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VW backs out of Berlin sponsorship

Festival left with $2 million budget shortfall

The Berlin Film Festival will celebrate its 60th anniversary next year without main sponsor Volkswagen.

The car giant decided not to renew its seven-year partnership with the German fest on Wednesday after suffering a dramatic decline in first-quarter profit.

Berlinale organizers, who called the move regrettable, are now left with an estimated E1.5 million ($2 million) hole in the $22.6 million budget for the event, which will run Feb. 11-21.

About a third of the fest’s funding comes from the Federal Commissioner of Culture, a third from merchandising and ticket sales and a third from sponsorship, which still includes its other main partners, pubcaster ZDF and French cosmetics giant L’Oreal.

VW also sponsored the Berlinale Talent Campus’ Volkswagen Score Competition for young filmmakers and sound designers and provided cars for the European Film Promotion’s Shooting Stars event.

There were signs of VW’s tightening budget at this year’s Berlinale. The People’s Night bash — traditionally one of the fest’s hottest parties — was cancelled after the automaker withdrew funding.

VW, Europe’s biggest carmaker by sales, has been rocked by the financial crisis. On Wednesday, it posted a 72% drop in first-quarter net profit as global demand for cars fell.

The company, which has managed to stay in the black only through severe cost cutting, said prospects for the rest of the year are still uncertain.

The Berlinale is expected to sign up a new automaker to chauffeur its visiting stars to next year’s red carpet premieres.

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