The French National Film Board, CNC, has unveiled a first series of proposals aimed at shaking up Gaul’s movie landscape and subsidy system.

The CNC initiative stems from an industry report conducted by Rene Bonnell (a former film and TV exec) released earlier this year and as well as a debate dubbed “Assises du Cinema” that erupted in the wake of a December 2012 opinion piece by Wild Bunch co-founder Vincent Maraval in newspaper Le Monde.

The piece argued that the subsidized French financing system was leading to inflated budgets, and claimed TV channels were concentrating their investments on bigger films, fueling the star system and encouraging the production of mediocre films with no real commercial potential.

The CNC is pushing for more transparency from every player involved in a film and is looking to audit producers and distributors not only on budgets but also on revenues and depreciation calculations.

“More transparency would encourage actors and producers to trust each other, take more risks and ultimately make better movies,” said Florence Gastaud, general manager of ARP (the authors, directors, producers’ guild).

The National Film Board, whose annual budget nears $1 billion, was itself the subject of a recent probe by the Court of Auditors.

CNC is also suggesting that film productions in which an actor’s paycheck exceeds a certain amount, such as 1 million euros ($1.6 million), would not (or to a lesser extent) be eligible for select subsidies such as the “supports account mechanism” (compte de soutient), which comprises revenues collected on ticket sales and saved for producers, co-producers and distributors to help them finance their next project. The same limitation would apply to films in which the paycheck of an above-the-line player represents over 50% of the budget.

The figure of 1 million euros is now being debated in France. Maraval is one of the rare industry figures claiming that the CNC should be even more restrictive. “This 1 million euros figure is absurd and defeats the whole purpose of rationalizing budgets. The biggest paycheck given to an actor, producer or distributor shouldn’t exceed 400,000 euros ($554,192) to receive public fundings,” Maraval told Variety. “If a salary exceeds 400,000 euros it means the movie is a commercial product, as is Dany Boon’s ‘Supercondriaque,’ in which case it doesn’t need public money.”

If passed, this measure would spark a big controversy in France since the CNC’s supports account mechanism can cover a large share of budgets. For instance, on Boon’s “Nothing to Declare,” Pathe received $12.2 million out of a budget of $30 million.

But as Gastaud points out, the idea behind these measures is to get producers to venture into diverse projects, think outside of the box in terms of casting and take more risks. Such a restriction would also give producers some leverage to negotiate lower stars’ salaries with agents.

In comparison with salaries of U.S. stars working on indie films, French actors are notoriously expensive although very few of them are bankable in international markets.

The CNC is also requesting French exhibitors to be more transparent with regards to revenues collected from concession items such as popcorn, soda and candy.

French film guilds are also asking that exhibitors allow distributors to show their trailers for free and lower the virtual print fee costs.

The burning issue that is not being addressed by the CNC is the role played by French TV channels, mainly TF1 and M6, in fueling the star system and cultivating a tradition for high-budgeted comedies which have little or no value outside of France.

The present system requires free-to-air broadcasters to invest 3.2% of their income into the co-production and acquisition of European films, of which 2.5% must go to French pics. But both TF1 and M6 increasingly dedicate their budgets to fewer but bigger-budgeted films.

Pay TV operation Canal Plus, on the other end, must put 12.5% of its income into Euro films, including 10% into French productions.

Maraval argues pre-financing obligations and investment quotas imposed on TV channels should be lower (or more directed towards post-investment) as it would force producers to make films with a better commercial potential: they would need to raise the financing from diverse sources ranging from private investors and international sales.

The exec cited the box office hit “9-Month Stretch” (pictured above), the $9.4 million black comedy directed by Albert Dupontel that was mainly financed by private investment firm Cinefrance (created by the bank Neuflize OBC). Pic turned out to be highly profitable for all the players involved, including its co-producer/distributor Wild Bunch, which took backend on the film. The movie grossed an estimated $35 million in France.

Industryites are poised to deliver feedback on CNC’s proposals on July 4. Gastaud said negotiations over the local window release schedule (notably the issue of shortening the window for SVOD from the current 36 months to 22 months) are still caught in a deadlock.