Law forces rookie nets to pump coin into film

Spanish broadcaster inject money into pics

Spain’s telcos and newest TV broadcasters are injecting fresh money into Spain’s cash-crunched film production sector.

During the past decade, established TV operators, led by pubcaster TVE and private webs Telecinco and Antena 3, invested around €921million ($1.33 billion) in film production, obliged by Spain’s version of the EU’s Television Without Frontiers Directive.

In May 2010, the General Audiovisual Communication Law reduced private broadcasters’ movie obligations from 5% to 3% of their annual revenues but included telcos and new TV operators.

The TV quota and the ICAA Film Institute fund — set this year at $100.6 million — are the Spanish film industry’s main locomotives.

Film investment from the law could reach near $69.3 million a year, estimates producers org AEC. Of that, about $8.6 million would come from local telcos. Figure sets Spanish telcos’ contributions far below some European counterparts.

But, cautiously, telcos have initiated investment. Early moves include:

Telefonica’s Telefonica Prods, launched in 2010, is co-producing Enrique Gato’s $15 million 3D toon pic “Tad, the Lost Explorer” with El Toro Prods and Ikiru Films.

• Cable operator Ono has backed five pics: Jaume Balaguero’s psychological thriller “Sleep Tight,” and Paco Plaza’s “[REC] Genesis,” from Filmax; Arcadia Motion Pictures’ Sam Shepard starrer “Blackthorn” and Roberto Santiago’s laffer “Are You There?,” plus Telespan’s horror-comedy “Lobos de arga.”

• France Telecom’s Orange has co-produced Felix Fernandez de Castro’s theatrical documentary “Maria and I” via its Orange Foundation.

Orange is evaluating its film strategy in Spain, which could include minority stakes in movies set up at Paris-based film subsid Studio 37, per Orange TV head Ignacio Lopez Bandres.

The telcos co-finance movies in the most conservative way the new rules allow. Many find the law ambiguous. Only Telefonica, “intends to be involved in some tasks” on its co-productions.

Free-to-air TV operators are still Spain’s key film financiers.

Among newest broadcasters, LaSexta has an estimated film obligation of $12.3 million for 2011. Web started off last year on the right foot, pre-buying TV rights to Spain’s biggest local 2010 hit, teen drama “Three Meters Above the Sky,” which near covered all its movie obligation for May-December.

The Imagina/Televisa-owned broadcaster is now involved in the “Meters” sequel, “Tengo ganas de ti.” In both cases, Sexta shares TV rights with DeAPlaneta broadcaster Antena 3.

Sharing rights is an effective option when the number of commercial films are limited in Spain.

Sexta will develop its own movies. “We’d like to invest in films budgeted around $4.5 million for primetime broadcast, preferably comedies,” says Sexta CEO Jose Miguel Contreras.

Sexta is weighing creating its own movie label, similar to MTV Films, and mulls the production of more experimental concepts, such as mockumentaries.

Mediaset Spain, owner of broadcaster Telecinco, last year acquired Prisa’s newbie network Cuatro, whose 3% film investment obligations it has assumed.

Spain’s biggest film production house, Telecinco Cinema manages a $29 million movie spend from its core net plus near $11.8 million from Cuatro.

“Cuatro will be a stable Spanish movie window for us,” says Telecinco Cinema CEO Ghislain Barrois, who plans to produce $2.2 million genre pics for primetime.

Mediaset Spain’s also involved in bigger-budget titles including Daniel Monzon’s $10 million action-thriller “El nino” and “Tad, the Lost Explorer.”

Financing all 2010’s top-five Spanish B.O. hits, Antena 3 Films, net’s movie production arm, has a $27.3 million obligation for 2011. It’s co-producing high-profile projects, including Juan Jose Campanella’s $15 million 3D toon pic “Foosball” and Rodrigo Cortes’ Robert De Niro starrer “Red Lights.”

Pubcaster RTVE, which airs 90% of Spanish films broadcast on free-to-air TV, handles an estimated $45.1 million investment in features, having pre-bought titles including Pedro Almodovar’s “The Skin I Live In.”

By law, channels with 70% of broadcast time dedicated to one TV genre, can spend all 5% of their revenues on that product. Instances include pay TV channels such as Sony’s AXN, Cosmopolitan or Disney.

“The new law expands our investment possibilities,” says Juan Maria Romeu, general manager at Sony Pictures Television Intl. Networks Iberia, which has invested in “Tad.”

“The law brings new companies into film financing, but diminishes the contributions of the rest,” says Gonzalo Salazar-Simpson, prexy of AEC, who estimates a 25% drop in film investment obligations compared with previous regs — a blow for film producers.The increase in financial partners, however, “will contribute to less but more ambitious film projects, budgeted north of $5.8 million, aimed at a bigger market,” he says.

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