Program a 'full-blown success,' producers say

If the maxim that you can’t please all the people all the time generally holds true, then the team behind the German government’s Federal Film Fund (DFFF) are doing their best to disprove it.

Launched 13 months ago, the $80 million-a-year reserve has been a big hit with German film execs. It has helped boost the current glut of productions, generating an economic spend of x390 million ($572 million) for the country as a film location, per execs at Germany’s Federal Film Board (FFA), the body responsible for administering the coin.

Introduced to help the German film biz recover after the government nixed private tax-shelter film schemes, the fund grants a 20% refund on local spending to productions that shoot in Germany. International co-productions can only claim the subsidy if a local German partner is actively and creatively involved.

In 2007, 99 projects were supported, including 80 features, 14 docs.

Some of the more notable projects to receive DFFF coin have included Bryan Singer’s World War II thriller “Valkyrie,” which was awarded $7 million; Tom Tykwer’s “The International,” starring Clive Owen and Naomi Watts, which received $8.5 million; and the Wachowskis’ “Speed Racer,” whose $13.2 million grant is the biggest yet for any of the selected projects.

German productions are also benefiting from the fund. Teuton shingle Constantin’s terror drama “The Baader-Meinhof Complex” received nearly $4┬ámillion, for example.

“The fund has been a full-blown success so far for everybody, for the film industry, for the country and for the government,” says Constantin board member and production director Martin Moszkowicz. “The fund is exactly what it was meant to be: a real incentive to shoot films in Germany.”

“The smaller (films) probably wouldn’t have been shot at all because they were basically financed, to a certain degree, by the fund, while the larger projects would have gone somewhere else where you would either have had a subsidy system or lower costs, like Eastern Europe,” adds Studio Babelsberg topper Carl Woebcken.

DFFF execs are in the process of evaluating how to move forward, with their conclusions set to be published this spring. The international roadshow initiated last year to explain the fund’s initiatives to Euro film execs — panels were held at fests in Cannes, Vienna, Rome and London — will be expanded in 2008.

Film board execs are meeting with U.K. Film Council officials at this year’s Berlinale to discuss greater Blighty-Teuton collaborations.

For all the thumbs-ups, however, several issues remain to be tackled.

The fund only has a mandate of three years, meaning it’s currently set to expire by the end of 2009. While Germany’s finance minister, Peer Steinbrueck, has made some encouraging noises in recent months that the fund may be extended to 2012, this is far from being agreed upon.

Meanwhile, another factor is the weakness of the dollar against the euro, which determines the cost-effectiveness of big-budget U.S. productions traveling to shoot in Germany, as well as increasing rebate competitiveness from several U.S. states and Canada.

Fund execs also have local political considerations to keep in mind. Last year, Germany’s association of directors, the Bundesverband Regie, called for a review of the DFFF following the collapse of Jan De Bont’s “Stopping Power” after one of its main financial backers pulled out.

Pic, which was set to receive DFFF coin, was criticized by Bundesverband Regie topper Steffen Schmidt-Hug as having no obvious German cultural connection.

Singer’s “Valkyrie” similarly attracted its share of negative ink thanks to the controversy surrounding star Tom Cruise’s Scientology beliefs — viewed with particular suspicion in Germany — and a tortuous shoot that saw extras injured and run-ins with the authorities.

“Certain things will have to take place to ensure the fund works in the medium and long term,” Woebcken says. “We would like it a bit bigger than the current $80 million. … Another disadvantage is the fact that the fund is capped — with a capped fund, the money will always become less in the second half of the year. You want to know a year ahead of shooting whether you will get the money or not, but with this system you don’t know at which point there is enough money in the bucket.”

The DFFF certainly isn’t the only show in town in terms of state funding.

Germany’s nine federal and regional subsidy bodies all have coin to offer productions, with local politicians increasing their financial commitments to their funds. Officials in Brandenburg, for example, provided an additional $2.2 million to the Medienboard Berlin-Brandenburg fund.

Hamburg’s mayor, Ole von Beust, also upped the city’s financial contribution to its local fund by $1.5 million for 2008 and 2009 and a further $3 million for 2010.

Private equity also is entering the mix. “We can see more and more private money interested in exploring the possibilities offered by film,” says Michael Webber, managing director of Teuton sales company the Match Factory. “But for now, they cannot substitute the public funding which exists for German films.”

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