Ministry agrees to settle debts

The government’s cuts to film funding are so deep that there is no longer any money to pay off the debts it has already run up with producers. The National Cinema Fund has been reduced by 20 percent to 39.28 million euros for 2013 — nowhere near the 56 million euros the Ministry of Education, Culture and Sport calculates that it owes companies for films released in 2011.

But now, following a meeting with producers this week, Secretary of State for Culture José María Lassalle has committed the government to paying these debts with the industry — not just for films released in 2011 but for all films currently in production.

The debts in questions relate to amortization aid, which depends upon box office performance and is payable two years after the release of the film. The 2013 budget is therefore used to pay debts relating to movies released in 2011.

There are two types of amortization aid: general aid — which takes into account factors such as the number of cinemagoers who see the film, the amount of legal internet downloads, sales and the film’s presence at festivals — and complementary aid, which relates to qualitative aspects such as the number of prizes it wins, the participation of women in the production, the involvement of a new director, and so on.

The suffering in the film industry would be enormous,” says Agustín Almodóvar

The most a film can receive is 1.5 million euros — 1.2 million euros of general aid plus 300,000 in complementary aid. Producers can also apply for advanced aid, which is granted before a film is shot, according to the nature of the script, cast and crew.

Any delay in repaying these debts could have grave consequences for an industry that has already been battered by a huge rise in the value-added tax rate applicable for cinema tickets, which has gone up from eight to 21 percent.

“The suffering in the film industry would be enormous because it would cause terrible legal and financial insecurity,” warned Agustín Almodóvar, producer and brother of director Pedro before this week’s meeting. His concerns stem from the fact that his brother’s film The Skin I Live In, released in September 2011, is one of those affected, but also because non-payment would mean that the industry will lose its ability to negotiate with banks and financial guarantors.

However, the statement issued jointly by the ministry and the FAPAE producers association after the meeting did not indicate where the money to pay the debts would come from. One solution studied would be to increase the Film Protection Fund in the 2013 budget, although that would require approval by the Treasury.

At the meeting, producers and the government also agreed to amend the current financing model for the industry. A committee of government officials and industry figures will work on a new plan that will be delivered to Congress on May 31 next year.