Spain's Film Law irks industry


CANNES -- Without a doubt, one of the hot topics in the Spanish industry these days is the proposed Film Law, a pet project of the Socialist government that has stirred controversy throughout the film and television industries.

Broadcasters decry the undue burden placed on them to finance the production sector. Exhibitors denounce the "unconstitutional" screen quota demanding they show Spanish films. Distributors criticize the government's interference in the free market.

And producers applaud the tax incentives created to attract private capital.

Looking to cobble together legislation that addresses the challenges of Spanish cinema, the Culture Ministry designed a draft that offers Spanish producers 18% tax breaks while maintaining a 25% screen quota for exhibitors and upping the broadcasters' obligatory investment in national cinema from 5% of overall revenue to 6%.

"No one is looking carefully at the steps they are taking. Investing more money is not the solution for improving Spanish cinema," said Alvaro Augustin, CEO of private channel Telecinco's film division. "Broadcasters are satisfying the law by investing millions of euros in films. If Spanish cinema isn't working or isn't traveling, take a look and see if it's the money being invested or maybe it's the films you're making."

The exhibitors lobby FECE contends the screen quota is unlawful.

The distributors via its lobby Fedicine -- in a rare agreement with exhibitors -- concur.

"In view of the new law, Fedicine asks for the Ministry to allow the free play of market forces, considering that the arrival of new technologies, piracy and globalization are changing the market for everyone: producers, distributors and exhibitors," Fedicine said after reviewing the government's bill.

Producers argue that cinema is art and is intrinsic to the fabric of the country and trumpet the government's plan to court private investment.

"FAPAE also congratulates it on the inclusion of new fiscal measures to offer incentives for private investment, allowing for the correct financing of our films and a return on our investment that stimulates the continuity of our industry," the Spanish producers federation FAPAE said in a statement.

But some producers aren't convinced the law is designed to help the industry make original films.

"If you're going to be able to raise funds based on tax breaks, it's to attract private capital from noncinema people," said Alquimia Cinema president Francisco Ramos. "And we have to be very realistic that someone from the construction business is not going to want to invest money in films that don't do huge numbers at the boxoffice."

Others question the law on other grounds.

"The main problem with the law is that it is born already outdated," explained producer Antonio Saura of Zebra production house. "It hasn't taken into account the immediate future. As producers we work two years ahead of the present. The present conventional business is ceasing to exist and this is precisely the business that the bill looks to support, rather than looking ahead at all of the changes taking place."

The fury unleashed by the Culture ministry's draft in the various sectors pushed Spain's vice president Maria Teresa Fernandez de la Vega to get involved in coordinating the Culture and Finance ministries, while negotiating with the various sectors the possibility of self-regulation on the part of the broadcasters.

But time is running out. If the government fails to approve the bill at the weekly cabinet meeting next Friday, as it did this week, it will give hit parliament's summer break and the whole thing will have to wait and risk losing steam.

That could be just what the government wants.

"In the end, it'll probably be agreed that the broadcasters can self-regulate. They'll negotiate something that all parties find acceptable," Lola Films chief Andres Vicente Gomez said. "It just needs a bit of time."