Leading producers also spoke about the growth in U.S. private equity entering the European market while on stage at the Creative Investors’ Conference at the San Sebastián Film Festival
One of the hottest topics at this year’s Creative Investors’ Conference at the San Sebastián Film Festival is the likelihood and the effects of a U.S. federal tax credit for film production. Speaking at a panel titled “Europe’s Current Challenges and Opportunities,” Lorenzo de Maio of De Maio Entertainment said he doesn’t believe the measure would be a threat to the booming European production market.
“I’m Italian but live in Los Angeles, and [the tax credit] is one of the few things uniting Republicans and Democrats,” he said jokingly. “A stackable federal credit added to state credits is a very interesting opportunity because the U.S. has lost so much of its production capabilities.”
“There’s a lot of capacity in the world, so the U.S. is falling a litte behind, honestly,” he continued. “Imagine if [a country like] Spain didn’t have incentives… It’s time for the U.S. to have it. It’s not controversial and will help rebuild some of the craftspeople that have left the business. The beauty of supporting the system is that you create new filmmakers, storytellers, companies, and cultural opportunities for co-productions. A whole ecosystem that thrives is something the U.S. lost a little bit, and it would be helpful to bring it back, but I don’t think it’s a threat.”
De Maio also spoke about another pressing topic at this year’s conference, which is co-organized with CCA Media Finance: the increase in U.S. private equity making up for a steep decline in pre-sales. “There are definitely new sources of equity coming in,” he said. “The fun of it for us is we can be quite open. With most of our [Fremantle] companies, we will look at equity or debt; we can cash flow. So what works for the project is usually the right answer if you have that flexibility, and there are so many opportunities to co-pro within Europe and so many ways of doing. The complexity is there, but it’s worth navigating it because it’s a thriving industry.”
Why Not Productions’ Pauline Lamy echoed that thought, saying that having U.S. equity come into the European market is “a new thing” for the company. “Because we can not presell a lot of films because of their language, having that type of money is really helping us make films at a bigger scale. ‘Fjord’ needed that; ‘Emilia Pérez’ needed that. A lot of films couldn’t work without this mixed system.”
Speaking of Cristian Mungiu’s Palme d’Or-winning film, Lamy said the co-production model between Romania, France, Norway, Sweden, Denmark and Finland felt a “natural” fit for the project.
“We are an independent cinema company and filmmaker-driven, so we try following filmmakers through all their projects,” she said. “Of course we are always trying to push them, but we would never force them to make a film in another language to have a bigger audience. Sometimes it happens; you can think about ‘Fjord,’ from a Romanian director who always worked in his own country, but with this story, you have characters who are in Norway and speak in English, so he could have an English-speaking cast and then have a bigger audience. It’s not a strategy; it depends on the project and the director.”