Cross Creek Pictures prexy Brian Oliver has some well-earned advice for producers attending his Sept. 22 European Co-Productions panel during the Zurich Film Festival: “Having the right attorneys on board early, to navigate the muddy waters of these co-productions and find partners who have a good relationship with their local government, is very important,” says Oliver. “Find a partner who’s done recent co-productions in the territory you’re working in, and make sure their co-producer’s experience was good.”
Oliver is among many industryites participating in the Film Finance Forum at Zurich presented by Winston Baker in association with Variety on Sept. 22.
He learned these lessons by partnering with U.S./U.K.-based Exclusive Media to co-fund Ron Howard’s “Rush.” Produced in association with Imagine Entertainment, Working Title Films, Brian Grazer and Revolution Films, the financiers set up Rush Films Ltd. as the Brit half of the U.K.-German project, teaming with an entity formed by Berlin-based financier Egoli Tossell Film and Cologne-based producer Action Concept. Applying the European Convention on Cinematographic Co-Production formula for an 80-20 U.K.-Germany funding split, they snagged government certificates allowing them to obtain around $9 million in subsidies and tax credits from both countries, a sizeable chunk of the film’s expected $53 million-$54 million budget.
While they may seem like passes to easy money, the certificates often have more in common with Willy Wonka’s golden tickets — the first step into a labyrinth of local subsidy boards and a constant budget balancing act. Germany in particular can be a minefield of uncertainty, according to Oliver and fellow panelist Matthias Braun, the Berlin-based Lacore partner who handled legal issues for the German producers.
Before raising a full budget, foreign producers rely on local producers to pitch films to subsidy boards that meet just a few times a year. “You have to go in a bit blind (as partners) tell you, ‘I think I can get this,’ ” Oliver says. “They’re giving you information you’re relying on to get your bank loan, and if that info is wrong, it can put you in a serious situation.”
“Rush” received one national and two regional subsidies, plus a national tax credit, but Braun says that due to the large amounts it received, producers had to spend a higher-than-normal 250% of each subsidy in the region it came from. “If you don’t, you have to partly pay it back” and face a budget shortfall, he says
Local producers also ensure the right amount is spent in each region — an accounting high-wire act that often leads to spending imbalances. Oliver hopes some extra German shooting days will help fix the budget formula for “Rush.”
Despite its pitfalls, “Rush” is having an easier journey than some projects. Braun worked on the Canadian-German co-production “A Dangerous Method,” which received around half its hoped-for German subsidies, and waited two years after its delivery for final audit results to arrive.
Producers also need one more thing. “I guess you’ve gotta have faith,” Oliver concludes.
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