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The french italian coproduction

12/01/2013

Written by Sébastien Lachaussée

& Elisa Martin Winkel
 

The last Cannes international film festival gave a great place to French-italian co-productions : Miele, La grande Bellezza, Salvo or even  le Passé, bringing back to the spotlight a  former relationship between the two countries. 

This sudden renewal of French-italian relationship could be surprising but is finally easy to explain and is necessarly going to go on.

We can say on that matter that since the practical  application of the co-production agreement in 2003 there is an average of 20 movies a year coproduced by french-italians partners.

Moreover these past few years Italy has been among the three firsts France's partner in movie production at the initiative of France or of a foreign country. This can be explain by two circumstances :  a co-production agreement more flexible than in the past   and some italian supports more and more appealing for foreign producers.

 

Furthermore,  the announcement of a development fund for French-italian movies  enables us to say that it exists a real reinforcement of French-italian relationships in the movie-makin field. (I) Otherwise, Italy confronted to an important deterioration of her productions volume has considerably improved her support system and the new italian subsidies could be advantageous for French coproducers in order to set up an efficient financial plan. (II)

 

I)        Renewed and reinforced French-italian relationships

 

In the 50's ans 60's, French and Italian movie industries compete, coexist, collaborate and are at the top of the european production. At this time we count in average a hundred  french-italian co-productions a year, among them well-known movies such as  Luchino Visconti's White Nights or Leopard,  Jean-Luc Godard's Comtempt  or  Federico Fellini's Dolce Vita with the noteworthy involvement of Pathe.

Successes of this join effort  were the  main beneficiaries of the French-Italian co-production  agreement of August 1st 1966 who came to ease the setting up of these kind of co-productions. 

 

However, if French-Italian relationships toward cinema are quite old, they have decreased with time, for lack of a convenient surroundings. In fact they have known a very bad collapse in the 80's-90's as testified for example the stepping down  of Gaumont Italian's branch.

 Nethertheless this relationship remains a major component of european movie-making industry  and confronted to an important decrease of the financial, technic and artistic exchanges between the two countries, the interested sectors and governemental institutions wanted to find a convenient answer.  That's why the co-production agreement has been renewed between the two countries (a) but it's also why they have constituted a new fund for French-Italian co-production's development (b).

 

a) A new co-production agreement

 

The setting up of a new co-production agreement  in 2003  has came change radically  the applicable measures to co-production's relationships between the two countries.

Indeed if a framework already existed to rule French-Italian co-productions, he dated by  1966 and the few operated changes  since were not enough to made this agreement efficient today . 

 

 The co-production agreement allows the producteur to benefit from the advantages resulting  from the legal provisions linked to the movie-making industry in each country. If it is understood that these advantages are only granted for the producer from the country who concede them nonetheless this permits a potential plurality of state subsidies for a same movie.

 

In the substance, this new agreement establishes some extremely flexibles conditions for the producers, being about financial conditions or shooting conditions.

It is intended in the agreement that “The respective contributions of the co-producers from each state in a film co-production can vary from 10% to 90% of the final cost of the cinematographic work.». In order to make a  co-production it is therefore  possible to provide only  10% of the movie budget to benefit from the co-production agreement.  Moreover the text predicts, as an exception, to minimize this minimal threshold  to 5 %. This can happen in two circumstances : either for the movies with a budget higher than 7,62 M euros or either for the case  in which the relevant  authorities from both states have agreed to  lower the minimal threshold.

 

We can notice that this statement is very well-inclined towards the French-Italian co-production development : the chosen minimum threshold is particularly low comparing to the usual thresholds. To compare only with europeans countries we can, as an exemple, observe that the german and spanish minima are higher : minor coproducer must provide at least 20% of the movie budget. We can also remind that this minimum threshold of 20% was the one who was applying to French-Italian co-productions before the introduction of the new agreement, more lenient to the producers.

 

Moreover, the agreement predicts that it is possible to film  some of the scenes who necessite outdoor settings  in a country who is not part of the convention if the scenario or   the movie action justifies it. Some cinematographic works benefiting from the co-production agreement can also be coproduced by an other country with which France or Italy is linked by a co-production agreement. This possibility is essential because she allows  coproducers to work in joint effort, with diversified contacts, without fearing losing  the benefit of the co-production agreement.

 

Mostly, the French-Italian co-production agreement does not require an obligation tied to the workers nationality on the shooting set. This absence of restriction is pretty rare, generally co-productions' agreements oblige to hire technicians from one of the countries or at least from an european country. However this requirement could be to respect depending on the  requested  subsidies and on their specific attributions conditions.

 

 Another important point to make is that the French-Italian agreement allows financial co-productions, which is rather unusual. Generally a real artistic collaboration between the producers is required.

