Speaking at a film financing roundtable on the eve of this year's Munich Film Festival, Klaus Schaefer, chief executive of the Bavarian Film & Television Fund (FFF Bayern) said "foreign producers will be forced to have a German co-producer if they want to access the rebate scheme [for production costs incurred in Germany].
Schaefer, who is one of the members of a working party which has been advising Culture Minister Bernd Neumann also said a proposal was currently being considered to impose a limit of for the rebate payable to a producer to have an upper limit of $5.1m (Euros 4m).
The German government has budgeted $76m (Euros 60m annually for the next three years from 2007.
"The idea is that the rebate would be part of the closing financing so that a film must have at least 70% of the financing in place before a rebate is applied for," Schaefer added.
"Moreover, the financing must then also be closed after a certain period of time and principal photography must begin soon after the rebate is granted, otherwise the money would be blocked."
Bavarian politician Georg Fahrenschon, who sits on the Bundestag's Finance Committee, said he expects the rebate scheme to be finalised by the end of November.
Aware that Neumann's scheme had not addressed the Merkel administration's promise to mobilise private capital for production in Germany, Fahrenschon pointed out that "the complete landscape of private equity and venture capital" would be analysed by the Finance Ministry to see where new legislation could be introduced to attract investment.
However, he stressed that any hopes for an investment model on the lines of the old-style media funds was illusory: "the old [paragraph] 15b cannot be afforded by the government at the moment, it simply cannot be financed" , while Robert Strasser of the media funds interest group BPFM said "any pressure of time is not necessary.
We would rather have a good solution reached for private capital in 2007 than have something rushed through now."
Strasser suggested that private placements were a future option for the film industry, "but if an investor comes into such a risky field as film, one has to offer them a certain upside, and a big problem is the harmonisation with the other financiers. Moreover, we need to have legal certainty and planning reliability for this kind of investment"
The publication of Neumann's rebate model also prompted the launching in Munich at the weekend of the MoneyMeetsMedia platform by the HypoVereinsBank, the Bavarian media watchdog BLM, Bavaria's state bank LfA and the regional marketing body gotoBavaria, to encourage closer collaboration between the worlds of banking and media to develop new business and financing models.
The closed session was attended by such leading industry players as Constantin Film's Martin Moszkowicz, Medienboard Berlin-Brandenburg's Kirsten Niehuus, NBC Universal's Wolfram Winter, HDF Kino's Thomas Negele, and ProSiebenSat.1 Media's Stefan Gaertner.