European Commission rules against Ciudad de la Luz

Decision raises doubt about mega-studio future

BRUSSELS The Spanish film studio that hosted Bruce Willis-starrer “The Cold Light of Day,” among other pics, will be forced to pay back €265 million ($345 million) in public subsidy after a European Commission probe found the coin broke competition rules.

The Commission ruled Tuesday that payments to the Ciudad de la Luz studio complex near Alicante were not provided on normal market terms and massively distorted competition between Euro studios.

“Spain’s cinema sector is dynamic and competitive. Not only is there no need to spend public money to finance a new operator but, above all, this penalizes the existing players and potential new entrants who have to operate without state funding,” said competition regulator Joaquin Almunia.

Francis Ford Coppola’s “Tetro,” Gallic tentpole “Asterix at the Olympic Games,” Juan Antonio Bayonas’ “The Impossible,” starring Naomi Watts and Ewan McGregor, and Nia Vardalos vehicle “My Life in Ruins,” all shot at the state-of-the art studio, which opened in 2005.

The Commission began investigating Ciudad in 2008 following complaints from rival operators across the continent that its owner, the Valencia regional government, was illegally subsidizing the project with public coin.

The Spanish authorities initially argued that the money was not a subsidy since the private sector would have invested on the same terms. However, the Commission probe found that no market investor would have fully funded the studio, far from major production centers in Madrid and Barcelona, on the basis of its business plan.

With no hope of a private sector buyer in sight, it is questionable just how Ciudad can pay back the $345 million to the Valencia government.

Ciudad is already in litigation with Aguamarga, the company that ran the studios until filing for bankruptcy protection in January, alleging Ciudad had not paid it since August 2009.

There is also a question mark over the future of rebates offered by the Valencia authorities to shoot at Ciudad. A Commission proposal this March suggested lower rebate caps for non-EU shoots in Europe.

Valencia is itself teetering toward bankruptcy. Late last year, Spain’s central Madrid government was forced to pay $160 million owed by the Valencia region to Deutsche Bank.

John Hopewell in Madrid contributed to this report.

Popular on Variety

More Film

  • Demi Moore Corporate Animals

    Demi Moore Teases Upcoming Memoir 'Inside Out,' Talks 'Corporate Animals' Team Bonding

    As Demi Moore gears up for the Sept. 24 release of her autobiography “Inside Out,” the actress says she feels like a weight has been lifted. “Even the stuff that I may have been nervous about is completely lifting…because it’s a process,” Moore told Variety at the premiere of her upcoming film “Corporate Animals” at [...]

  • Bloodline

    Film Review: 'Bloodline'

    The manic, filter-free, all-id persona Seann William Scott embodied in the roles that first brought him to attention nearly a couple decades ago — notably teen comedies “Road Trip,” “Dude, Where’s My Car?” and the “American Pie” series — did something inspired with a familiar type. The alpha frat-bro character is usually a villain, or [...]

  • Jack Gilardi, Longtime ICM Partners Agent,

    Jack Gilardi, Longtime ICM Partners Agent, Dies at 88

    Jack Gilardi, a longtime ICM Partners agent who represented such stars as Burt Reynolds, Sylvester Stallone, Jerry Lewis, Charlton Heston and Shirley MacLaine, died Thursday at his home in Los Angeles. He was 88. Gilardi was known for his gentlemanly style, love of the Los Angeles Dodgers and his skill at representing top actors. He [...]

  • Depeche Mode - Dave GahanLes Vieilles

    Depeche Mode Documentary Gets One-Night Theatrical Release

    Depeche Mode has reunited with the group’s long-time filmographer, Anton Corbjn, for a combination documentary/concert film, “Spirits in the Forest,” which Trafalgar Releasing has announced it will put on approximately 2400 screens worldwide for one night Nov. 21. The film documents performance footage from the Berlin dates of Depeche Mode’s 115-gig Global Spirit Tour of [...]

  • Promare

    Film Review: 'Promare'

    Anime maniacs have been waiting for this day: Eight years ago, Hiroyuki Imaishi co-founded Studio Trigger with the goal of one day hatching a feature as wild and innovative as his TV series “Gurren Lagann” and “Kill la Kill.” Now he has. Every bit as loud and ambitious as one might expect from a visual [...]

  • Paul Dano

    Paul Dano in Talks to Join Jane Campion's 'The Power of the Dog' (EXCLUSIVE)

    Paul Dano is in negotiations to join Benedict Cumberbatch in Netflix and Jane Campion’s “The Power of the Dog.” Netflix acquired the film earlier this summer from See-Saw Films’ in-house sales arm Cross City Films. Variety first reported on the project earlier this month and Cross City Films launched sales at the Cannes Film Festival. [...]

  • The Sleepwalkers

    Toronto Film Review: 'The Sleepwalkers'

    Argentine writer-director Paula Hernández likes to explore what happens when characters from different worlds are thrown together. In her latest, “The Sleepwalkers,” which world-premiered in Toronto’s Platform competition before moving on to San Sebastian, the focus is on a discontented mother and her sullen, newly pubescent teen daughter, as they spend a New Year’s holiday [...]

More From Our Brands

Access exclusive content