Labor strife must be settled first; Peter Jackson on board to direct

New Line and MGM have officially greenlit “The Hobbit” with shooting starting in 3D in February and Peter Jackson directing.

The studios, which are co-financing the two-pic project, have not yet sorted out where they’ll shoot “The Hobbit” in Jackson’s home country New Zealand as planned. That will depend on whether the producers can sort out a thorny dispute with actors unions.

New Line, MGM and Warner Bros. (parent of New Line) issued a joint announcement late Friday afternoon. It came nearly three years after they agreed to join up on a big-screen version of JRR Tolkien’s epic fantasy novel about the adventures of Bilbo Baggins, who obtains the ring that was the centerpiece of “The Lord of the Rings” trilogy of books and films.

The announcement also confirmed that Jackson will direct both segments in addition to writing and exec producing. Jackson’s been widely expected to direct since Guillermo Del Toro’s departed the from the director gig in May.

But the announcement — made jointly by New Line topper Toby Emmerich; Alan Horn, president of Warner Bros.; and Steve Cooper, co-CEO of MGM — made no mention of where “The Hobbit” will be lensed.

The Screen Actors Guild had no comment Friday. SAG and half a dozen actors unions had advised its members on Sept. 24 to boycott “The Hobbit” due to a dispute between producers and the New Zealand actors union, which is alleging that local performers are treated unfairly and deserve a union contract.

Jackson’s responded to the unions’ boycott by threatening to move the production from his home country of New Zealand to Europe. He and the studios have alleged that it would be illegal to sign a deal with the New Zealand union because it operates as a branch of the Australia-based Media, Entertainment & Arts Alliance — a stance disputed by the unions.

According to a source close to the situation, the studios have explored moving “The Hobbit” to several other countries including Australia, Canada and Scotland. Jackson issued an enthusiastic endorsement of the greenlight on Friday.

“Exploring Tolkien’s Middle-earth goes way beyond a normal film-making experience,” Jackson said in the statement. “It’s an all-immersive journey into a very special place of imagination, beauty and drama. We’re looking forward to re-entering this wondrous world with Gandalf and Bilbo – and our friends at New Line Cinema, Warner Brothers and MGM.”

Preproduction on the films has been underway for many months in New Zealand, where Jackson shot the “Lord of the Rings” trilogy for New Line. Del Toro, who committed to direct “The Hobbit” pics in 2008, said in May that sets, wardrobe, animatics and planned battles sequences had all been fully prepared.

Financial difficulties faced by MGM, which owns half of the project, have also added to the uncertainty over “The Hobbit.” More than 100 MGM’s debtholders were asked last week to approve a pre-packaged bankrupcty plan that would wipe out the equity and leave Spyglass Entertainment execs in charge with a 5% stake, but Lionsgate Entertainment has proposed a merger that would give debtholders a 55% stake.

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