The two film funds of Mexican film institute Imcine - Foprocine and Fidecine - are drying up.
The Foprocine fund of $13.5m (135m pesos) has been virtually used up since it was created in 1999 by former President Ernesto Zedillo.
"There is little chance it will be replenished as it was formed by a presidential decree and not by a film law," said Imcine director Alfredo Joskowicz.
"This means the current government is not legally bound to pour federal funds into it," he explained.
Foprocine has backed more than 40 films including such notable titles as Oscar-nominated El Crimen Del Padre Amaro, blockbuster Sexo, Pudor Y Lagrimas and Fox US pick-up Lucia, Lucia (aka La Hija Del Canibal).
The remaining $600,000 (6m pesos) at Foprocine were awarded to three films in post production: Digna... Hasta El Ultimo Aliento by Felipe Cazals; Adan Y Eva (Todavia) by Ivan Avila and Historias Del Desencanto by Alejandro Valle. These were chosen out of 10 bidding projects.
According to Joskowicz, 30% of Fidecine's annual fund of $7m (70m pesos) remains this year. Created in 2000 via a film law, the government is obliged to channel federal funds into Fidecine.
Joskowicz estimates that at least 14 local films will be made this year, the same as in 2002. "The terrible thing is that while Mexican movies have earned more acceptance in the world, new ones are less likely to be made," said director/producer Eduardo Rossof whose directorial debut Ave Maria was backed by Foprocine.
With the one peso (US$0.10) per ticket initiative frozen in the courts since it was introduced in January, chances of replenishing both funds are slim for now. Revenue collected from the new fee was meant to fill the coffers of Fidecine and Foprocine but distributors were quick to file an injunction against the new public service fee of one peso levied on cinema tickets.
Ticket sales are estimated to reach up to150m again this year, which would have allowed additional funding of $15m (150m pesos). It was introduced by the country's Congress in an effort to raise money for local film production, but the fee riled both exhibitors and distributors who declared that it was unconstitutional to charge a tariff on a service provided by a private industry.
"The whole litigation process will take several more months, " said Joskowicz. Meanwhile, distributors are setting aside one peso per ticket but Imcine cannot tap the growing reserve until the Supreme court settles the issue.
Producers in Mexico are the last to make any money from box office returns. For every peso (US$0.10) a film earns, a producer makes a mere 13 centavos (US$0.01).
"The only production companies that can survive are those that also distribute films," he said, pointing to Columbia TriStar which has just opened a production company. Videocine, owned by media giant Televisa, is also ahead of the game as it both produces and distributes films.