Soft money in hard times
Film funds, tax rebates pick up financing slack for indie productionsWith equity and bank loans melting away, producers from Burbank to Berlin are discovering that the bedrock of indie film financing is soft money.
Just ask Oscar winner Roman Polanski, who this week picked up nearly $6 million in subsidy cash from Germany for his in-production thriller "The Ghost," starring Ewan McGregor and Pierce Brosnan. Or, on the other end of budget and taste spectrum, the pulpy Finnish sci-fi feature "Iron Sky," which is getting nearly half of its $5.4 million budget from soft-money sources in Finland (Finnish Film Fund) and Germany (Hessen Film Invest).
This year's In Competition lineup at Cannes is jam-packed with features that would have been impossible to make without European state subsidies, from the $11 million in German soft money backing Quentin Tarantino's "Inglourious Basterds" to the U.K. Film Council cash and tax rebates that helped Jane Campion's "Bright Star" and Andrea Arnold's "Fish Tank" to the finish line. The multiterritory subsidy structures of Lars von Trier's "Antichrist" and Ken Loach's "Looking for Eric" resemble a mini European Union.
Loach told THR that the long list of backers from throughout Europe was "almost comical" but said he left that side of it to his longtime producer, Rebecca O'Brien.
The importance of state subsidies depends a lot on what side of the pond you're on. While the indie world in the U.S. has been relying on soft money from local and state governments for some time, producers caution that it will never singlehandedly enable a U.S.-based production.
"Soft money will let you push your budget up by 15% or 20%, which is nice," one U.S. producer said. "But even with all the soft money in the world, without equity and mezzanine and more primary forms of financing, you're never going to get a movie made."
That contrasts with Europe, where producers often get 50% or more of their budget from soft-money sources. By structuring multiterritory co-productions and dipping into several national subsidy pots, experienced Euro producers such as Denmark's Zentropa, the Netherlands' Kasander Film Co. or Germany's Egoli Tossell have been able to back projects with significant budgets and A-level casts.
"For the really-big-budget projects, European subsidies will never be enough to replace equity or bank gap financing, but for projects from $20 million up to maybe $50 million, it can be interesting," said Kirsten Niehuus, head of film subsidies at the Medienboard Berlin-Brandenburg, which backed In Competition entries "The White Ribbon" and "Basterds."
"We are getting a lot of American producers knocking at our door these days," she added. "Because U.S. financing relies so much on banking and other equity models, getting any sort of budget together these days is really hard. European soft money suddenly looks like a much safer bet."
Steven Zeitchik contributed to this report.