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Italian Film & TV Orgs Say Production Is Grinding To Halt Due To Uncertainty Over State Funding & Tax Credits

Italian film and TV orgs will hold an emergency press conference in Rome next week to discuss the damage being done to their sectors by uncertainty over the future of direct funding and tax credits.

The meeting on April 5 in Rome’s Cinema Adriano will gather the members of 14 professional bodies including filmmakers’ org 100 Autori, producer groups Anica and AGICI, Cartoon Italia and the actors’ association Unita.

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“The first quarter of 2024 saw an abrupt halt in film and audiovisual production, due to uncertainty and the continued delay in the implementation of public support measures for the sector,” said the film and TV orgs in a statement announcing the conference.

Italy’s right-wing government has been making noises for months about its reform of the country’s Cinema Law, first mooted prior to its arrival in power in 2022.

The legislation covers direct film and TV funding, as well as the 40% tax credits for film and TV series, which have put Italy back on the map as a production hub in recent years.

Culture Minister Gennaro Sangiuliano said back in October that public spending on the tax credit had ballooned from $494M (€423M) in 2019 to $907M (€841M) in 2022, and that it needed reining in.

He questioned how the scheme had helped finance a number of local, big budget box office flops as well as the fact that the credit had been used for seven-figure pay-outs for directors. He suggested the latter should be removed as an eligible cost.

Further potential changes talked about in the press by Culture Under-Secretary Lucia Borgonzoni include a cut in the tax credit from 40% to 30% for international productions unless they feature an Italian director, screenwriter or actor.

She has also suggested that there could be changes to spending caps as well as other tweaks for local companies, linked to their size and trackrecord.

None of these changes are set in stone yet but lack of clarity over what lies down the road has set the local film and TV biz on edge.

“From a situation of full employment and strong growth in all segments of the supply chain, we are now faced with a real emergency with many productions postponed or cancelled,” the orgs’ statement continued.

“Unions indicate that employment levels are plummeting, with many workers forced to resort to unemployment benefits (NASPI) and many sound stages empty except for some foreign productions.”

International productions are also reportedly thinking twice about heading to Italy. Local media reported in October that Pablo Larrain’s biopic Maria Callas starring Angelina Jolie moved to Hungary, having originally been set to shoot in Italy.

Next week’s press conference has been bannered “Vogliamo Che Ci Sia Ancora Un Domani” (We Want There Still To Be A Tomorrow) in reference to Paola Cortellesi’s hit C’e Ancora Domani (There’s Still Tomorrow).

Anica president Benedetto Habib told Deadline that the aim of the meeting was to emphasize the economic and cultural worth of Italy’s film and TV biz – which is made up of roughly 9,000 companies and employs 65,000 people directly – and the urgent need for clarity around the future shape of state funding.

“We’re favorable to this reform – we’ve submitted lots of proposals to the ministry as far back as 2021 – but we need visibility very quickly because the market is blocked without clarity on what support is available,” said Habib.

“We need this for production to start up again at a time when it’s already being hit by less investment from platforms and broadcasters. We know there will be changes to the tax credit, but we have no clue yet what they’ll be, it’s impossible to start up again with this level of incertitude.”

“It’s the same for international productions. They won’t come if there is no certainty… It’s become very competitive. In the U.K., they’ve just announced new tax relief which copies ours and our system is not even up and running. It’s terrible shame. We had the double strength of good supports and strong know-how and we’re blocked on both fronts.”

Habib said that for now the entire film and TV chain was in the dark on the reforms, adding that he had no idea over whether the reduction in the tax credit for international productions would be enacted.

“Nothing has been confirmed. These are all declarations, declarations that often are not helpful to the cinema world,” he said. “We’d like to sweep away all these declarations with some clear guidelines so we can start production up again.”

Culture Under-Secretary Borgonzoni has been invited to the April 5 meeting, and Habib said he hoped there would be open dialogue between all the parties present.

He expressed some optimism that the government would listen on the basis of Anica’s recent experiences around the reform of the so-called Tusma ((Testo Unico sui Servizi Media Audiovisivo)  Media Law, governing broadcaster and streaming content investment obligations.

Alarm bells have been rung over the reform due to a reduction in the streamers’ investment obligation in European content, from 20% of local turnover to 16%, as well as the removal of protections around IP.

Habib noted, however, that Italy’s independent producers had won some important concessions, such as that within the 16% quota, 70% of the investment must be in Italian content, against 50% of the 20% quota in the past.

“We did a first intervention on Tusma… the government listened to us and took in what we asked for. We were able to have a sub-quota for Italian works, which worked out a bit higher than what we had before and we also got a bit more for cinema,” he said, noting a slight rise in streamer cinema investment obligations from 2% to just over 3%.

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