San Sebastian’s director, the mild-mannered Mikel Olaciregui, isn’t known for posturing.So Spain’s film industry sat up in November last year when he threatened to resign in a festival website note. The rumble came after the Diputacion de Guipuzcoa, the regional authority, announced it was curbing its festival investment by 9% to E910,000 ($1.3 million). Olaciregui feared other backers would follow suit. That hasn’t happened. But having won a battle, Olaciregui’s still fighting a war. Some 40%-plus of San Sebastian’s budget now comes from nonpublic coin, mostly sponsors and ticket sales. Schweppes has dropped out as a sponsor, though Basque bank Kutxa doubled its backing to nearly $360,000. Having exhausted contingency funds, the festival has cut this year’s event from 10 to nine days. San Sebastian’s current fiscal crunch masks large ironies. The festival tickets sales are strong as SRO crowds pack many screenings. But San Sebastian’s losing theaters. It’s not just film festivals that are feeling the sponsorship squeeze. Spanish advertising faces the worst bear market in history. According to Screen Digest’s Daniel Knapp, advertising will plunge 22.7% in 2009, and a further 8.8% in 2010, trouble for not only TV but also for films and related industries.