings books, and "follows an ensemble cast of characters, both familiar and new, as they confront the long-feared re-emergence of evil to Middle-earth".
