New coin solutions being prepared
BERLIN — German film biz reps have welcomed a new government-backed initiative to raise E90 million ($114 million) over the next three years to back local films after Chancellor Gerhard Schroeder moved to bury private investment funds that back Hollywood productions.
“For German producers now in Cannes, it is essential that they be able to present to their international partners a positive signal from the German government’s official film policy,” says Georgia Tornow, head of producer org Film 20.
The government’s closure of tax-sheltering film funds has been seen internationally as the beginning of a hostile era for the film industry, Tornow adds, and “that is something that scares away partners.”
But the announcement of a new government-approved fund structure “effectively counters this impression,” Tornow says.
German Culture Minister Christina Weiss announced the new plan May 10 following a meeting with Schroeder and industry reps. For the local industry, it’s a sign that it has not been abandoned by the government, which shut down tax-haven investment funds as part of wide-ranging tax reform aimed at kickstarting Germany’s stagnant economy.
That move met with widespread condemnation from the local industry even though most of the money raised had been funneled to Hollywood. David Groenewold, head of German Film Prods., a film fund that focuses solely on Teutonic TV and film productions, calls it a lost opportunity, while Petra Mueller, head of regional subsidy board Medienboard Berlin-Brandenburg, says any action that limits film production in Germany is a setback for the industry.
Pointing out that $114 million over three years “isn’t a whole lot,” Mueller says the new initiative appears to be a step in the right direction, but cautions it’s too early to assess the plan, adding the industry was eagerly waiting to see how the plan pans out.
A committee made up of industry reps and government officials in the coming weeks will iron out the details and finalize the new fund structure.
Film 20 had been pushing a sale-and-leaseback scheme, allowing producers to sell a film to investors and then lease it back, but it was flatly rejected by Schroeder’s finance minister.
Yet Tornow says it is obvious to everyone, government officials included, that the continued development of investment vehicles to raise private capital for film remains of the utmost importance. It’s now simply a matter of “rethinking the incentive mechanism” of such funds, she adds.