German Production Services Firms Call for $400M Coronavirus Rescue Fund

2012-05 BKLOT Babelsberg Inglorious Basterds Set H
Francois Duhamel/Universal/Courtesy of Studio Babelsberg AG

The Nazi propganda film that featured prominently in Quentin Tarantino's "Inglorious Basterds," starring Brad Pitt (at right), was shot at Babelsberg under the watchful eye of Joseph Goebbels.

Studio operators, tech rental and VFX companies are not covered under Germany's recent bailout funding programs for companies hit by the pandemic.

Germany's association of film and TV technical operations has called for the creation of a $414 million (€375 million) coronavirus crisis fund to prevent bankruptcies and mass layoffs among the country's studio operators, camera and equipment rental and visual effects companies.

The German government, cultural organizations and networks have already begun helping sectors of the entertainment industry hit by the coronavirus epidemic, with measures targeted at supporting cinemas, distributors, producers and creatives.

But so far there have been no measures specifically for the technical service side of the industry, which employs around 15,000 people in more than 600 companies across Germany and accounts for more than $1.1 billion (€1 billion) in annual revenue.

On Friday, the VTTF, the association representing the interests of technical professionals in the film and television industry in Germany, called for the creation of a crisis fund to help its members pay salaries, cover the rent and, in general, keep the lights on until the current epidemic is over.

The VTTF estimates that its members expect revenue losses of at least 50 percent as a result of the coronavirus, with three-quarters of that locked up in fixed costs, such as rents for now-empty studio space or salaries for employees who can not work because of nationwide lockdown orders. Based on the €1 billion revenue figure for the industry as a whole, the VTTF calculates that a €375 million crisis fund is needed to stave off disaster.

The group is calling for a "quick, un-bureaucratic" solution, that will allow funds to be paid out to companies before time runs out.

The VTTF proposes a model whereby companies receive a monthly crisis payment based on a proportion of their average annual revenue over the past three years, current fixed costs and lost revenues due to contracted productions that have been cancelled or postponed.

The German government has already taken measures to give small and mid-sized companies access to “unlimited financing” via loans from Germany's national development bank KfW. But the VTTF warns that adding to the debt burden of film and TV tech companies will do long-term damage to the industry, which is working with thin profit margins and a “thin equity base.” More government loans will mean “especially dynamic and innovative companies will not survive the current crisis.”   

Instead, the group argues that state loan guarantees could be used to reduce the creditworthiness requirements for tech companies to secure bank loans and other lines of credit.