Mid-budget films feel the squeeze

Change in laws transforms Spanish film biz

New reign in spain | Film sector turns to TV | Mid-budget films feel the squeeze | Case studies

The Spanish film industry is transforming its financing parameters, moved by two game-changing film laws.

The effects of a ministerial order, rewarding market-skewing movies, and a new audiovisual law, limiting broadcasters’ film investment, have been working through the system since early this year.

On July 20, the ICAA, Spain’s film institute, greenlit the first film-project subsidies, part of a new roadmap designed by general director Ignasi Guardans.

The institute allocated ?10 million ($12.9 million) in grants to three categories: experimental pics adapted from stage plays, projects of wide cultural interest and films from new directors. Twenty-one features and 14 docus pulled down this aid.

Albert Serra (“Birdsong”) received $578,700 for his “Historia de mi muerte,” budgeted at $1.6 million, while Javier Rebollo, best director at 2009’s San Sebastian (“Woman Without Piano”) took $643,000 for his $1.8 million movie “El muerto.” First-time helmer Arantzazu Alvarez’s Africa-set Western “Kenu,” co-produced by Andalusia’s Jaleo Films and budgeted at $1.9 million, took $643,000.

Some producers question the subsidy’s selection method of awarding coin to anonymous scripts.

“When you’re deciding subsidies for film projects, to be fair you need more than just a screenplay,” argues one producer. “You need producers’ names, directors, etc.”

Low-budget art pics can be fully financed out of Spain. ICAA financing is crucial, and then a large part of the budget can be covered via a pre-buy from pubcaster TVE, estimated at around $700,000, plus some aid from regional pubcasters or film funds. Theatrical B.O. revenues, by contrast, are often insignificant.

A major film festival berth can prompt extensive fest play at $1,000 per fest screening, and lead to a pickup from specialist art channels.

“The ministerial order’s points system for festival play offers up to $115,740 per movie,” says Luis Minarro at Eddie Saeta.

“The risk is higher for movies with budgets between $1.5 million and $7.7 million,” says Zentropia Spain topper David Matamoros.

As in other European markets, in Spain middle-budget pics are becoming more complicated to finance, with the result that fewer such films are being produced, per Mod Producciones’ Fernando Bovaira.

(But there are exceptions. The 2009 B.O. sleeper “Cell 211,” a sales hit for France’s Films Distribution, was budgeted at $4.5 million.)

The decline of mid-budget movies could be tragic for film-sector employment. “The mid-level companies form the lungs of the film industry,” says Zebra’s Antonio Saura.

Mid-budget pic producers are adapting to challenges. “One of our production lines will be artistically riskier projects, under $1.3 million, with zero commercial risk,” says Jaleo’s Alvaro Alonso.

Higher-end, more commercial movies can tap subsidies linked to box office. ICAA has earmarked no less than $67.4 million in 2010 for such subsidies, repping 15% of films’ B.O, capped at $514,400 for each pic.

But B.O.-oriented projects budgeted above $7.7 million play in another film league. They need well-known Spanish directors and attractive casts to draw more mainstream audiences in Spain and abroad.

High-budget projects also require a leading nationwide broadcaster — read Antena 3 or Telecinco — as a co-producer taking free-to-air TV rights and boosting movies’ releases with their powerful marketing divisions.

Local B.O. on these types of movies needs to justify their substantial P&A costs, and more mainstream producers are slimming slates.

“We’re taking fewer risks, choosing projects that seem most commercially viable,” says Morena Films’ Juan Gordon, “Cell 211” co-producer. “We’re betting on… directors and actors with higher visibility.”

The new audiovisual law worries filmmakers because it allows TV operators to plough some funds formerly used for feature film investment into TV fiction.

But for 2010 at least, Spanish TV investment in film “will remain relatively stable,” Bovaira says.

The “Agora” and “Biutiful” producer set that figure at around $135 million, of which $45 million to $51 million will come from TVE and regional pubcasters, and about $77 million from Telecinco, Antena 3, LaSexta, AXN and Disney, plus $13 million from telcos and pay TV channels Calle 13, Cosmopolitan and Fox, who are now obliged to invest in European or Spanish films.

“It’s less strict on Spanish investment requirements,” says Mecanismo Films’ Juan Romero.

Co-productions will increase under Spain’s new scenario, says Gordon, but that won’t compensate the film industry’s big roadbump: accessing bank credit.