The Hobbit not out of the Shire yet

Studios back Peter Jackson, but production still delayed by MGM.

It’s hard to imagine that a film like The Hobbit, with a built-in audience just waiting to be taken back to middle-earth and the land of the Shire, could face so many production delays. Last week union troubles drove director/producer Peter Jackson to threaten a shutdown of the planned two-part movie – troubles he said “feels as if we have a large Aussie cousin kicking sand in our eyes.”

It was originally reported early last week that union pressures were coming from The International Federation of Actors (who represent seven unions in the US, Australia, the UK and Canada), saying New Zealand actors were not working under union contracts. Jackson is a native of New Zealand, and all three of the Lord of the Rings films were shot there.

Reports went so far as to say actors like Ian McKellen (slated to play Gandalf) would be in violation of the union’s bylaws and therefore possibly expelled from the union. However, Jackson called the union “opportunists exploiting our film for their own political gain.” He also said he would move the production to Eastern Europe if necessary to produce the film.

But in a joint statement issued later from New Line, Warner Bros. and MGM the studios took to the defense of Jackson saying “to classify the production as “non-union” is inaccurate. We believe that in this case the allegations are baseless and unfair to Peter Jackson and his team in Wellington who have been tireless supporters of the New Zealand motion picture community.”

The statement shined a better light on The Hobbit movie, which according LA Times’ sources has already spent $45 million on scripting and pre-production. And, according to the LA Times the union dispute is close to being worked out and therefore closer to being green-lit.

The Hobbit’s other obstacles reach further back than the union dispute. Director Guillermo del Toro, who was involved with the film for 2 years, apparently decided to leave the production. Although not official yet, Peter Jackson will take over direction of the film.

A $100 million settlement with the Tolkien Estate has also held back production. The estate sued Warner/New Line over Lord of the Rings royalities last year.

Lack of financing of The Hobbit from Warner/New Line and MGM has also delayed start up. However, the LA Times reveals from unnamed sources that Warner/New Line are closer to giving the film a greenlight for startup in 2011. MGM (who had to shut down the newest James Bond film due to financial troubles) appears to be the only party who hasn’t fully committed financial support yet.