Amazon in negotiations with government over $50m Lord of the Rings sweetener

Despite filming being slated to start next month in Auckland on the billion-dollar Lord of the Rings TV series, producer Amazon and the Government are still locked in negotiations over tens of millions of dollars in subsidy sweeteners.

New Zealand was announced in September as the base for production of the series, adapted from JRR Tolkien's fantasy books. Documents obtained under the Official Information Act show that announcement followed long-running negotiations with the Government that began with key Amazon executive Bruce Richmond meeting Cabinet Minister David Parker in December 2018 following an early "confidential recce" of the country.

Briefings for Parker written early last year said winning hosting rights would "facilitate the retention and refresh of our 'Middle-earth' brand, and open a door to a wider relationship with the wider Amazon business network".

The series has already been green-lit by Amazon for at least two seasons and is widely reported to have a budget of more than $1 billion. New Zealand's hosting of the production came after beating stiff competition from the likes of Scotland, largely because of the level of subsidies offered to international screen productions.

Ministry of Business, Innovation and Employment policy director Robyn Henderson said in a statement that Amazon's Lord of the Rings qualified for New Zealand's baseline 20 per cent subsidy - which is likely to see $200 million paid to Amazon - but in January last year the company was invited to apply for a 5 per cent uplift.

This bonus sweetener is intended for productions which generate a "significant economic benefit" and could be worth another $50m to the studio.

"Amazon submitted an application in late 2019. This application is under consideration and subject to ongoing negotiations," Henderson said of discussions about the uplift.

The uplift has been controversial in the past; in 2018 it was revealed that television series Power Rangers had successfully applied for an extra $1.6m in funding partly on the basis that one of its episodes featured the baking of a pavlova.

The criteria for securing the uplift were subsequently tightened, including requiring an invitation from MBIE to apply. The qualification test is a complicated points-based system, but industry sources have said Amazon would struggle to pass it given the apparent lack of New Zealanders employed in key positions on and off the screen.

In an initial casting announcement last month, Amazon announced 15 actors would appear in the first two episodes - including Americans, Britons, Australians and an Iranian - but no New Zealanders. And biography searches for key crew and creative staff on the IMDb movie and TV database seem to show only one New Zealander behind the camera - costume designer Kate Hawley.

Equity New Zealand director Denise Roche, whose organisation lobbies for actors, confirmed the principal cast lists released to date by Amazon featured no New Zealand names, but she was hopeful that would change. "We are hearing around the traps that there are New Zealanders being auditioned, and we've heard that there will be further announcements," she said.

Roche said she was in favour of requiring international productions to have a quota of roles to be filled locally.

"And not just as featured extras," she said. "There's limited opportunities for actors to progress, and so we want to grab every opportunity we've got in order for us to have some more Sam Neills."

New Zealand Film Commission boss Annabelle Sheehan, who was involved in meetings with Amazon at the Beehive and is also part of the panel assessing Amazon's uplift application, said the dragged-out negotiations were "not actually that unusual".

She said Amazon was well-aware of the uplift criteria, and New Zealand personnel involvement was one of the subjects under discussion.

"The production is pretty well-aware of those criteria, and how to be best-placed to qualify," she said.

Since the uplift criteria were tightened in 2017, only a few productions have been invited to apply for the increased subsidy, including Mortal Engines and Ghost in the Shell .

Sheehan admitted she didn't know of any cases where an invitation was extended to a production that didn't subsequently result in the additional payment. "Not that I'm aware of so far. It's only been in place since 2017, and there's only been a handful of projects," she said.