Definitions to be observed by Bord Scannán an hÉireann / Irish Film Board (BSÉ/IFB) Context
European Commission Communication document of September 2001 stated: “Aid intensity must in principle be limited to 50% of the production budget… Difficult and low-budget films are excluded from this limit. The Commission considers that under the subsidiarity principle it is up to each Member State to establish a definition of difficult and low-budget film according to national parameters”.
At a meeting with the European Commission in November 2005, the Audiovisual Directorate was asked whether there was anything preventing all films from small EU territories from being considered as difficult/low-budget in the context of interpreting State Aid rules. Commission representatives replied that it is entirely in the gift of a Member State to define difficult/low-budget films and acknowledged that it might be possible for all films in some Member States to be defined as difficult/low-budget.
Approach taken by BSÉ/IFB There are two applicable tests to determine whether a film is exempt from the normal State Aid rule: one based on a definition of a ‘difficult’ film and one based on a definition of ‘low-budget’. A film that passes either test will be permitted to receive State Aid at a level of more than 50% of its production budget.
In the great majority of cases, a film that complies with a definition of ‘difficult’ will also be a ‘low-budget’ film, and vice versa. But the two distinct definitions, and two tests, exist side by side to allow for ‘difficult’ films that require a higher budget, and for ‘low-budget’ films that happen not to comply with the definition of ‘difficult’ set out below.
Films seeking State Aid are those that are unable to raise production finance sufficient to cover their entire budgets from commercial sources. But a project may have difficulty raising finance simply because it is poorly conceived, badly prepared, or ineptly presented. An inability to attract funding is not in itself an adequate basis for defining a film as ‘difficult’ in this context, since there is no justification for using State Aid to support bad work. Where an exceptionally high level of State Aid is being sought, it is especially important to identify the reasons for the inability and establish a valid basis upon which a film can be considered ‘difficult’ and deserving of support.
BSÉ/IFB understands that the aim of State Aid, particularly when granted at a higher level, should be the production of films of quality which, for whatever reason, lack perceived commerciality while still at the project stage. To define a ‘difficult’ film, therefore, it is necessary to look behind the simple inability to attract finance and identify aspects of a film project that do not detract from its quality, but may reduce its appeal to sources of commercial finance. BSÉ/IFB considers that such aspects come in two types: non-commercial purposes behind the making of a film, and elements of a film’s overall package that represent an abnormally high commercial risk.
In order to define a ‘low-budget’ film, BSÉ/IFB has examined the budgets of all feature films made in Ireland during the period 2002-2008 in order to determine the minimum budget required to produce a film, with all costs fully paid, to a technical and professional standard that enables it to compete in the international theatrical marketplace. Films with production budgets below this threshold qualify as ‘low-budget’.
A Difficult Films A ‘difficult’ film is a film of high quality that, for one reason or another, faces severely limited prospects of attracting commercial finance for its production and/or of achieving wide commercial distribution.
In order to approve a film as ‘difficult’ BSÉ/IFB will need to be satisfied that the film project presented prior to production (a) will be realised to a high standard of technical, professional and artistic quality, and (b) faces difficulties for definable reasons in terms of its appeal to commercial financiers or distributors, or its potential to attract viable audience numbers.
Characteristics of such films may include:
Features minority language(s) predominantly
Expresses strong cultural / public service ethos
Illuminates history / civilisation / cultural traditions for the benefit of young people
Provides creative opportunities for individuals and organisations in areas of poor economic / social development
Provides creative opportunities for individuals and organisations under-represented in the film industry as a result of, for example, race, gender, sexual orientation, poverty, disability, geographical isolation, religious belief, political opinion
Contributes to the advancement of new technologies using limited financial resources
Is experimental in nature and entails a high level of creative risk
Creative initiators – director, screenwriter, producer – without track-record, making first or second feature film
Principal actors playing leading roles in a feature film for first or second time
Director is experienced and demonstrably capable of high-quality work, but market results of recent films denote his/her next work as high-risk in the eyes of commercial financiers
Concerns for authenticity, historical accuracy or other mark of cultural integrity prevent inclusion of marketable elements – notably ‘star’ casting – that could enable the film to secure more substantial finance from commercial sources
Being less than 70 minutes in length, no meaningful, commercial, theatrical market exists for the film.
It is possible that a film project would display one or more of the above without having the characteristics required for it to be designated as ‘difficult’ in this context. Accordingly, such designation will only be available when BSÉ/IFB certifies on the basis of all available information that a project:
is of a nature and quality that the Board considers to merit support; and
be made without a cumulative input of State Aids exceeding 50%; or
is unlikely to achieve significant distribution or exposure; or
is unlikely to achieve viable audience figures.
B Low-budget films Empirical evidence of indigenous production since 2002 shows that for a feature film to be made in Ireland – with all crew paid at award rates, with all completion and delivery costs counted in, and with no deferred fees – to a standard of physical production that enables it to compete in the international theatrical market, a production budget of €3 million or more is required.
Any Irish film produced with a production cost of less than €3 million, therefore, should be considered as ‘low-budget’ for the purposes of State Aid rules. BSÉ/IFB may periodically propose upward revision of this figure to take account of production cost increases.
NOTE – the Cinema Communication 2001, was updated by the Communication from the Commission on State aid for films and other audiovisual works in 2013. The 2013 Communication allows for 60% state aid for cross boarder production.