German film board in spat over levy

Theaters up in arms over annual subsidy

COLOGNE, Germany -- Germany's federal film board, the FFA, and the country's main exhibitor's association are on a collision course over a levy German theaters pay to the board to subsidize German productions.

German theaters hand over some 17 million euros ($22.5 million) annually to the FFA, paying between 1.8% and 2.3% of their boxoffice revenue.

The levy has always been contentious among exhibitors. As a new film funding law works its way through Germany's upper house of parliament, German theaters are up in arms.

Some 20 cinema chains, including leading multiplex operator Cinestar, sued the FFA earlier this year, claiming the levy was unfair. The group continues to pay the levy but with the caveat that if it wins the case, the money will be returned to them.

Now exhibitor association HDF, which represents some 75% of German theaters, has called on its members to follow suit. HDF member will vote on the measure Jan. 14.

The move is a major blow to the German film board. A decision on the Cinestar suit is unlikely before next spring at the earliest. Until then, the FFA cannot spend the money it receives from the contentious exhibitors.

This week, the film board struck back, threatening HDF members that a vote against the levy could have severe consequences. The FFA is suggesting it could cut subsidies to HDF theaters and may move to exclude HDF members from the FFA's board when it is appointed at the beginning of the year.

Now it is a waiting game. Germany's senate, the Bundesrat, is expected to pass the new film funding law before the end of the year. The FFA says it will wait to see how the exhibitors' vote goes in January before taking action. The fight is far from over and is unlikely to cool off until the judges have their say.