UCI wins battle against German Film Board

Over levies exhibitors pay to support FFA subsidies

COLOGNE -- Multiplex chain UCI has won an important battle in the ongoing war between major German exhibitors and the German Federal Film Board (FFA) over mandatory levies exhibitors pay to support FFA subsidies.

A court in Berlin-Brandenburg has ruled in favor of UCI, allowing the company to stop paying the levies to the FFA until Germany's highest court rules on their legality. In doing so, it overturned an earlier court ruled which required exhibitors to keep paying up.

UCI, like all German exhibitors, is required to pay a portion of its boxoffice revenue to the FFA, which uses the cash to subsidize film development, production and distribution. The money also goes to help support art house theaters in Germany.

Big multiplex chains claim the levy is unconstitutional because while theatrical and home entertainment distributors are required to pay up, FFA contributions by German television broadcasters are voluntary. The Federal Constitutional Court, Germany's highest court, is reviewing the case.

To get around the problem, the German government is trying to amend film subsidy legislation to make contributions by TV channels mandatory as well.

The FFA has an annual budget of around $100 million and accounts for just under a quarter of Germany's more than $400 million in regional and federal film subsidies. Separately, the FFA manages the Federal Film Fund (DFFF), which provides more than $80 million annually to support local or international productions shooting in Germany. The DFFF is financed directly by the German government and not threatened by the legal battle surrounding the FFA.