Spanish Producers Decry Dismantling of Financing Model

The statement comes as the Spanish government -- looking to avoid a bailout request -- reveals 2013 general budget with significant cuts to the culture sector.

SAN SEBASTIAN – Unable to disguise his disgust with the present state of affairs, Spanish producers lobby FAPAE president Pedro Perez criticized the government’s proposed changes to the financing model and budget cuts announced Thursday.

“We’ve accepted having fewer direct subsidies in exchange for more fiscal incentives, but what you can’t do is dismantle one model without putting together a new one,” Perez said at the annual news conference held at the San Sebastian film festival. “We are entitled to ask that this change be made by consensus. Until now, more steps have been made to dismantle that to frame a new model.”

Perez remarks came as the Spanish government — struggling to stay on its feet and maintain credibility -- unveiled the 2013 general budget ahead of independent audit reports due Monday that cut culture spending 30 percent. The Film Institute will see its budget drop some 68 million euros — about 30 perent from 2012. The National Film Fund, that subsidies production, will slip 20 percent to 30 million euros — and that’s taking into consideration that producers complain aid has a two year lag time in arriving and that some 50 million euros are still owed films released in 2011.

“If this government has credibility problems it’s due to doubts in paying its bills,” Perez said. “The debt to the film industry has to be paid before the model is changed.”

The move comes on top of a hike on sales tax that saw movie admission tax jump from 8 percent to 21 percent.

The present financing model, which was recently renewed, allows for 18 percent tax deductions on capital investment in film production.

The figures presented by FAPAE at the conference, with many Spanish producers present, don’t bode well. Perez said sales plummeted 17.8 percent from last year, with a 10.9 percent drop in jobs related to the industry. Spanish cinema cornered 11.2 percent of box office earnings through September — a 2 percent drop from the same period last year.

Perez, who said he was to meet next week with the Secretary of State for Culture, said he wouldn’t mind if the new model for film financing removed film production entirely from the state’s budget.

“There are many way and formulas to get money from film activity and that it is distributed in the industry. Cinema can be paid by the revenues and taxes that the cinema industry itself generates, the same as in other European countries,” Perez said.