Central European players depend on int'l backing

While incentives to attract foreign producers have driven most of the film biz speculation this year in Central and Eastern Europe, alternative strategies for building business have proven just as important — and many countries are still betting solely on more traditional, if less sexy, approaches such as international co-productions.

These pacts, while not nearly as likely as to make headlines as incentives do, can be complicated, confusing, frustrating to employ — and critical, say local players.

The co-production system, which organizations and producers are constantly endeavoring to standardize, works along principles laid down by the European Union in 1992 and put into effect two years later. The Union, recognizing that individual nations of Europe would usually be too small to create their own canons of film, set up a rulebook still in force today — and seen as an essential tool in the newest EU member countries from the east.

The Eurimages fund, set up in 1988 to help protect and preserve European cinema, is key to the system as are rules setting minimums and maximums that each partner country kicks in, and the point system that determines who is eligible for coin and when a country can be considered a co-producer.

Major projects such as the upcoming adaptation of seminal Czech scribe Karel Capek’s “War With Newts,” a sci-fi story of apocalypse, has on board Czech director Tomas Krejci; Polish f/x house Alvernia Studios; and backers, including Germany’s Bavaria Film, to qualify as co-producers.

It will surely be applying for funds available in all three countries to help meet its ambitious budget goal of $8.5 million.

Of the estimated 48 pics in development this year, according to Czech Film Center numbers, at least seven are international co-productions, a percentage that seems to grow each year.

In countries with a less-robust production sector, such agreements are increasingly critical to success — especially in places where for the foreseeable future passing incentives is politically off the table, such as Romania and Bulgaria. Even in Hungary, the first nation of the former East Bloc to pass 20% cash-back sweeteners, local producers still have co-productions on their mind.

Gabor Kovacs, producer of Cannes competitor “Delta” and “Bibliotheque Pascal,” says the most worrisome aspect of the collapse of Hungary’s main coin source, the Motion Picture Public Foundation, months ago was that it would mean Hungarians could no longer bring their share of co-production investment to the table. That would scare off valued foreign partners, he says.

A new funding source has been set up since the collapse, headed by Hungarian-born U.S. producer Andrew Vajna, offering some $8.5 million to qualified local productions. But it has yet to go into effect, pending legal issues on its structure and rules.

“He may be a very nice guy,” says Kovacs about Vajna, but most observers remain skeptical as to whether the backer of the “Rambo” sequels can ride in, guns blazing, and rescue Hungarian film production.

The Culture Ministry still has $5.3 million a year available, but the biggest source of funding, garnered mainly from a tax on TV terrestrials, isn’t in play for the time being. In fact, says Kovacs, no one’s even sure the broadcasters are paying into it as required by media law.

In Romania, long accustomed to growing its local film sector and international cache without waiting for political support, there’s no talk of incentives at all. In fact, during the wrap of last year’s Transylvania film fest, the country’s biggest such international gala, the organizers rose up in a spontaneous protest, letting state film funding officials know what they thought of their performance.

This year it was an international co-production, “Phantom Father,” that was the festival’s highest-profile screening, with auds anticipating what helmer Lucian Georgescu could do with the support of German producer Joachim von Vietinghoff, a soundtrack recorded in Poland and a script by U.S. scribe Barry Gifford.

As von Vietinghoff says, if a story, characters and setting are strong enough, co-productions will come together without the need for any official funding orgs at all.

“It’s a kind of back-to-the-audience film,” says von Vietinghoff. “Festivals don’t like comedies so we’ll see.”

On the other hand, “Father” is a comeback for Romanian star Marcel Iures, whom most indies wouldn’t believe they could hire on an arthouse budget.

Czechs have been justly pumped up about being able to offer cash-back incentives for the last year, which has brought biz back to Barrandov’s studios from afar. But some bizzers argue that the spend limit required to qualify is too high to attract indie prods, while others worry that a change in government might bring in a parliament unwilling to keep incentives in the budget. Others posit that many U.S. states are offering better deals than 20% back these days.

Poland, meanwhile, has the region’s most stable, best-funded system for local productions, making them a viable co-production partner. What’s more, new regional funds — Krakow’s is just a year old, but is already bringing in biz — are adding to the attraction.

One indication of the role of co-productions going forward is that the Polish Film Institute, the country’s prime engine of film support, has added a division that deals solely with these international deals.

Not that incentives have lost their appeal: Serbia’s has been proudly touting recently implemented initiatives based on the Hungarian model for months now. It’s just that bizzers aren’t waiting around for local lawmakers to get on board. Nor are they counting mostly on big-budget U.S. and British productions to ride in on white horses, throwing money around

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