Spain's Film Industry Goes under a Microscope over State Subsidies ; Some Movie Producers Are Accused of Inflating Sales to Increase Their Aid

Article excerpt

As the industry struggles with the impact of government subsidy cuts, some producers are accused of inflating ticket sales to qualify for state aid.

Jose Luis Garci is one of the few Spaniards to ever win an Oscar. In 1982, the director's "Begin the Beguine" became the first Spanish production to win an Academy Award for best foreign language movie.

But his latest, "Holmes and Watson, Madrid Days," was met with little enthusiasm. It got a lukewarm response when it was released last September. Over six weeks, its audience steadily decreased.

Then, in its seventh and final weekend, ticket sales rose 5,300 percent, according to data from Rentrak, a company that tracks audience levels.

That stunning figure caught the attention of industry watchers who track cinema statistics, in Spain, Hollywood and elsewhere, and who said it was the latest example of abuses in Spain's film subsidy system. Some producers, they contend, inflate ticket sales to reach audience thresholds that enable them to receive big state subsidies worth as much as a third of the cost of production.

The complaints come as the Spanish film industry, like the rest of the country, is struggling with the impact of government subsidy cuts and tax increases aimed at reducing the deficit and complying with budgetary targets mandated by Brussels. In February, the Goya awards ceremony -- Spain's version of the Oscars -- turned into an argument against austerity, as award winners used their acceptance speeches to denounce cuts in public spending on culture and other sectors like health care.

State financing for Spanish cinema has been halved since 2008 and the start of the financial crisis, down to EUR 39 million, or $52 million, earmarked for 2013.

Some producers and distributors, like Xavier Calafal, claim that the problem of inflated tickets lies with the authorities, who devised an inefficient aid system whose rules are not even enforced. "The real scandal is not the fake purchase of tickets," he said, "but the fact that the administration has been turning a blind eye to cheating on a massive scale, including some cases of accounting fraud."

The reason for such tolerance in the midst of a crisis, Mr. Calafal suggested, is that "now that cinema revenues are falling, any revenue, even fictitious, is seen as welcome to make Spanish cinema look a bit healthier."

But Susana de la Sierra, the director general of the Institute of Cinematography and Visual Arts, said that her agency, a part of the Culture Ministry, has worked hard to clamp down on the misuse of subsidies, with inspectors touring cinemas weekly to check that audience levels correspond to what the cinema sales figures later show.

Over all, the film agency cited 40 cases of administrative abuses last year, collecting a total of EUR 243,000 in fines. Ms. de la Sierra would not disclose the names of the offenders or the reasons for fining them, and she would not say whether the "Holmes" movie was on the list. …

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