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Spain Gets New Industry Skewed Public Incentive System

Subsidies prize movies with TV, distributor, sales agent backing

MADRID – In the first potentially game-changing regulatory overhaul since 1994, Spain’s interim government has unveiled a new subsidy system that looks likely to facilitate public financing for a small score-or-more of movie projects which has snagged private-sector finance: TV funding, distribution P&A or international sales deals.

At least in domestic market terms, new system – which was rushed onto the statue books before Dec. 20 general elections – catches the Spanish film industry on a roll having posted market shares of 25% in 2014 and, boosted by Telecinco Cinema co-produced “Spanish Affair 2,” 19% through mid-December in 2015, per producers’ assn. Fapae.

Now the new system has sparked fierce debate among the production sector as to whether it is a boon or a bane. Legislation marks a transition from a system where producers made a movie because they could to one where they need to prove they are making movies people want to see and that they have a meaningful economic/cultural impact, the new regs’ supporters argue.

On the downside – or at least that’s what smaller auteur-ist producers contend – system’s new industrial criteria threatens to penalize Spanish producers of smaller auteur movies, and limit their ability to step up to the table as minority co-producers – of Latin American movies, for example.

The big question– and here near everyone agrees – is whether the government will endow the new system with more funding for all projects that are eligible for new subsidies if the current 2016 allocation of €30 million ($33 million) is found to be insufficient, as many producers suggest it will be.

Published Dec. 23 in Spain’s Official State Bulletin, new regulation fleshes out a new May 14 film decree-law which phased out 21-year-old box-office-tabbed incentives triggered by movies’ punching a minimum 35,000 ticket sales at cinema theaters.

Now, based on a 100-points system, main Spanish subsidies of up to €1.3 million ($1.54 million) will be paid to movies costing €1.3 million-plus based on their perceived industry value. Key considerations and maximum points include: the B.O. in Spain (up to 8 points), international sales (7) and fest presence (7) in the last four years of movies’ produced by an applying producer; annual B.O. of project’s distributor in Spain (9); sales’ agents’ minimum guarantee or sales on the project (8 points); project’s Spanish TV finance (15); and shooting in Spain (20). Movies seeking subsidies need 35% of finance in place before applying.

“Before, anyone could access subsidies. If the film wasn’t of any interest for the market, producers could find a way to meet the minimum admissions required to get the subsidy so it proved an inefficient system,” said Adrian Guerra, producer of Sundance hit “Buried” and “Palm Trees in the Snow” (pictured). Co-produced with Atresmedia Cine, broadcaster Atresmedia’s film arm, “Palm Trees” bowed Dec. 25 to a first-weekend €3.0 million ($3.3 million) in Spain.

Guerra added: “Now, to get a subsidy, business players have to validate your movie, it will be seen and have meaningful economic impact in Spain.”

As Guerra pointed out, the new system establishes a points system for artier films budgeted under €1.8 million ($2.0 million), which places largest emphasis on a producer or director’s festival track-record as a feature or short film maker.

Regarding international co-production, subsidies are still available for English-language movies. But producers, as in much of the world, will now have to wait for a subsidy award round until committing to an international co-production.

The big question remains whether total subsidy coin – said to be just €30 million ($33 million) for 2016 – will be enough to finance all projects which qualify for subsidies as well as a secondary subsidy scheme targeting art-films, new director movies. Many Spanish producers doubt it, arguing projects backed by Spain’s biggest commercial broadcasters via film arms Telecinco Cinema and Atresmedia Cine, already Spanish film industry drivers, will dominate subsidy awards.

The new legislation “broadens even more the gulf between a supposedly industrial/commercial cinema and a supposedly cultural one,” ran a statement from Spain’s Union de Cineastas, grouping small indie producers.

On one other thing everybody agrees: the system will have to be at least tweaked once the industry sees how it functions or builds problems.

“2016 will be an interesting year to see how people put together projects to qualify for subsidies,” said Guerra.

“If you’re a producer that has seen commercial success, and has a good working relationship with big broadcaster film arms, this is a good law. If you’re a young producer or want to make a slate of four-to-five films a year, this is a very bad law indeed,” a less optimistic producer sustained.

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