Spain ups distrib aid to $25 mil

Coin will boost Euro pics

MADRID — Spain’s Ministry of Culture and Official Credit Institute (ICO) have teamed to establish a credit facility for the distribution of Euro pics in Spain. The low-interest line looks set to be tabbed at Euros20 million ($24.56 million).

The funds offer indie distribbers low-interest loans up to Euros300,000 ($368,400) per pic capped at 50% of a distributor’s combined minimum guarantee and P&A costs.

Another action line will grant distribbers up to $44,208 and 70% of expenses to digitalize 10-pic packages for Internet distribution.

The Ministry and ICO will sign off on both accords in upcoming weeks.

Spain’s government has also increased direct grants for Euro films distribution by 58% to a total Euros1.5 million in 2006. Maximum subsidy per pic last year was around $36,000, said Miguel Morales, director of distribution for arthouse indie Wanda Vision.

The distribution facility won’t cause a revolution in film pickups for Spain from other Euro countries: The moneys are loans, not non-returnable subsidies; apart from pubcaster RTVE, other broadcasters hardly acquire European films beyond Spanish pics.

But the credit line will mark a further step in the cautious recuperation of Spain’s art film and crossover sector. Art films sales to Spain nearly collapsed between 2002 and 2004 after broadcasters and pay TV operators stopped buying indie films.

RTVE’s currently selective acquisition of art films, plus the success of select titles such as Alta-handled “The Chorus,” (which grossed $8.8 million in Spain), has encouraged distribbers to return to selective acquisitions.

“The ICO aid could be important, allowing a larger financial flexibility for distributors at a tough time for indie distribution in Spain,” said Morales.

The new measures may also encourage new entrants into the distrib sector, and encourage other established distribbers to cautiously build their acquisition slates.

As in 2005, the distribution aid will not be made available to U.S. studios distrib ops in Spain.

Hiked distribution aid is the only major novelty in a multi-point government Action Plan unveiled Thursday with bells and whistles by culture minister Carmen Calvo.

Coming just four days before Sunday’s Goya Awards, the Plan looks more like a grandstanding attempt to deflect criticism before this high-profile industry sounding board than a radical overhaul of Spain’s industry.

Some measures included in the Action Plan are known, such as the creation of an SGR bank guarantee fund, unveiled September. Most changes are nominal.

In the most notable departures, advance subsidies, granted at screenplay stage for experimental, low-budget or first-and-second films, climbs 38% to a maximum $614,000 per pic.

Another initiative, currently under study, offers grants to cinema theaters specializing in European and Latin American films.

Spain’s Ministry of Culture puts the number of films produced in Spain last year at 142 and market share for Spanish films at 16.7%.

Spanish pics market share is the second best since 1984, aided last year by Spain’s increasing custom of not only hosting but also co-producing big international shoots: Both Ridley Scott’s “Kingdom of Heaven” and “Sahara” were Spanish co-productions.

But, after a near doubling in 2005, the Ministry of Culture’s subsidy fund has been near frozen at $79.2 million for 2006.

The 142 productions in 2005 gives some idea of a Spanish film industry that is good at turning out scores of macro-movies but lacks state-backed financing for more ambitious films.

A rise in caps for “automatic,” box office tabbed subsidies from $1.1 million to $1.2 million per film was dubbed “inadequate, ridiculous” by Morena Films producer Juan Gordon.

The lack of Ministry funds for film is no fault of Spain’s passionate Culture Minister Carmen Calvo.

As all over Europe, state spending in Spain is coming under increasing fiscal pressure; finance minister Pedro Solbes runs a tight budget.

The Action Plan is largely remarkable for what it did not mention: an increase in fiscal exemptions for Spanish filmmaking.

Given that, the stage seems set for 2006. Producers will argue that Spanish cinema is grabbing more share, but the momentum can only be sustained by substantial tax breaks. Spain’s finance authorities may well turn a deaf ear.

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