The Spanish government has approved a Euros 27.8m increase to its Cinema Protection Fund, expected to result in immediate payments on outstanding subsidy obligations.
The increase almost doubles the Fund's annual budget, 85% of which goes towards paying off automatic box office-linked subsidies, to Euros 61m for the new year. Producers are owed an estimated Euros 32.4m for releases between September 2001 and July 2002, the first to be paid out effective immediately.
'This should give producers some breathing room,' said Jose Maria Otero, director of the Spanish Cinema Institute (ICAA). 'The delayed payments have put producers in a jam, their resources tied up in banks charging interest. The 'crisis' situation has been about a lack of funds, not quality films or audiences."
'When payments are delayed, the effects are felt down the entire financing chain,' confirmed Pedro Perez, president of the Spanish Producers' Federation (FAPAE). The Fund increase should 'clear away uncertainties' for both producers and investors.
This is important considering FAPAE estimates that subsidies represent just 14% of overall production investment in Spain. Giving the news an official stamp of authority - potentially symbolic for sceptical investors - the announcement was made at a dinner last week by Spain's president, Jose Maria Aznar.
'We still have to deal with what happens to the Fund in future years,' Perez added, 'but we are more than satisfied that the commitment has been fulfilled.' Producers' top priority for the new year now turns to negotiations on TV investment in film.
The automatic subsidies pay 15% of first-year box office revenues and up to 33% of producer investment on all films which reach a minimal cut-off mark in ticket sales, with a cap of Euros 900,000 or 50% of the film's budget.
The only other production subsidies in Spain go to first- and second-time directors, experimental or documentary films, and films invited to festivals.