Czech manufacturing sector on ‘brink of precipice’ after stimulus freeze

The international shooting market in the Czech Republic is “on the brink of collapse,” says Vratislav Slajer, head of the country’s main industrial group, Assn. by audiovisual producers.

Talking to industry peers on Sunday at the Karlovy Vary Intl. Film Festival, Czech producers warned they would see the looming loss of more than a decade of progress in bringing in foreign film work – and the prospect of seeing billions flow to other countries.

The Czech government has suspended film production incentives this year, citing a spending crisis caused by the need to bail out businesses hit by COVID losses and take in over 300,000 war refugees from Ukraine.

But, says Slajer, “it’s a false argument.”

On the one hand, booming film productions would offer the Ukrainians many jobs, he says. “We can help solve the crisis – we can bring in more money.”

What the government has lost sight of, he adds, is how stimulus leads to high returns: “It’s an investment. It’s not like a grant or a donation. If you invest more, you get more back.”

Pavlina Zipkova, Director of the Czech Film Commission, echoed this sentiment and pushed for a strengthening of the sweetener system.

“Production incentives are an essential part of the eco-film system, without which we in Central Europe lose competitiveness,” she says. “It’s that simple. Despite the tough times, we’re still hoping this fight will lead to the opening of the Production Incentive Program soon.”

Over the past year, incentives have fueled record profits, with local production companies generating an “incredible” revenue of around $505 million and prestigious shoots such as Netflix spy action franchise The Gray Man, Amazon fantasy Wheel of Time, the action film Wheel of Time, Extraction 2, and Season 2 of Carnival Row are all major Czech filming ongoing.

With its inflated budget of chases, explosions and gunfights filmed on the streets of Prague, The Gray Man alone spent around $105 million over its 91-day shoot, according to the producers’ association, while Wheel of Time spent 185 Dollar spent millions and “Carnival Row” around $164 million.

These drives employed hundreds and gave a great boost to the Czech economy at a time when it was just reopening to international business.

When these projects settled on the Czech Republic, the treasury for a 20% rebate on foreign spending there was about $33 million a year, although production companies have been able to lobbied for significant increases in the fund in times of strong demand.

In fact, $54 million would be a more realistic annual investment in rebates, Slajer says — and legally locking in the fund so it can’t suddenly be suspended overnight.

“It’s a broken system that really doesn’t work,” says Slajer.

Now, with no incentives available for the foreseeable future, big shoots are canceling plans to flock to the Czech Republic.

While the rest of Europe eagerly competes for production, the Czech Republic loses key production every month, producers say, citing “The Devil in the White City,” executive produced by Martin Scorsese and Leonardo DiCaprio, Amazon’s “Patriot,” Season 3, HBO Max sci-fi series Dune: The Sisterhood, prequel Hunger Games starring Jennifer Lawrence, Lionsgate actioner Shadow Force starring Kerry Washington, and HBO intrigue Londongrad starring Benedict Cumberbatch.

Everyone looked at the Czech Republic, but has now been ignored, says the Czech Producers’ Association.

With neighboring countries like Poland giving 30% rebates to foreign production and Slovakia 33%, it’s clear that companies will head for greener pastures if the Czech government can’t restore incentives to compete, say local industry leaders.

https://variety.com/2022/film/news/czech-republic-production-incentives-4-1235308599/ Czech manufacturing sector on ‘brink of precipice’ after stimulus freeze

Charles Jones

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