The Portuguese film industry is beginning to feel the effects of the growing financial difficulties within the nation's broadcasters. The global slump in advertising has hit this corner of Europe particularly hard, with one Portuguese television executive estimating a 40% drop in the market in recent months.

Pedro Berhan da Costa, president of the state film institute ICAM, says the funding body suffers as a direct result. "In our budget two-thirds of revenues come from television advertising," he says in reference to a law requiring broadcasters to invest 3.2% of their income from ads in ICAM. "And the advertising market in Portugal, as elsewhere in Europe, is not on an increase."

Private broadcaster SIC has had to put forthcoming productions out of its ambitious TV movie division SIC Filmes on temporary hold until it secures a corporate sponsor, according to SIC Filmes general director Alexandre Valente. The ICAM-backed initiative, which has produced 10 movies annually for the last two years, boosted the nation's feature film output by more than 50%.

Meanwhile public network RTP, the only local broadcaster with a formal obligation to co-finance all films subsidised by ICAM, is reportedly grappling with a hefty debt.

"They have debts not only with film producers but also with producers of TV programs," asserts a sector analyst with the Lisbon-based offices of GECA (Center for the Study of Audiovisual Communication).

Current industry reports indicate that RTP has begun negotiations with the national independent producers association (APIT) for repayment of some of the outstanding fees.

"It has been publicly confirmed by the president [of RTP] that they have very serious financial difficulties," ICAM's Berhan da Costa adds. "We know that they have difficulties paying not only for film product but also for television product."

Many expect the situation at RTP to improve, or at least change, following the country's general elections, which have been called early for March 17. "There is a lot of discussion right now about whether they should sell off or close down one [of RTP's two] channels," says the GECA analyst, who goes on to suggest, however, that such drastic measures are unlikely.