Get out your light meters, ladies and gentlemen; it´s time once again to make movies in the Czech Republic! At least, such is the collective hope of the film community after the CR film incentive package was finally approved by the European Union – the last step in a torturous bureaucratic journey.
For years, the Czech Republic was a hot destination for foreign film productions. This all changed gradually over the past half dozen years as worldwide economic conditions deteriorated and CR was slow in establishing government support for the film industry, making it lag in competitiveness behind countries like Hungary.
One of the major hurdles in passing an incentive package has been the perception that incentives are somehow a giveaway of state funds. It took the interim government coming to power to find ears that would listen differently.
“It was hard to explain that film is also business,” said Ludmila Claussová of the Czech Film Commission. “There was this idea of film as culture, not business.” The proponents of the incentives were sent to varying ministries, given the proverbial runaround. They needed to prove that film was an industry that the country could profit from.
David Minkowski, Head of Film Production for Stillking Films (production company of GI Joe, Casino Royale, Wanted, Alien Versus Predator, Bourne Identity, among many others) believes that “it has been proven in many countries and by many governments and private studies that the ‘knock on effect´ is many times greater than the investment. If the government invests one dollar in film incentives, it will make several times more than that in tax revenue generated from what films spend locally. It means jobs, increased tax revenue and infrastructure investment.”
Additionally, as Claussová pointed out, the secondary benefit is the promotion of the country. “Foreign film production contributes to a picture of the country as business friendly and open for business.”
Dan Frisch, the president of IPC (production company that made Solomon Kane, League Of Extraordinary Gentlemen, Hostel 1 & 2, and others) agrees: “In addition to employing many people and investing large sums of money into the economy, what we do and where we do it is a visual business card to the world. It´s all about perception, and thankfully, the Czech Republic has what it takes to back it up; it’s as good as advertised.”
Such positives notwithstanding, there were many in the government who found the idea of incentives to spur on economic growth antithetical to their fundamental beliefs.
They felt as if the Czech government would be giving away money, but as Tomáš Krejčí, executive producer for Milk and Honey Films and owner of Prague Studios (where XXX, Van Helsing, Hellboy, Alien Versus Predator, Wanted, Red Tails and more were shot) illustrates, “if the incentives will not be in place; foreign films will not venture into the Czech Republic and spend their money. This is not a Czech Republic freebie to foreign producers – it’s a well-calculated business which works in Hungary, Bulgaria, Germany, France, and UK.”
Claussová mentions another common misperception: “The incentive is not just for foreign filmmakers. A Czech producer with a Czech film can fulfill the requirements and will get the incentive too…we need to keep the infrastructure busy if we want to have Czech films too.”
These solid reasons did not persuade the government, however, and the battle to pass an incentive package dragged on for years. In the meantime, according to the figures from the Czech film commission, production volume generated by the Czech film industry directly and indirectly has dropped by roughly half from 7.17 billion CZK (in 2002) to 3.52 billion CZK (in 2008). This includes a drop from 4.54 billion CZK to 705 million CZK brought in by foreign films that shot in CR, which used to account for 80% of the overall film industry. At the same time, there was increase in economic impact of Czech movies, from 390 million CZK to 880 million. This reflects increasing budgets and amount of produced Czech movies. Overall, employment in the industry from 2003 to 2008 still experienced a 38% drop. Figures for the past year are not yet available, but are sure to be even starker as foreign production was all but absent in 2009.
“Film business in the CR has been diminished to the point that every single production company, film supplier and vendor is affected by the lack of work,” laments Krejčí.
Frisch of IPC reflects an all-too-common theme. “Even though we have submitted budgets/bids for films that can compete with Hungary, without a Czech rebate, the perception was that places like Hungary, Bulgaria, Luxembourg and Romania are cheaper than the Czech Republic.”
Tyler Gooden, an expat who´s lived in Prague for more than seven years and who worked on many of the foreign film productions found himself moving to another part of the industry. “I’m still working, luckily, but in postproduction,” he said. “Other expats I know are picking up pieces, either from commercials, or through foreign contacts they made when Prague was booming. So a lot of them are working abroad, have relocated temporarily, or left Prague altogether. But the film industry is like a depraved circus. If you want to survive you have to go where the action is. That will never change.”
What will change now that the incentive package has been approved? Film production companies will compete on a first-come-first-served basis to get a 20% rebate on expenditures in CR. To partake of the allocated 400 million CZK, the companies will need to pass a cultural test which rewards projects (features, docs, TV films, serials) that feature or benefit European culture. To get the rebate, companies will have to submit an audited statement at the end of production and the money will be paid out in the form of cash grants. Now that the program is approved, it can last as long as the government wants it (while it is of course in the power of the next government to change the terms or cancel the whole thing altogether).
“We need a law,” Claussová said. “It will be more stable than a government program [which needs yearly approval]. We start working on that now.”
So will this philosophy of “if you pass it, they will come” work? Will Hollywood come knocking?
Claussová is hopeful. “Now we start again…the interest of the producers was there…they couldn’t use us because they needed these incentives…now we are back among the other players but we won´t instantly get back to business from five years ago…other countries (like Hungary) didn´t have the infrastructure CR had…but by now CR has lost that advantage.”
Frisch´s thinking is that the films will come back “most definitely and probably immediately. To make a film today is like choosing an airline – you have many choices and options, but it is always nice when you can choose your favorite, and unfortunately price plays a major role in the decision. The Czech Republic to me is one of the best places in the world to make a movie and the passing of the rebate will help making movies in the CR possible again.”