TV money gooses budget

Telecinco financed 78% of 'Pan's Labyrinth'

BARCELONA — The “Pale Man,” a lizard-faced underworld creature, startles a young girl, sticking eyes into the palms of his clawed hands.

The scene, from Guillermo del Toro’s “Pan’s Labyrinth,” has haunted filmgoers worldwide. “Labyrinth’s” talent comes from its cast, an excellent Spanish-Mexican crew and the gifted del Toro. But 78% of financing was ponied up by Spanish commercial broadcaster Telecinco.

“Labyrinth” underscores how broadcasters are forging a new film landscape in Spain.

Three 2006 releases, all broadcaster-bankrolled — Antonio Hernandez’s “The Borgias,” “Labyrinth” and Agustin Diaz-Yanes’ “Alatriste” — have established milestones, and business models, for Spanish filmmaking.

Indeed, Spain’s broadcasters are the local film industry’s new drivers, with their tentpoles strengthening post-production houses and building Spain f/x industries along the way.

Investing in film, broadcasters are making a virtue out of a necessity. Regs passed in 1999 obliged them to invest 5% of their annual revenues in European films. Starting in 2001, 3% of revenue was reserved for Spanish-language movies.

The obligation’s a large one. In 2005, Spanish broadcasters spent a combined E100.8 million ($135.4 million) pre-buying or co-producing Spanish movies, accounting for roughly a third of all Spanish film investment.

Compare that figure with France, where quota-driven TV finance for French films reached $353.8 million in 2006 . It is probably a little under Italian TV investment, estimated at $150 million. But it dwarfs the U.K., where the BBC and Channel 4, the country’s most active films investors, put up just $39.4 million combined for British films in 2006.

Spanish broadcasters’ commitment looks set to expand as well.

“TV operators’ annual turnovers (revenues) have grown, forcing us to increase investment,” says Alvaro Agustin, CEO of the recently created Telecinco Cinema, a new Estudios Picasso division.

The broadcasters bring a new budgetary ambition to flagship projects as well.

“Producers receive the same state subsidies for a $3 million or $30 million film. So they prefer to make four small ones to one big one,” says Teddy Villalba, Antena 3 director of fiction.

Far better capitalized, so far less risk-averse, broadcasters have raised the ante, putting up majority financing for the $28 million “Alatriste,” the $18.4 million “Labyrinth” and the $13.4 million “Borgias.”

More moolah doesn’t guarantee B.O. success, of course. The $14.7 million “Tirante el Blanco” grossed just $2.1 million.

But “Labyrinth” and “Borgias” both look to have turned healthy profits.

“Borgias” nabbed $9 million in Spain. It will ship 13,000 DVDs, with an estimated

$2 million in sales. Villalba puts international sales at $4 million and state aid at $1.3 million. Selling to Antena 3 and Valencian pubcaster Canal 9, it has moved into the black.

Larger budgets allow for new creative ambitions, stars and sweep. Besides “Alatriste,” a period pic toplining Viggo Mortensen, “Labyrinth” and “Borgias,” there’s serial killer thriller “The Oxford Murders,” starring Elijah Wood and co-produced by Telecinco.

Antena 3 has just boarded Woody Allen’s summer 2007 Spain shoot, starring Scarlett Johansson and Penelope Cruz.

Marketing savvy

Audience-savvy Telecinco and Antena 3 have brought new marketing muscle to pics and a new sophistication in production. Antena 3 has created five production lines akin to studio labels, to position and target pics. Its Grandes Producciones unit has Alejandro Toledo’s $32 million “Independencia!,” which is set against Napoleon’s siege of Zaragoza, in pre-production. It’s attached Antonio Hernandez to direct World War II espionage thriller “Garbo.” Miguel Bardem is shooting the $13.4 million “Mortadelo & Filemon: Mission: Saving the World,” On Pictures’ first feature, co-produced by Antena 3.

Telecinco spreads risk across a varied portfolio. “We aim to make one big project annually plus one or two strongly backed feature debuts,” Agustin says. Co-productions range from Steven Soderbergh’s two Che Guevara pics to Juan Antonio Bayona’s Critics’ Week player “The Orphanage” and Emir Kusturica’s Maradona docu.

Bigger-project ambitions are not limited to Telecinco and Antena 3 TV.

At Berlin, top art pic producer Wanda Vision announced that Fernando Perez (“La vida es silbar,” “Suite Habana”) has committed to helm a film about Cuban poet Jose Marti as part of a five- to seven-film collection, “Libertadores.”

Turning on 19th-century Latin American freedom fighters, the collection is co-produced with actor-producer Sancho Gracia and Spanish pubcaster RTVE.

Per David Martinez, RTVE’s new head of fiction, the pubcaster is still defining its strategy for the unit. Martinez’s own background — at Galicia’s Voz Audiovisual, he was the prime mover of the $13 million “Garbo,” now set up at Antena 3 — suggests he isn’t afraid of higher-end movies.

Meanwhile, Catalan pubcaster TVC is backing “1714,” a War of Succession adventure movie/ miniseries, co-produced by DeAPlaneta and Mediapro.

Two clouds hang over Spanish broadcasters’ bigger-budget drive, however. One is occasional middlebrow output lacking enough edge for theatrical play. Another, say many producers, is that broadcasters will simply turn their backs on Spain’s indie sector.

But one thing’s for certain: New giants have appeared on Spain’s small production landscape, broadening its horizons.

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