 

With this new framework, French-Italian co-productions becomes more bountiful and the suppleness of the new agreement seems to be  bearing fruit and  doing good to french-italian co-production.

Nethertheless if the French-Italian co-production agreement seems to be efficient, it remains that it mainly has  financial implications and Valerie Ganne reminded it : “artistic co-productions [remain] too rare”. Nowadays the Fund for development seems to set things right about this tendency.

 

b) Development fund for french-italian co-productions

 

Beyond the co-production agreement CNC and Mibact have just instituted a development fund for french-italian cinematographic works. This fund's aim for inciting the growth of artistic co-productions.

 

Indeed, if the co-production is often chosen for financial reasons it is nethertheless intesting to consider the potential cultural enrichment that she can procur. CNC expresses in that sense that the fund's goal is to give an helping hand to cooperation  between co-writers and co-producers from both countries  at the sooner  in order to favored an artistic development enriched by the confluence of culture  and imaginary of both countries.

 

At the beginning the idea was to constitute a mini-treaty like France has with Germany, but the cost of it has rejecting this possibility. It is finally a development fund which has been announced in Cannes and which diposes of  an annual budget of 500 000 euros.

This fund intends  to help  producers during the development process of a full-length movie, no matter if it is feature, documentary or cartoon movie.

Only the expenses accomplished before the shooting and after the deposit of the request for grant's form are eligible. It will be notably the script authors' pays, the costs incurred by researches and scoutings, social securities contributions or the eventual legal costs.

We hope by supporting French-Italian projects during their development that they can enrich themselves  from the benefit of both cultures rather than being just some financial arrangement.

 The will of the institutions is to select an average of ten film projects per year with an average contribution of 50 000 per projects.

 

So then , the co-production's shape envisaged is less flexible than in the co-production agreement dated from 2000. The coproducers contributions can only fluctuate between 20 and 80%. Above all the “financial co-productions, it is to say the co-productions which do not involve a technic or artistic involvement proportional to the financial inputs, can't benefit from the fund grants.”

 

So the development fund offers a selective support, annually granted  by a specific French-Italian commission (made up by 3 members chosen by CNC and 3 members chosen by MIBACT).

Deposit of the first application files to pretend to a grant from the development fund has just  opened October the 15th and credits will be allocated at the end of the year.

 

As we saw it, French-Italian relationships in cinema field have been rekindled. It would be interesting now to see which helps are available in Italy  for movie producers since the co-production agreement or  just by locating a shooting in Italy.

 

II)      An interesting but fragile Italian system

 

It is suitable here to take stock of the Italian movie economy, indeed, if it has been flourishing for a long time it has also known a very bad time. In 1987 Daniel Toscan du Plantier was even writing an harsh article “Italian Empire decline” and indeed Italian movie production has known a spectacular decrease.

 

Television's advent in the country contributed widely to this decline and in 1995  Marin Karmitz  claimed  “We can say that the disastrous influence of private televisions has destroyed italian cinema” 

We must point out that Italian channels participate very little to movies' funding plan. They have no obligation to do so and when they do they head into mainstream productions, neglecting art-house cinema who would be suitable to be  exploited during  festivals or in foreign countries.

  Otherwise distributors' support is really low, with a quasi-systematic lack of minimum         guaranteed, which contributed to the Italian independent movie production's deceleration.

This is certainly this lack of channels and distributors' support toward the art-house-cinema who explains that, this past few years,  most of the french-italian co-productions are initated by Italian coproducers turning towards French producers in order to complete  their budgets.

 

Nonetheless, Italian cinema industry, such as the Italian government, doesn't want to let the production  to extinguish and it is why a “urgent intervention in favor of cinema” has been taken in 1994 and that various recent measures afford the italian cinema industry to hold on and afford the country to stay attractive  for co-productions.

We will remark that the national subsidies system has been progressively reinforced (a) while in the same time  several regional aids have been developed (b).

 

a) A reinforced but unpredictable national subsidies' system

 

In Italy aids in favor of cinema are really old, the country was even one of the first to organize an automatic production support in 1938. However nowadays this support is extremely low : it  represents only 8% of the public support while in France it reaches 70% of the public support for cinema industry.

 

In 1994, in the middle of the Italian cinema crisis, government came to modify the support system in order to reinforce it (1)  before instituting a Tax credit in favour of Italian movie's production 10 years later. (2).

 

1) Mibact's aids since 1994 reform

 

The 1994's decree modified  the Italian support's system : it establishes a bank guarantee fund handled by the  Banco Nazionale del Lavoro which appears since like  one of the principal tool for italian movie making industry, and reorganizes the support provided by the MIBACT, equal to CNC.

