Play for the match

World Report: Spain

The Spanish government and its film sector can agree on one thing: Spain’s key mandate is to goose international financing — via pre-sales or co-production — as the country itself splutters.

Eaten away by endemic peer-to-peer piracy, DVD consumer sell-through spending plunged in 2010 to $294.5 million, near half 2006’s $537.3 million peak, Screen Digest estimates. At the same time, pay TV subscriptions languish — indeed, dominant pay box Digital Plus hovers at 1.7 million.

In May 2010, a General Audiovisual Communication Law cut the percentage of annual revenues that private broadcasters must invest in Spanish films from 5% to 3%.

“Producers can’t go on making films, then try selling them abroad,” says Lazona producer Gonzalo Salazar Simpson, prexy of lobby Asociacion Estatal de Cine. “We must drive into co-production and international pre-sales, even adapting film content to compete internationally.”

Many big upcoming Spanish pics are co-productions. “The industry and government agree: Spanish production’s future is to become as international as possible,” says Carlos Cuadros, director of Spain’s ICAA Film Institute.

Bucking Spain’s burgeoning austerity measures, on July 28 ICAA announced new grants of up to €600,000 ($864,000) per movie for international co-productions.

The ICAA has just closed a co-production treaty with Austria; others, with India, China and Israel, are in the works, says Cuadros.

In 2010, the Institute also backed producer Jose Maria Riba’s Different co-production forum in Paris, with others having taken place in Stockholm and Brazil.

One big question, then, is why international co-productions haven’t taken off.

Spain saw 50 international co-prods in 2009, 49 last year. Those numbers look similar for 2011.

“A film that goes into the international market to get money from other countries before it’s made has to have a certain budget and ambition for commercial success,” says Morena Films’ Juan Gordon, who’s co-producing Daniel Calparsoro’s Iraq war thriller “Invader” with Spain’s Vaca Films and France’s Mandarin Cinema.

But the number of significant Spanish films — budgeted above $3.6 million, with at least $1.1 million earmarked for P&A — has declined significantly, Gordon argues.

Fabia Buenaventura of Spain’s producers’ association Fapae notes that foreign tax breaks and incentives are more and more dependent of local spend, local cast and crew, which can also discourage international co-productions.

For Christophe Vidal, director of Paris-based bank Coficine-Natixis, there’s a knowledge gap. “If you’re in Barcelona, you don’t know whom to trust in France or the market. If in Germany, you don’t know which Spanish producers are suitable for your project.”

Producers lament two other problems: foreign TV markets and regulation.

From 2006-2010, Spain’s most popular co-production partners were France and Argentina.

French sales agents, who often also produce, sometimes pact for top Spanish genre fare. For example, Wild Bunch ran up $3 million in pre-sales on sci-fi pic “Eva,” says film’s producer Escandalo’s Sergi Casamitjana.

If a film is made in Barcelona, it may find better TV deals in France, says Roxbury Pictures’ Miguel Angel Faura.

“(Yet with) real co-productions where foreign partners take 20% or more equity, French producers only step in if local broadcasters are interested, but multiple projects compete for limited (TV) openings,” says Telecinco Cinema CEO Ghislain Barrois.

Spanish broadcasters only pre-buy co-productions from big name directors, styming co-productions with France, adds Antonio Perez of Spanish shingle Maestranza.

Or Spain can turn to Latin America.

“Latin America isn’t in crisis. Box office is rising, given the growth of new middle class,” says “Agora” producer Fernando Bovaira. “Though it’s easier said than done, we have to ramp up co-productions that somehow unite Latin American and Spanish markets.”

Some Argentine co-productions do that already: just this year, “Chinese Take-Away” took 18.2 million pesos ($4.3 million) in Argentina and €4 million ($5.9 million) in Spain; “The Man Next Door” nabbed $500,000 and $3 million, respectively.

“Culturally, Spain and Argentina are quite similar. A lot of Argentinean talent has settled in Spain; Argentina has a strong film industry; some Spaniards may even prefer Argentinean to Spanish films,” says Mariela Besuievsky of Tornasol, which co-produced “Chinese Take-Away.”

But according to a 2009 regulation, co-productions require at least $860,000 Spanish equity to access many subsidies, $2.2 million equity for producers to pull down e1 ($1.30) for every e3 they invest.

That discourages minority co-productions with Latin America, where budgets average only $800,000-$1.2 million, says Luis Angel Ramirez at Madrid-based Imval, a minority co-

producer of Alicia Sherson’s “The Future” and Veronica Chen’s “Mujer conejo.”

“Just when Latin America has increasingly sophisticated film support systems and bigger domestic markets, Spain risks losing its position as Latin America’s predominant European co-production partner,” Ramirez says.

The ICAA is mulling a modification of the $2.2 million co-prod requirement, Cuadros says.

Many of Spain’s more ambitious films can only be made as co-prods. Variety lists six high-profile examples:

  • Rodrigo Cortes’ “Red Lights,” toplining Robert De Niro and Sigourney Weaver, unites Versus, Antena 3 Films, L.A.’s Cindy Cowan Entertainment and Parlay Films.

  • Juan Carlos Fresnadillo’s Clive Owen starrer “Intruders” is produced by Apaches Entertainment, Antena 3 Films and Universal Pictures Intl.

  • France’s Ran Ent. put up minority equity on the Wild Bunch-sold and Escandalo-produced “Eva,” Kike Maillo’s robot melodrama that world-preemed in Venice.

  • Alex de la Iglesia’s latest, the Trivision-produced Salma Hayek starrer “As Luck Would Have It,” has 10% equity from France’s La Fabrique 2.

  • Tornasol and Argentina’s Haddock team on the Fox Intl. Prods.-sold “Everybody Has a Plan,” with Viggo Mortensen, now in post.

  • Juan Carlos Medina chiller “Insensibles” links Spain’s Roxbury Pictures and A Contracorriente, which distributes in Spain, France’s Les Films d’Antoine and Tobina Film, and Portugal’s Fado Filmes.

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