Unveiled amidst great fanfare this time last year, the European Union plan to help bankroll the European film industry with loans from the European Investment Bank appears to have hit a brick wall, according to a report in this week's Screen International.
The Luxembourg-based EIB announced plans to include the film industry in a brand new Euros 500m credit line for the burgeoning audio-visual and information society sector.
Disappointingly, little has happened since, save two miserly Euros 20m credit lines granted to a couple of French credit banks who specialise in loans to the audio-visual sector.
Others have tried - but failed - to raise cash from the EIB. Michael Kuhn, former CEO of Polygram Filmed Entertainment, says he tried to raise funds for his start up production outfit Kuhn and Co - which last year secured $200m in financing from Citibank and clinched a four year, 10 picture deal with 20th Century Fox - without success.
" I would have thought our company was the perfect thing for them to get in on. I spoke to them about a year ago - had a meeting with their guy in London and never heard back. I'm still waiting for the call back. "
What is going on' Understandably few industry sources will go on the record for fear of hampering their search for capital.
But Screen International has uncovered reports of serious tensions with EIB project managers and an endemic reluctance among the EIB fraternity to take a risk on the film sector.
Another problem is the distant relationship between the EIB and the final destination of the money it has at its disposal. Big European studios might be able to approach the EIB directly, but anyone else must ultimately approach banks for EIB-sourced financing.
It is the banks who have to have the relationship with the EIB - and the job of securing the capital. The banks themselves would then have to assess the risks - but would need to have a 'slate' of several projects to balance the chances of individual failure.
"It seems so far that even banks have not convinced the EIB to intervene," says one EU insider, citing big problems in the way the EIB structures itself.
The plan was unveiled in Cannes by European Commissioner for Culture Viviane Reding and EIB president Philippe Maystadt. "I cannot accept the fact that American films account for 75% of box office takings in Europe while the EU produces more films than the US," Reding declared to an audience of film accountants and bankers at last year's Cannes film festival. "I will not sit back and watch our young artistic talents and audio-visual entrepreneurs disappear across the Atlantic," she added.
Reding, however, defends the EIB's role. "Philippe Maystadt and his team in Luxembourg do a great job. Within the last eight months, the i2i Audiovisual initiative has finalised or is finalising deals with banks, media groups and film studios for about Euros 400m." She adds that the initiative is taking part in five venture capital funds in the entertainment sector.
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