Dileepa Fonseka is a political reporter based in Wellington who covers housing, infrastructure, immigration, transport, local government and the Provincial Growth Fund.

Covid-19

NZ film industry feeling effects of Covid-19 cancellations

The impact of Covid-19 on New Zealand’s economy is gradually spilling out from the obvious export sectors to others like the film industry

New Zealand’s film industry players will be hoping a recent cancellation isn’t the start of a trend, but chaos in the film industry beyond our borders makes that more likely.

The film industry in the United States has faced a raft of cancellations and postponements in the space of a few days: yesterday the major US film exhibitor expo CinemaCon was cancelled and Universal TV halted the production of three television shows while Universal Studios delayed the release of Fast and the Furious 9 by a year.

The ‘Beast’ retreats

US movie production Beast, with Deadpool’s Morena Baccarin in the lead role, is the first known international film project in New Zealand to be affected by Covid-19.

Beast was slated to go into pre-production in March, but that work was pulled back by LA-based studio The H Collective on account of Covid-19 fears.

“As a precautionary measure and in order to ensure our crew’s health and safety, production on Beast has been temporarily halted,” a spokeswoman for The H Collective studio said.

“The H Collective and Rakuten are working to cease non-essential activities to help prevent the further spread of the coronavirus. We will continue to actively monitor the situation and resume production once this global health emergency has been contained.”

Newsroom understands the film would have been shot in Auckland with a mainly local crew while the film production's department heads were US-based and would have been flown in.

‘Unprecedented’

Multinational firms in a whole raft of industries have tried to pare back “non-essential” international travel on the back of coronavirus fears.

Newsroom understands some US-based actors and crew have expressed a reluctance to travel to New Zealand because of travel complications they might face when they need to return.

Equity NZ director Denise Roche said the pulling of pre-production on an international movie production was a significant event given the months of planning and work that would have gone into setting it up.

“This is kind of unprecedented,” Roche said.

“It’s quite a long process to get a production going ... there would be a schedule that’s been set up based on weather, finances and all that,” she said.

“It would cost the production company quite a lot of money [to cancel].”

Roche said Equity NZ would seek legal advice on the ‘force majeure’ clause, which she believed was used to cancel contracts for Beast. She wanted to know what, if any, compensation actors could claim if other film productions were cancelled.

Force majeure allows parties to alter a contract when an event outside of either party’s control prevented that contract from going ahead.

“We’ve heard all the discussions over the last two weeks from business leaders and politicians that it’s important for businesses to talk to their banks, the other one they probably should start to talk to is their lawyers."

Force majeure clauses were standard across a range of actor contracts, she said.

“I’ve definitely got concerns,” Roche said.

However, Graham Dunster, director of Auckland Actors, said international productions, including Amazon’s Lord of the Rings and Netflix’s The Power of the Dog already under way in New Zealand were unlikely to be affected by Covid-19.

“I don’t think there’s any panic on the ground from the industry here about the virus from the point of view of the domestic situation,” Dunster said.

Force majeure

Victoria University of Wellington law professor Gordon Anderson said the World Health Organisation’s declaration of a pandemic would likely justify the use of ‘force majeure’ clauses in contracts across a number of industries.

Force majeure clauses would spell out how risk would be allocated if something unexpected happened and who would bear what costs, he said.

Actors were considered contractors so did not have the full rights of employees, he said.

“In any significant commercial contract, the parties themselves will write a ‘force majeure’ clause and essentially that’s going to vary massively according to the particular industry,” Anderson said.

“It depends very much how it’s written, I would assume with the film one it would be written pretty broadly,” he said.

Infometrics economist Brad Olsen said a whole range of businesses should think about how force majeure clauses could affect their own business commitments.

“We’ve heard all the discussions over the last two weeks from business leaders and politicians that it’s important for businesses to talk to their banks,” he said.

“The other one they probably should start to talk to is their lawyers around those force majeure clauses in all of their contracts,” Olsen said.