Catalonia: Budget battles define biz

Produced by Barcelona-based Nostromo Pictures, Rodrigo Cortes’ “Red Lights,” with Robert De Niro limning a legendary blind psychic, is one of Catalonia’s buzzed-about releases.

For Catalan pic producers, however, “Lights” could also be a new production model.

During the past decade, Catalonia, in Spain’s richer northeast, built the biggest regional film industry in Southern Europe. Barcelona, its capital, became a byword for genre production. Film execs from the rest of Europe took its diversified public subsidy system as a model for state funding.

But Catalonia’s nationalist center-right government, in power after Nov. 28 elections, inherited a double-edged legacy: On the one hand, a clutch of market-driven Catalan films, which had been backed to the hilt by its predecessor — on the other, a €7 billion ($9.5 billion) deficit.

The good news is that the latest Catalan film, Kike Maillo’s “Eva,” world preemed at Venice and opens this week’s Sitges Festival. Agusti Villaronga’s “Black Bread” won nine Spanish Academy Goyas in February.

But even Catalonia has not been able to avoid fallout from large nationwide problems: endemic piracy, plunging ad revs at Spain’s broadcasters, one of the local movie industry’s principal financiers, and an imploding DVD market. Subsidies — both national and Catalan — are tougher to access.

But Catalonia has reacted. There are still high-end movies bubbling under in development: Bigas Luna’s $12.6 million “Second Origin” and Oriol Paulo’s “The Body,” set up at Rodar y Rodar. Jaume Balaguero’s $9 million “Sleep Tight” premiered at Austin’s Fantastic Fest.

Budgets, however, are polarizing fast.

“You can make a ($2 million) movie or jump to a $5 million-$7 million English-language pic with different market ambitions,” says Miguel Angel Faura, at Roxbury, which is co-producing Antonio Trashorras’ $2.2 million “Blind Alley” and Gonzalo Lopez Gallego’s $2 million “Inertia.”

Escandalo Films’ Sergi Casamitjana agrees.

“We’re not interested in midrange products. Either you go international, as on ‘Eva,’ or you make ‘Puzzled Love’ with $150,000,” he says.

“Puzzled” is 13-part love story helmed by students at Barcelona’s Escac film school; Wild Bunch has sold “Eva” worldwide, including to the Weinstein Co. for North America for a seven-figure sum.

Apart from reducing their budgets, many producers are going abroad, testing the waters of international co-productions.

And they have Catalan government backing: “We aim to promote international collaboration, in creativity, financing, production and distribution and exhibition platforms,” says Felix Riera, director of the Catalan Institute for Cultural Industries.

Producers are also looking to offset risk. “We’re now mainly interested in strategic agreements with studios,” says Xavier Parache, at Escandalo, which is releasing “Eva” in Spain via Paramount.

Caution is priming multipart co-productions: Javier Ruiz Caldera’s “Ghost Graduation” teams Mod Producciones, Ikiru Films, Fox Intl. Pictures, Alicante shingle Ciudadano Ciskul and Caldera’s label Think Tank. An armada of TV operators share broadcast rights.

“Combining strengths, we can make much more powerful productions and minimize risk,” says Ikiru’s Edmon Roch.

Says Joaquin Padro at Rodar y Rodar, “We’re comfortable making films between $4 million and $7 million in Spanish, in English from roughly $10 million upward.” But, he adds, “You need a lot of financing elements: Television is very conservative.” Rodar’s production slate includes psychological horror-thriller “PX3D,” Spain’s first 3D genre film.

Clearly though, the Catalan industry is certainly in flux.

“It looks like our industry will be forced to make adjustments,” says Riera — “fewer titles, lower production costs and a consolidation of international co-production, while it also rethinks in positive terms the decisive role of distributors and exhibition.”

But Catalan talent — especially genre talent — is assiduously courted by sales agents: Little wonder when titles such as “Orphanage,” “Agnosia” and “Eva” rack up multimillion-dollar international sales.

Moreover, a younger cosmopolitan Catalan generation harbors large ambitions.

“If we talk about thrillers or horror, Spanish helmers are all the rage,” says Nostromo’s Adrian Guerra. But the “division between younger, more commercially driven producers and more traditional, culturally driven producers is getting bigger.”

Zentropa Intl. Spain producer David Matamoros agrees. Most of the 2011 Escac final year feature projects “could be made for less than $2 million,” he says. “But the students aren’t talking about getting to festivals. They want to appeal to bigger audiences, and their films could take place as easily in Lithuania (where production costs are cheaper) as Barcelona.”

Rodar y Rodar is prepping Mar Targarona’s “Carmen Amaya,” about the Barcelona-raised flamenco legend.

Increasingly, however, Catalan films are often least Catalan in locale.

“The Stoning of Saint Steven,” in post at Luis Minarro’s Eddie Saeta, has French dialogue; Eddie Saeta’s “El muerto y ser feliz,” from Javier Rebollo, takes place in Argentina.

“Lights” is set in the U.S.; “Animals,” an Escandalo production, takes place in a Catalan village, but at an American school.