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Majors upset with quota law

The American majors are definitely not pleased with the recently approved distribution quota law in Spain, which will drastically restrict the number of non-EC films — basically American — they can distribute in the territory.

A spokesman for ADICAN, the majors association in Spain, says it is too late to do anything to change the law, which was passed by the Council of Ministers on Dec. 29, and is due for final approval by parliament within the next two to three months.

But the majors, under ADICAN, have submitted an official report to the culture ministry refusing to accept Spanish Film Institute director Juan Miguel Lamet as a valid mediator for further negotiations between the industry and the government.

The majors claim that Lamet withheld important information from them concerning the law reform, which prevented them from fully lobbying for their position on the legislation.

The new law states that the distribution quota for non-European Community film dubbed into Spanish–as all mainstream films are–will be based on a 3-to-1 ratio of non-EC to EC or Spanish films distributed in original version.

Whereas the old Spanish law allowed for an automatic license on a simple pickup of an EC film, the new legislation says that a distributor will qualify for a first license only after the EC film has grossed $ 200,000, with a second license granted after the film grosses $ 500,000. An optional third license could also be generated if the distributor entered as a 25% co-production partner on a film.

The brunt of the majors’ ire over the new law is the fact that licenses will only be generated by European Community films shown in original version. Ed Weinberg, topper of Warner Bros. Espanola, told Daily Variety, “We met with Lamet Dec. 10, and he assured us that the bill would allow for EC films, either in dubbed or original version to generate quota licenses. Twenty-four hours later we learned from the press that only original version films would generate licenses. Lamet knew it when we met, and we were purposely given misleading information.”

Antonio Recoder, director of ADICAN, explained, “Films shown in original version have a very reduced market, basically concentrated in Barcelona and Madrid. Only about 7% of the overall gross made on any film comes from original version prints here. There are very few EC films that will make the $ 200,000 necessary to generate a license, and fewer still if we have to depend on original version.”

The last-minute original version clause was lobbied for by Fundacion Procine, a lobby group formed by the largest 19 producers in Spain.

The basic idea behind forcing the original version issue is to ensure greater distribution of EC and Spanish films, as well as limit the 78% domination the American majors hold over the Spanish market.

Beside the distribution quota issue, Film Institute topper Lamet had also been instrumental in instigating negotiations between the majors and exhibitors to establish regulatory measures for fairer terms for Spanish exhibitors.

In fact, on the very day that Lamet is accused of withholding information, he also saw his first success with a signed agreement for acceptable flat rates between the smaller exhibitors and the majors.

This small victory, however, was to be the first of at least four distrib/exhib agreements.

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