Co-productions save millions with complex international rules

INTERNATIONAL TREATIES SPECIAL REPORT:
THE TRICK TO TREATIES: International co-productions are saving millions

When producer Ehud Bleiberg set about raising the money for his comedy "The Band's Visit" (Sony Pictures Classics), it seemed like a slam dunk.

The movie was a $1 million-budgeted charmer about an Egyptian police band that gets lost in the middle of Israel and has to find its way back.

But raising that money in Israel was no easy task, especially when a substantial part of the cast was not Israeli. Even with a hefty contribution from the Israeli Film Fund, along with sales to satellite and free television, Bleiberg didn't quite have the capital he needed.

That the film got made owes a great deal to an obscure trade agreement between Israel and France that allows a film shot in the former country to qualify as "French" and benefit from French subsidies.

"If you have a number of points (that meet certain key criteria), you are entitled to get subsidies from the ticket sales in France," Bleiberg explains, "even if you didn't shoot your film there."

Bleiberg is one of hundreds of producers who have benefited from a web of international co-production treaties that have transformed the independent business in recent years.

Films as varied as 2004's "Hotel Rwanda," "Starship Troopers: Marauder" and Steven Soderbergh's upcoming biographies of Che Guevara, "Guerrilla" and "The Argentine," have all accessed local subsidies through various co-production treaties that link countries as disparate as China and Australia, Canada and South Africa, and Spain and Puerto Rico. Often, producers are able to shave 25% or more from film budgets by complying with the strenuous requirements of the treaties.

The way treaty co-productions work is relatively simple: As long as a movie production spends a certain amount of its budget in each country -- usually at least 20% -- and complies with minimum thresholds for cast and crew, it may call itself French or Italian (or whatever nationality it happens to be) and qualify for that country's financial aid.

Because Bleiberg did postproduction work on "Band" in France, the film obtained a subsidy from the French government based on ticket sales. Bleiberg couldn't use the money directly to fund production, but it was a major incentive for French investors to help finance the film.

Similarly, Myriad Pictures' "Death Defying Acts" (the Weinstein Co.), with Catherine Zeta-Jones and Guy Pearce, could access both British and Australian subsidies, even though it was filmed entirely in England, because of a treaty signed between those two countries. In this instance, postproduction was done in Sydney, according to Myriad CEO Kirk D'Amico.

Most of the leading Western filmmaking nations have signed multiple treaties. European countries together have entered into more than 50 such pacts, and insiders estimate that Canada alone has 54 of them -- more than any other nation.

Each treaty has different requirements, and over the past year, several countries have scrambled to change those requirements to make the deals more equitable.

Great Britain, in particular, has tightened the rules governing what qualifies as a treaty co-production after seeing a huge outflow of money go to movies that were only nominally British. Whereas it previously mandated that only 20% of a movie's budget had to be spent in the U.K., that figure has now doubled.

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