Well, it looks like Middle-earth is staying put after all.

Having secured, at long last, the right director and the right Bilbo, it looks like the right locale is now secure as well.

As reported in today’s New York Times, Warner Brothers has agreed to keep Peter Jackson’s production of “The Hobbit” in New Zealand after the government promised to change local labor laws and offered extra financial incentives.

The deal came after two days of talks between Prime Minister John Key and other government officials and executives from Warner and its New Line Cinema unit.

Filming of the two “Hobbit” movies, which is expected to start in February, had been threatened by a dispute over whether a New Zealand branch of an Australian union could engage in collective bargaining on the Hollywood films, which they have not been able to do in the past.

A New Zealand actors union, backed by a larger union, the Media, Entertainment & Arts Alliance of Australia, had demanded collective bargaining for work on the films, but both Warner and government officials contended that collective bargaining with actors was barred by New Zealand law.

You find all the details of the new law and the various financial incentives the Kiwis are offering Warner Bros to film ‘The Hobbit’ in New Zealand here.

Now they just have to get the rest of the principles onboard and actually make a great movie that stands up to the LOTR. That should be the easy part, right?

– S.