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Studio Babelsberg Braces for $3 Million Annual Loss

Germany's Chancellor Angela Merkel recently visited the set of Steven Spielberg's untitled Cold War drama, starring Tom Hanks, at Berlin’s Glienicke Bridge.

BERLIN — Despite major projects this year, including Steven Spielberg’s latest Cold War drama and the “Point Break” remake, Germany’s Studio Babelsberg is expecting a €2.5 million ($3 million) loss for 2014.

In an interview with German financial newspaper Handelsblatt published on Friday, Studio Babelsberg president and CEO Charlie Woebcken said he hoped the studio would survive next year.

Speaking to Variety on Monday, however, the studio’s vice president and chief operating officer, Christoph Fisser, played down the comments, saying a number of developments since Woebcken’s interview — which actually took place some 10 days prior to its publication — had resulted in an improved climate going into the new year.

“We are optimistic and feeling good about next year,” Fisser said.

While the studio is forecasting 2014 revenue of €50 million ($61.1 million), down from €81.9 million ($100.1 million) last year, Fisser said Babelsberg was in negotiations with a number of major Hollywood productions to shoot at the studio next year.

Studio Babelsberg co-produced and oversaw production services for a number of high-profile pics this year, including Spielberg’s untitled Cold War drama starring Tom Hanks, Ericson Core’s $100 million “Point Break” remake and Francis Lawrence’s “The Hunger Games: Mockingjay,” but they all shot on location and not at the studio, which generates more revenue for the company.

Indeed, the studio has regularly fluctuated between annual losses and profits over the years, depending upon the number of international co-productions it had in any given year. In 2013, for example, the studio posted a profit of €843,000 ($1.03 million) after suffering a hefty loss of €7.2 million ($8.8 million) the year before, which in turn followed a 2011 profit of €356,000 ($435,362). Due to the studio’s somewhat erratic business operations and difficulties in maintaining stable revenue levels, the company is planning to delist from the stock market in 2016.

Studio Babelsberg execs have also been lobbying hard against plans by the German government to cut federal film subsidies by €10 million ($12.2 million) next year — a move that could have hit the studio particularly hard. However, the Bundesrat, one of the two houses of Germany’s parliament, voted on Friday to increase the German Federal Film Fund (DFFF) back to its current level of €60 million ($73.4 million) a year as of 2016.

In addition, German economic affairs minister Sigmar Gabriel recently assured the country’s film industry that his ministry would free up an additional $12.2 million for film support next year, although whether that goes directly back to the DFFF or to a separate film financing vehicle remains to be seen.

The DFFF has been instrumental for Studio Babelsberg in luring major international productions to Germany, including Spielberg’s film, which recently attracted Chancellor Angela Merkel to the pic’s set at Berlin’s famed Glienicke Bridge (which once connected West Berlin with communist East Germany, serving as the ideal place for American and Soviet forces to swap captured spies during the Cold War).

This year’s other major productions also benefited from DFFF funding: ”Point Break” received $4.4 million in support and “Mockingjay” secured nearly $5 million. Babelsberg co-produced “Mockingjay” and handled production services in Germany, and also secured DFFF funding for the film. “Mockingjay” shot in and around Berlin this spring after finding perfect sites for the post-apocalyptic setting of Panem, including the city’s historic former Tempelhof Airport as well as picturesque industrial ruins.

Nearly 30 international co-productions have benefited from DFFF coin this year, including Eran Creevy’s high-speed actioner “Autobahn,” starring Nicholas Hoult, with €2.58 million ($3.15 million).

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