With Howard Hughes, ClintEastwood and Ray Charles in the running, this year's Oscarhopefuls read like a list of American icons. But the Oscar nominations unveiled today are as much a testament to European filmfinancing as to the acting and directing skills of Martin Scorsese, LeonardoDiCaprio and Eastwood.
More than ever, USfilmmakers such as Scorsese and Eastwood are relying on European finance tomake their movies fly. Scorsese even calls his Oscar favourite The Aviatorhis "European" picture. His biopic of philanthropist billionaire Hughes wasproduced by LA-based Brit Graham King and financed by German investors throughDeutsche Capital Management's tax-based fund, IMF.
The director of Goodfellas,Casino and Mean Streets is not alone. In a rare example of Eastwoodmoving at least partly off the Warner Bros lot, rights to his acclaimed boxingfilm, Million Dollar Baby, were sold off to European distributors. BeyondThe Sea, Kevin Spacey's biopic of 50s crooner Bobby Darin, was set up asEuropean co-production to tap into local funds in the UK and Germany.
"We brought an entirely American subject to Europe because wecould structure it as an Anglo-German co-production," said Beyond The Sea'sproducer Andy Paterson.
Spacey accessed tax-basedinvestment from the UK through financier Visionview and German support fromStudio Babelsberg, a film studio near Berlin. Paterson pointed out that therewere also creative factors that attracted the shoot to Germany. Parts ofBerlin, he notes, have unspoilt locations from the 50s and 60s.
The worry for producerssuch as Paterson is that European financing is starting to run dry and US filmswill stay at home or relocate outside Europe. Spending by US productions shootingin the UK plunged by more than 30% last year, according to annual figures fromGovernment-backed support body the UK Film Council.
The dollar's weaknessagainst sterling and the Euro is a major factor in making it more costly for USproduction to shoot in Europe. Adding to the fears, the UK and Germangovernments have recently signalled they are taking tougher stances on taxlegislation. Causing further uncertainty amongst investors in the UK, areplacement for the current tax support for films under Section 48 is yet to befinalised, despite Section 48's expiry in July.
"These mechanisms havealways come and gone, but it's very hard at the moment to see how to financeanything when a lot of European funds are disappearing and the amount of taxsupport on offer is being reduced," said Paterson.
London-based film financierFuture Film Group is the latest casualty of a sluggish German media market anduncertainty about the tax authorities' stance on media funds. The fund launcheda public offering in Germany last year but has withdrawn after failing to raiseenough to invest in a portfolio of projects.
Future's co-founder StephenMargolis is still active in Germany and aims to launch another fund in eightweeks. But he said that the economic climate was affecting film investors."Some of that nervousness and uncertainty must be affecting whether peopleinvest," he said.
Future's withdrawal cameonly weeks after IMF, the German tax-based fund behind The Aviator, wasforced to pull its latest edition. The previous edition of the fund, whichfinanced Oliver Stone's Alexander, raised more than $200m last year.
Screen International is hosting a one day conference, The European Film Finance Summit - Europe's New Money, on Thursday February 10 in Berlin.