 

Since then, the Mibact offers some new selective helps for movie production via a Fund for production, distribution, exploitation and technic industries (Fondo).

This system is rather well developed and can allow a movie to obtain a substantial part of its budget.  The upper intake is 1.350 M euros for first and second features and can reach 2,5 M euros in specific cases. In every situation the allocated grant mustn't be higher than 50% of the movie production final budget. Some exceptions  exist  for first and second movies and the threshold can be extended to 90% of the budget.

Fondo's budget for 2012 was of 25,8 M euros with an average support of 300 000 euros per movie. It is helping in average 80 movie's production a year.

 

If it seems very close from the advance on earnings set up by the CNC which had a budget of 30M euros for 2012, we have to remind that the Italian system is much more narrow than the French one which multiplies the funds in favor of production (developement fund, writing fund, automatic fund...)

 

Main problem stays that in Italy more than in France, allocated funds for cinema are intrinsically related to the  art and culture departement's budget. Fondo depends on the financial law and therefore is very uncertain from one year to the next.  We remember on this matter that Giulio Tremonti, Italian economy minister had been distinguishing himself in 2001 stating that : « Con la cultura non si mangia » (« It's not with culture that we eat »), leaving open a worrying shadow over the system's longevity.

By the way Massimo Bray has reassured the Italian movie making industry during Venice film festival  by announcing a system's relaunch  with a fund fitted with 90 millions euros.

 

Moreover, Italy seems to be taking to heart to reinforce and to ameliorate her  cinema support system, as testified the estalishment of a Tax credit in 2008

 

2)       Italian Tax Credit for movie making's industry

 

This Tax credit offers to guarantee a national aids policy for cinema, in order to promote national films production and distribution. To that purpose, the financial law establishes some tax reductions in favor of companies, that they are or not  part of the movie making industry, who reinvest part of their benefit into movie production or distribution in Italy.

 This new kind of support is interesting at the same time for foreign movies and co-productions with Italian partners.

 

All films  are eligible to Italian Tax credit : documentary, feature, animated cartoon, short or long-length movie. Even so some favored categories exist : “difficult” movies (such as documentary, first feature, some movie responding under specific conditions) and movies with a modest budget which means a budget lower than 1,5 M euros.

 

The system also distinguishes Italian movies from foreign movies and coproduced movies but  in order to revitalize the cinema industry in Italy it is planned that foreign productions or co-productions with Italy can benefit from the Tax Credit.  However, the Tax credit allowed to the producer comes down to the italian executive producer.  Its amount is calculated by examining the italians expenses and with a 25% rate, that is to say 10 per cent more than the rate applied to national movies.  This sum can't exceed 60% of the movie production cost and is limited to 5 M euros in every circumstances.

This measure could make Italy much more attractive as testified the shooting of To Rome with love or the  part-shooting of  « Belle du seigneur » in Italy.

 

On the co-production's side Tax credit is less extensive. Only the Italian part can benefit from the Tax credit and it is only calculated on the part  of rights of the Italian production.

The applying rate is of 15%, as for Italian movies, and is calculated from the part of  the Italian coproducer.

This provision allows the Italian producer to benefit from the Tax credit even when he enters into an international co-production. As an exemple the Italian producers of Salvo have been abled to complete their budget with French coproducers (among them Films distribution and Cite films) who came to bring a third of the movie final budget.

 

In despite of its success, Tax credit in favor of cinema industry is discussed. Already  in 2010, the three-yearly plan for cinema tax credit had aroused some difficulties. In this period of crisis the government would have preferred to squeeze this budget while the cinema workers, principally defended by ANICA, maintained that the Tax credit was the only hope for the Italian cinema to survive. At this time tax credit had been extended for 3 years and he has just been extended for one more year (until december 31st 2014).

 

Besides, Massimo Bray, announced a reinforced  policy in favor of  cinema, including in particular  a duty for Italian channels to  finance  and broadcast Italian movies. As we said, Italian movie production actually  doesn't benefit from broadcasting group's support  and italian cinema suffers from it.

If the will of the art and culture minister materializes,  Italian movie making industry will benefit from a new source of financing, allowing  it to straigthen up and to become an interesting partner for a co-production.   French example proves it well : channels investments by pre-buying or coproducing is capital in a movie funding plan.

 

It is capital to highlight that beyond the national aid's system, Italy presents an important regional support's system. These regional funds could be pretty interesting within the context of a partnership with Italy or a shooting in Italy.

 

b) Diversified regional funds making  shootings in Italy more attractive

 

In the same manner than some regional funds have been developed in France (Ile de France, Rhône-Alpes Cinéma, CCRAV...), various regions of Italy have set up some entities to favour cinematic creation on their territories.

