Spanish producers, exhibitors and TV networks are giving mixed reviews to
Spain's controversial new film law, recently approved by the Council of

The legislation, expected to receive fast-track treatment in Parliament, has been mired for months by bitter opposition from exhibitors, TV networks and some actors - and the controversy hasn't died down yet.

Perhaps the only part of the law that enjoys broad backing is the significant increase in tax write-offs for financial investors in Spanish productions, from 5% to 18%.

'For the first time, it's profitable for private institutions to invest in Spanish film,' said Pedro Perez, president of the Spanish Producers' Federation, FAPAE. 'It's going to produce a radical change in the size and quality of the productions.'

The budget of the average Spanish film is only $4m (Euros 3m), he said, compared to American budgets that regularly hit $150m-$200m.

An infusion of private capital will help Spanish films compete with expensive foreign rivals, said Alvaro Longoria, a producer at Morena.

'These financiers only invest in projects that have some sort of commercial
potential,' he said.

However, the good vibes end there.

Movie houses are infuriated by the law because it sustains a screen quota for Spanish and European Union films, which cost them $1.3bn (Euros 1bn) over the last six years in lost revenues, according to the Federation of Spanish cinemas, FECE. With few notable exceptions, the Spanish public wants Hollywood films, exhibitors argue.

'They are forcing exhibitors to show a film that doesn't have any appeal to spectators,' said FECE director general Rafael Alvero.

Meanwhile, exhibitors complain that the law does not address a long-standing gripe: the steep fees charged by major American distributors, which are 15 to 20 percent higher in Spain than in other European countries, according to FECE.

Elsewhere in Europe, the distributors charge 45 to 50 percent of box-office receipts, while in Spain the average is 60 percent. Why' Because they can get away with it, Alvero asserts. 'There is no law that puts a cap on what they can charge.'

Television networks, which double as producers and broadcasters, are bristling at the law's requirement that they invest 5% of their gross earnings into Spanish productions. This is a small triumph for them, however, because a previous draft upped their obligatory investment to 6%. But they would like the requirement to be lowered or eliminated altogether.

'It's much cheaper to buy a film at a festival and show it in three chapters than to finance it from the beginning,' said one television producer. 'Everyone racks their brains to come up with made-for-TV movies to use that money and they only get a small audience.'

Many details of the law are still up for negotiation, but Morena's Longoria believes that networks will also be required to seek 40% participation of independent partners for each film they make. This will favor the large and medium-sized independent producers, who will also have a leg up now when it comes to receiving government subsidies, he said.

'If things stayed the same, the TV studios would have more power to set the rules of the game,' said Longoria, whose company is working on an $80m (Euros 60m) co-production about Che Guevara's life with the Telecinco network.

'To have the industry in the hands of people who don't believe in it is not very good,' he continued. 'They say they just invest to meet the quota, and if it were up to them they would put the whole quota into one megaproject co-produced in another country.'

Some directors, though sympathetic with the need for better financing, don't believe any law or quota can help the Spanish industry. Instead, they say,
Spain should simply produce less dreary films that the public wants to watch.

'Everyone sees that there is a problem in the film industry but nobody dares to say that the problem is many of the films are bad,' said Maria de Kannon Cle, director of My Sweet Stranger starring Michael Madsen and the spokeswoman for Madrid's first international film festival, Filma Madrid.

'Creative folks have to realize that there are a lot more things to write about than what happens in the pueblo or the Spanish Civil War,' she said. 'When I watch TV, I look for films that aren't Spanish because I just want to relax.'