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E.U. Commission Reups And Expands Film Subsidies

The E.U. has renewed its Communication Cinema policy comprising regulations for film subsidies

By Elsa Keslassy

PARIS— European industry players have gotten their happy ending: The European Commission has finally reupped film subsidies and preserved territorial obligations following 18 months of intense lobbying from film boards and guilds.

Regrouped under the Communication Cinema policy, the regulations were first created in 2011 to level out state aids across Europe and prevent the subsidy race between countries.

The new policy still allows producers to raise up to 50% of their film budgets via subsidies, and it now considers eligible spendings related to script-writing, development, film distribution and film promotion (including film festivals). The previous text was  only taking production costs into account.

“Aid to production alone risks stimulating the supply of audiovisual content without ensuring that the resulting audiovisual work is properly distributed and promoted,” stated the E.U.. “It is therefore appropriate that aid may cover all aspects of film creation, from story concept to delivery to the audience. “

Another positive change, the aid is upped to 60% of the budgets for pan-European co-productions. Meanwhile, producers of smaller-budgeted films will be able to raise up to 80% of their budgets via subsidies.

A major victory for European industryites, the E.U. Commission opted to maintain territorial spending obligations – capped at 80% of the production budget — after initially claiming its intention to bent restrictions on the origin of goods, services or workers used by a production.

Member states will be able to require that producers spend the equivalent of 160% of the aid in their territory.

Led by France, the UK, Germany, Italy and Spain, E.U. states inject an estimated 3 billion Euros ($4 billion) per year in film support, including $2.7 billion in grants and soft loans, and $1.3 billion in tax incentives. Film productions draw approximately $2.7 billion per year in state aid.

The stakes were high for the Euro film industry : At present, Europe’s tax rebate programs generate an estimated $939 million every year ; and 80% of that amount is injected in European films, according to Patrick Lamassoure at Film France Commission.

While the E.U. acknowledged the fact that vidgames “may represent one of the fastest-growing form of mass media in the coming years,” it didn’t include them in the Communication Cinema policy.

“Not all games necessarily qualify as audiovisual works or cultural products. Therefore, the rules designed for film production cannot apply automatically to games,” stated the E.U. Commission, adding that games which serve a cultural or educational purpose may be eligible to receive E.U. fundings.

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