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European Commission revises rules for state-aid support for films

Published last week, the European Commission’s new Cinema Communication 2013 (the “Communication“) broadens the scope of activities in connection with the creation of films and other audio-visual works which may attract state-aid in the Member States.  The old rules, which were published in 2001, only permitted state-aid for production related activities, which the Commission reflected could risk “stimulating the supply of audiovisual content without ensuring that the resulting audiovisual work is properly distributed and promoted.”  Following the Communication, the rules now cover all aspects of a project, from development to exhibition.

Unless the project is a co-production involving two or more Members States (for which the limit has been raised to 60%), the Communication still requires Member States to limit state-aid to a maximum of 50% of a project’s production budget.  However, certain “difficult audiovisual works” and co-productions involving certain countries are excluded from these limits.  

Under the new rules, Member States’ requirements dictating the level of expenditure in the territory granting the aid must not exceed 160% of the aid amount granted (or 80% of the production budget).  Additionally, requirements specifying the extent of production activity in the relevant territory must not exceed 50% of the project’s production budget.

To ensure the preservation of the resulting cultural works and the EU’s film heritage, Member States will be required to encourage and support producers to create a depository for copies of all state-aided productions.  Furthermore, in return for fair remuneration, the resulting work should be made available for certain non-commercial purposes after a specified period of time, provided the normal usage of the work is not compromised.

Member States will be required to harmonise their existing state-aid schemes with the Communication within the next two years.

It should be noted that the rules set out in the Communication expressly exclude measures in connection with state-aid for games, which will continue to be addressed by the Commission on a case-by-case basis.

The full text of the Communication can be found here.

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