Spain Moves Ahead With Modified Film Subsidy Law

Spanish Affair Still - H 2014
Pedro Alborenoz

Spanish Affair Still - H 2014

For U.S. companies, this could mean financially sound Spanish co-production partners with muscle to back projects.

After three years of clamoring for a new financing model, Spain’s movie industry was celebrating Friday after the government approved a decree to restructure film subsidies so that producers will know how much aid they will receive before production begins.

Unlike the existing system that provided aid based on commercial success and came two or more years after a film’s release, the new law, set to receive the final green light by parliament next month, offers financial security in advance.

For U.S. film companies, this could mean financially sound Spanish co-production partners with muscle to back projects.

“This system will allow the co-existence of different productions from the smallest to the most commercial with big budgets, a fact that reflects the plurality of our film industry,” said Ramon Colom, the president of the Spanish Producers Cofederation FAPAE. "There are still pending questions like the increase in fiscal incentives to bring us in line with other industries, but this is a separate subject. Today we are celebrating."

The Spanish Film Protection Fund budget used for film subsidies for this year will be $60 million (€52.5 million), with the government greenlighting an $18 million (€16 million) extraordinary credit to satisfy back payments to producers dating back to 2014. The fund is set to grow over the next three years, with 2016 kicking off the new financing model with $39.6 million (€35 million) earmarked for amortization, $34 million (€30 million) for new subsidies and $11.3 million (€10 million) for other aid.

For the first time, marketing and promotion plans will be considered as part of the overall package for assessing a film’s viability, along with financing and distribution.

“The reform introduces criteria that prioritize budgets that plan on advertising and promotion, which has always been a weak spot in our industry according to the European Audiovisual Observatory,” said Film Institute Director Lorena Gonzalez.

The Spanish industry has long complained that domestic films can’t compete with the massive promotion of Hollywood films, but last year’s highest grossing box office success was the Spanish comedy A Spanish Affair, backed by the hefty promotional machine of Mediaset Spain.  

The law’s approval comes 10 days before local elections and during the same week as Spain’s Fiesta de Cine, which usually boosts ticket sales. This year’s edition saw 600,000 fewer tickets sold due primarily to Champion’s League semifinal matches and the onset of warm spring weather.