Methodology, Skills and Professional Benefits Participants Participants' Comments MEDICI Coordinator and Head of Studies «The 12 Labours of Hercules» Report of the Reports – Workshops 1 to 4

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Fifth Workshop – Tuesday 29 September to Thursday 1 October 2015 in Santpoort, Netherlands

Module 2 – Co-productions: Financing issues: for the producers, for the funds

(specific programmes, decision timeline, recoupment, financial co-production)

Introduction

Majority co-productions are considered as national productions and are financed at the same level. The financing of minority ones is a real challenge for the funds.

In other words:

Reflections on minority co-productions (and other stories)

Roberto Olla, CEO of Eurimages

Please also see Roberto Olla’s presentation (PDF)

Note: Some text below and financing plans are derived from Roberto Olla’s presentation (in italic). They are copied in this report for a better understanding of the discussion that took place within the group.

Are minority co-productions all-good?

“Tradition wants it that minority co-productions are beneficial for the national/local industry because they…

Minority co-production financing schemes

Share of Revenues

Depending on the type of financing raised, revenues can be shared:

But

Case Studies: Minority Co-productions

(Titles and names of directors and producers are intentionally left out)

CASE 1 – France 70%/Belgium 20%/Cambodia 10%

European Financial Magic

Co-production set-up

Co-production set-up

Financing Process:

France (70%) The French part of financing includes selective support from France, MEDIA grant, French share of the Eurimages support, a share of the world sales, financing from public French TV (obliged by law to finance feature films).
Belgium (20%)
  • The Belgian financing secured by the Belgian producer includes Belgian tax-shelter, Belgian share of the MG, Belgian share of the Eurimages support and Belgian producer’s own investment.
But
  • The only selective money in fact comes from Eurimages, raised by the French delegate producer.
  • Belgian tax-shelter is purely automatic.
  • The French producer in fact raised the MG without any involvement of the Belgian producer.
Cambodia (10%)
  • The Cambodian producer raised 6% of the budget, which involves MG, a chunk of the international pre-sales and 10% of the French TV rights in TV pre-sales.
But
  • The Cambodian share was – in fact – under 10% which is under the co-production requirement.
  • The certification authority decided to compensate for the missing 4% in the Cambodian financing through “real contribution based on the technical participation in the project”, which is different from in-kind investment. It was the first official French-Cambodian co-production and, bearing in mind the Cambodian context, this derogation was probably a political decision.
  • It seems unlikely that an MG can be found in Cambodia.

Share of revenues

According to the co-production treaty:

But

Conclusions:

CASE 2 – Denmark 70% / Norway 20% / Czech Republic 10%

Co-production set-up

Co-production set-up

Financing process:

Denmark (70%)
  • The Danish co-producer raised his/her financing from the Danish Film Institute, a Danish regional film fund, Danish TV and Nordic Film and TV fund, and was also the delegate producer in the Eurimages application.
Norway (20%)
  • The Norwegian producer raised funding from the Norwegian film Institute and local TV.
  • The Swedish Film Institute’s support was placed under the Norwegian umbrella because it made less than 10%.
Czech Republic (10%)
  • The Czech contribution included the Czech share of Eurimages, the Czech tax scheme and producer’s deferral.
But
  • The money from the only selective fund (Eurimages) was raised by the Danish delegate producer.
  • Czech tax scheme is purely automatic and involves no risk-taking, just as producer’s deferrals.

Share of Revenues

According to the European Convention on Cinematographic Co-production that was applied to this co-production, the world sales and revenues (except for the domestic territories) are supposed to be shared “pro rata”.

But

Conclusions

The Myth of Reciprocity (alias Quantity vs. Quality)

But

How to avoid reciprocity measures?

…beyond the Treaties

In other words:

Outcome of group discussion

What role do minority co-productions play in European countries?

Luxembourg Film Fund
They work differently depending on the size of the country and common language. As they didn’t have a potent cinematography before, their industry evolves and has been trained through minority co-productions.

Uruguayan Film Fund
In Uruguay, the industry is based on majority co-productions. Minority co-productions are possible only through reciprocity measures.

The Netherlands Film Fund
Co-production treaties need to include co-development as well, for the sake of establishing long-term relationships between the funds and industries.

Wallonia Brussels Federation
Treaties (except with Luxembourg), protect their projects from being taken over by bigger countries like France.

German Federal Film Board
Minority co-productions in Germany are mostly done through regional funds, and they consider them only as co-financing. However, they also have some co-development agreements (with Italy and very soon with Norway), because they find that it is important to collaborate from the beginning if they intend to make natural co-productions.

Austrian Film Institute
Things work well among comparable countries. For smaller countries with big neighbours that speak the same language it can be complicated. One never knows if it is an advantage or disadvantage. This can also lead to a problem of identifying national cinema. People mistake Austrian films for German films, Belgian films for French films and Canadian for American.

Ontario Media Development Corporation
They recently had a co-production with Ireland. It was an Irish director adapting a Canadian novel. However, despite all these elements audiences perceived this film as a US film because of the language. So the structure of financing is one thing, but the perspective of the audience is completely another thing when it comes to the identity of minority co-productions.

Eurimages
People are confusing financial co-productions – where both producers are making financial contribution through taking risks – with co-productions based only on tax credit(s) where the line producer is an accountant.

Concluding remarks

International co-productions, Development, Gender and quotas

Illustrations by Gijs van der Lelij

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