Co-productions: flexing the international muscle
At this year’s MIPCOM, Screen Australia launched new International Co-Production Program Guidelines. Holding Redlich’s Sonia Borella looks at the changes and what they mean for producers considering official co-production projects.
The federal agency chose one of the industry’s most cosmopolitan events to launch its new International Co-Production Program Guidelines (the “New Guidelines”), perhaps making a statement on the importance it places on the program and the changes that are now in place.
A review of Screen Australia’s guidelines applying to Australia’s international co-production program (the “program”) was requested by, in particular, Ausfilm and SPAA.
Screen Australia responded to the requests by conducting a comprehensive review of the guidelines applying to the program (the “Old Guidelines”). As part of this review, Screen Australia consulted with the industry and sought advice on what changes it would be permitted to make given it is necessarily limited by the terms of the “co-production arrangements” (that is, each treaty and memorandum of understanding (“MOU”)) with which Australia is a party with another government or government agency.
While all this business of which coproducer “raises” the money is a nice label … in practice, it’s nonsense.
Apart from coproduction country “rebates/tax offsets”, “government investment”, “investor tax breaks etc”….
(where there is some legitimacy about who “rasied that money” and how and where the money should be spent – since those govt incentives have a country-specific-purpose)
… in the large part – every other piece of the budget finance is typically “raised” by both coproducers who work as a team, and have been doing so for some years.
Sometimes a finance lead comes off, other times the leads fall over.
But in the end, the job of the “team” is to raise the whole budget.
This whole mindset of “who raises what” and “where it may be spent” is so archaic, outdated and out of touch with the reality of the marketplace.
By way of example … if a UK coproducer happens to find an equity investor who is incidentally based in AU – then who raised that money ?
the UK coproducer who found it? or
the AU coproducer who very likely will do all the meetings?
Chances are – both coproducers will be on the contract..
It’s not like there are 10BA or Section48 style tax breaks for investors any more, which could validly link local investment to a territory.
Similarly – for foreign investment or MGs.
Who owns those ? Can they be split as required ?
If your UK coproducer found them, but the investment is needed to cover the AU spend … are we Aussies going to say “sorry, we cant accept your investment because it was my coproducer who found you, and since I didnt – I’m can’t use your money to make the film!”
If the Studio/Distributor offering the MG is based in one of the coproduction countries … does that mean all of that MG must be attributed to that copro country?
… and maybe you can split things up … but try finding that in the “rules” …
All these “red-tape rules” do nothing to facilitate filmmakers getting their films made.
Why not simplify and say:
Any government incentives must be spent in the copro country which provided them, then how the coproducers divide up the rest of the finance they co-raise … is their own business ‘provided’ the spend “in” each country and/or “on” each countries elements, doesn’t fall below a minimum threshold.
Then points match whatever the spend split with some margin of flexibility eg 10%.
Then there are all the issues of the budget itself …
Has nobody at Screen Australia yet created an A-Z budget for coproductions that includes exchange rates, exchange margins, spend split, and qualifying spend for each copro country ?
Trying to work out exactly what the spend split is, without all these isnt easy.
The A-Z budget on the Screen Australia site certainly doesn’t do any of this.
(not to mention that it is riddled with formula errors)
If they want one with all the bells and whistles – only too happy to consult for them.