 

In the very first place we have to notice that the italian  film support commissions got together within an association, the Italian Film Commission (IFC). This association puts together 17 support commissions and allows a better readability  of Italian regional funds network.  IFC reinforces cooperation and  information exchanges as well as the  cinema industry's growth in Italy.

We are not going to linger over every region, nonetheless we will evoke some of them among the most developed in order to enlighten our words.

 

Apulia region,  in South-west Italy,  as an example, presents different aids for movie industry since 2007.  In fact she intends to favor the movie industry in the region  through the  Apulia film fund. As well the region disposes of a regional fund, a hospitality fund and an international fund. It is understood that the granted aids are matched  together with a localization duty for both  expenses and shooting (commonly three weeks shooting in the region)

 

Both regional and hospitality funds   benefit from a 1 M euros annual budget but  hospitality fund is in fact the most important : it contributes in average to 38 italian majority co-productions a year. 

The international fund disposes of a more modest budget, 500 000 euros, and helps only two films a year. However he offers to the region some interesting possibilities of international cooperation. The shooting of The third man by Paul Haggis, who benefits from this fund would probably have not taken place in the region without this aid.

 

Furthermore, the commission has instituted a development fund, granted with 90 000 euros. The help attributed by this fund affect movies whom the whole story or part of the story is taking pace in Apulia. The main idea is to promote the regional heritage and culture through cinematographic works.

 

It is clear that Apulia has begun attractive for foreign producers, in co-production with an italian producer to obtain the regional and hospitality funds' aid,  or even in locating the shooting in Apulia to benefit from the international fund.

 

However we have to qualify our enthusiasm : indeed South-Italy regions are known for their abundant embezzlment troubles and it is apparently not uncommun  that the promised aids are not fully transferred to the producers.

 

On another geographic point of view, Rome's region is  particularly oriented towards cinematographic industry. Thus, the lazio region film fund is endowed with a  very consequent annual budget : 15 M euros. This fund does not make any distinction between national and international productions. It can finance a movie to a limit equal to 15 % of the project's budget or to 20% for italian majority's co-production.

 

 This aid amount can be very significant and reach a maximum sum of 500 000 euros  for a cinematographic work and 750 000  for an audiovisual work.  This aid is automatic and does not require anything except that responding to the  cultural test criteria.

Nethertheless 40 % of the production's budget  shall be spend in the region. This ratio can be reduce to 20 % if the budget exceeds 2 M euros. 

In 2011 this regional fund has been supporting 114 movies or audiovisual works, among them the well-known  Woody Allen's To Rome with love.

In addition, every year many Cannes film festival movies are some beneficiaries of this fund, such as Mateo Garrone's Reality or Dario Argento's Dracula 3D, coproduced with a french society, Les films de l'astre. 

 

Moreover, Rome-Lazio's area presents an additional fund : FILAS, with a 5 millions budget . This fund is intended for support projetcts with a strong impact in the region. Shooting must be localized in the region and 50% of the production cost must be expensed in the region. The  grant's maximum amount  is of 600 000 euro, in a maximum ratio of 50% of the movie expenses total cost. This aid is another tool to reinforce Lazio region attractivity. 

 

South-Tyrol  region also presents since recently a support fund (2009). It has an annual budget is around 5 millions euros and comes to helps the movie to an average total of 230 000 euros. The maximun amount is 1,5 M euros and can't exceed 50 % of the movie budget or 80% for first and second features and for movies with a budget under 1,5 M euros. This fund is open for co-productions, aid amounts will be based restrictedly on the italian coproducer's share.

This aid is automatic and only requires to complete a cultural test, but she comes with a very severe expense duty. Indeed 150 % of the aids amount have to be expensed in the South-Tyrol. Exceptions exist for some projects  with a strong reference to the region, either by their theme or either by their backgrounds. To sum up :  aids from these fund aims to resituate shootings in the region or to directly promote the region.

 

Although it is recent we can already constat its efficacity, in particular in its co-productions' relations with Germany.  As an exemple we can quote different movies as Hannes Lang's “Peak” or Marvin Kren's last movie, “The station”, showed in last Toronto film festival. It seems interesting then for French producers to take an interest in these aids which present a very high maximum amount.

 

We could multiply the examples, indeed every region has specific funds : Piedmont with a 5 millions euros annual budget and an expenses duty entirely localized in the region, Venezzia's region, Calabria or Tuscany with lower budgets or even Sicily which contributed to Salvo financial plan, the  recent great success of Italian-french co-productions.

 

It appears in our development that Italy presents both national and regional  developed aid systems which are to be considered in matters of co-production such as in matters of shooting location. Italy is and will remain a major partner for french cinema industry.

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