New funding help for EU prodcos could become a reality

Given the jittery global economy, now doesn't seem to be the best time to broach the subject of creating a European production fund. And wisely, no one is talking about it.
March 1, 2003

Given the jittery global economy, now doesn’t seem to be the best time to broach the subject of creating a European production fund. And wisely, no one is talking about it.

But listen carefully and you’ll hear whispers (hailing mostly from France) about the establishment of an EU-administered subsidy that would help producers of member countries meet budget requirements.

Last month, French audio-visual professionals met with their EU ambassador for informal discussions about the framework for such a fund. While details are sketchy at this stage, the chances that some kind of funding mechanism will be instituted in the next couple of years aren’t as slim as one might think. It’s on the EU agenda to develop a policy by 2004 that will determine how Europe’s cultural industries should function vis a vis its trade laws, and France’s fund proponents want it to address the support of film and TV production.

Local support levels in the EU member countries are all over the map, with French prodcos getting more than a third of their budgets from subsidies and Spanish producers getting next to nothing. As a political entity purporting to serve the interests of its populace, the EU needs to establish a consistent policy that will preserve the cultural diversity of its member countries, which isn’t currently happening, argues Christian Davin, president of Paris, France-based Alphanim.

There will be roadblocks hindering attempts to harmonize Europe’s approach to funding film and TV production. One issue is whether or not the EU should treat culture as separate from other commercial issues. Undoubtedly, those who view culture as a business will bristle at the mention of subsidies. But from the EU’s perspective, it might be worth incurring the free traders’ wrath.

If the current downturn has taught the production community anything, it’s that government and trade support is essential to maintaining long-term health. Consider the plight of independent U.K. animation producers, who are scrambling to scrape together minimum financing for their projects since the British government sealed the sale-and-leaseback loophole last April. In lieu of support, small indies must give away much of the equity in their projects just to get them made, says Millimages U.K. chairman Jonathan Peel. As chairman of the PACT (Producers Alliance for Cinema and Television) animation policy group, Peel will be lobbying for the creation of a fund to which producers could mortgage the rights of their production, which would be returned once the loan was paid off.

Perhaps more preferable is the French system, the principles of which Alphanim’s Davin would like to see instituted continent-wide. In France, funding is raised through an indirect tax on the sale of audio-visual products such as movie tickets and DVDs, and then adminstered to producers by the Centre National de la Cinématographie (CNC). Additionally, French broadcasters are required to spend about 16% of their net revenues on new programming, two-thirds of which must be produced by independent French studios. Together, these funding streams contribute roughly 35% of French producers’ budgets, says Davin. The fact that the amounts that industry and tax payers must contribute to the country’s fund rarely change is the key to this system, he claims. The figures are part of French laws, which haven’t been altered significantly since the French government opened the TV industry to privatization in the late 1980s. As such, the French funding system is not as vulnerable as others.

Implementing such a system continent-wide may seem like a pipe dream considering the move towards liberalized trade over the last decade. But radical thinking is required to sustain the long-term health of the TV industry in Europe. It will take a coalition of the willing…or the shilling, depending on your vantage point.

About The Author


Brand Menu