PRODUCING IN RUSSIA: NAVIGATING INTERNATIONAL CO-PRODUCTIONS FROM IP TO DELIVERY. ROSKINO CONFERENCE AT AFM 2019
On November 10, ROSKINO in association with the Producers Without Borders held a conference on Producing in Russia: Navigating International Co-Productions from IP to Delivery.
The AFM panel in Santa Monica featured top industry professionals, including Steven Beer, legal counsel and managing partner of Franklin, Weinrib, Rudell & Vassallo P.C. representing leading entertainment industry content providers; Steven Adams, producer, President of Alta Global Media, former executive producer of the French visual effects company BUF (Avatar, Life of Pi, Thor) and partner of Buffalo 8 productions. The event was presented by ROSKINO CEO, TV1 anchor Katya Mtsitouridze and Co-Chair of the PGA International Committee, Producers Without Borders founder Kayvan Mashayekh.
Kayvan Mashayekh, Producers Without Borders founder
The most exciting thing about the conference was being able to educate the people at the AFM about the potential for storytelling in Russia, to bring forth the more positive aspects of our relationship and find a common denominator in storytelling. In fact, the matter is that in today’s world we are looking for a way to connect with our audiences through a relationship with the content you are creating. And Russia is pregnant with so many stories, from its history and its past, that a lot of people outside of Russia do not know about. It is a great way to build a bridge and connect to new audiences and find a way to work with Russian counterparts in finding stories to tell. At the end of the day, it is all about trust and working with partners you trust. ROSKINO is a company that goes back for over 95 years. All this time it has been around, promoting Russian cinema around the world. And it has a very high profile due to the efforts of the new team. It is an ideal base to start creating an avenue of trust between the countries. International productions will start using the recent rebate system and find a way to establish contacts and connections that turn out to be a real thing, then technical and legal issues be sorted out.’
It was during the AFM that the Russian Prime Minister Dmitry Medvedev signed a decree on ‘cinema organizations providing services for international audio-visual content production on Russian territory’ that allows international partners to get back up to 30% or even 40% of production costs incurred in Russia. The panellists discussed the new film subsidy system in much detail, dwelling on co-production options from the perspective of the Russian version of rebates.
The legendary producer Avi Lerner, the person behind Rambo and The Expendables franchise, was a guest of honour at the panel. He shared some personal insights on security arrangements for future contracts:
‘In my experience, the best way of dealing with financial issues in Russia and other countries with volatile economies such as Bulgaria or Romania is to get a bank to step in to leverage the project. If there is a bank with real money things tend to work out. Not the government, with all due respect for the Russian, Bulgarian, or Rumanian public institutions. I don’t believe the government should play a role. A bank should step in, get the money and transfer it back to the global producer. Then the project can take advantage of the rebate and make a movie for $6 million instead of $10 million. Especially since the rouble is coming down, which is another advantage. That’s the way you should do it, only based on real money.’
The discussion touched upon several relevant issues such as the characteristic aspects of filming in Russia, the experience of international co-productions, and providing appealing content for global audiences.
Steven Adams, Producer, Alta Global Media President:
‘I thought the conference was really exciting. The idea of an incentive in Russia is, I think, going to send reverberations around the world. It will be interesting to see how banks react to it, how the studios and networks react to it, and how production companies move forward. But I think all these questions will be answered in a very short time. The initiative is interesting and we are soon going to discover how it works out in Russia. Under the current system only the Russian partners can get subsidized, not the international studios. But there are different ways to look at it. If you get a rebate you can either lower your budget and put the money into the budget, or the Russian holding company can disperse the money to a foreign partner or a studio.’
Steven Beer, legal counsel, managing partner at Franklin, Weinrib, Rudell & Vassallo P.C:
‘I work on a lot of co-productions and I was very pleased to participate in the panel. The new production incentive opens up tremendous opportunities, it has put Russia among the top jurisdictions for co-productions. The tax incentive means an ability to collaborate with qualified production companies for worldwide projects. So, the decree is a very significant step to become more competitive with other countries that have tax incentives. Of course, the culture of collaboration needs to change, including the ability for international financing, so that banks can leverage the tax incentives and cash flow the productions. That’s something that needs to come down the line and I’m looking forward to playing a role in that.’
The tax rebate system is only a first step as there are also a number of legal issues to bring to a common denominator. Alexey Ageyev, Executive Vice President for Scripted Content at TNT network, was most enthusiastic to find a solution:
‘International talents are normally entitled to royalties, that is, to a percentage of box office revenues. In Russia the system only works for A-level stars, and the same rule applies to directors. In the US, on the other hand, everyone has to comply with certain rules that are very strict on certain guidelines, with the director entitled to future royalties under contract. In Russia there is no legal system to regulate this issue and it is very hard to get it into contract agreements. In order to solve the problem one has to go for an intermediate company which is a signatory to the Guild and has the right to make deals with the Guilds and manage intellectual rights for actors and directors. At this point we have to mirror the same conditions the intermediary promises to the Guilds, and it is not totally clear how this mechanism is going to work. But in order to set up efficient international co-productions we’ll need legal advice and experts that would be able to reconcile the global and the Russian content production systems.’
All panellists agreed that the implementation of the recent rebate initiative of the Russian government depends largely on building a relationship of trust between the future partners and the selection of qualified professionals for joint projects. At this point the panellists thanked ROSKINO CEO Katya Mtsitouridze for her long-term commitment and consistent efforts to keep the global film community informed about the recent updates in rules, regulations, and possibilities available in Russia.
Katya Mtsitouridze, ROSKINO CEO
‘Russia has unique filming traditions, unparalleled locations, top talent, and world class productions qualified to take part in international projects of any scale. Selecting the right partner while filming in a new destination is one of the key factors of success, or otherwise. I know of many co-production projects that ended up never being released. For instance, the amazing Tulpan by Sergey Dvortsevoy, winner of Un Certain Regard section in Cannes that never got a theatrical release due to an unresolved issue between the Russian and the German producers. Today the comprehensive database of ROSKINO includes over 100 Russian productions of all sizes and specializations. We go on monitoring the local market and are always in touch with the Ministry of Culture in order to keep our international colleagues updated on all Russian film-related news during important festivals and markets.’
The conference was attended by 150 industry professionals from around the globe, including Russian and international producers, sales agents, distributors, investors, representatives of insurance companies and trust funds.
The AFM industry program includes a variety of conferences, panels, workshops and presentations aimed at facilitating project development. They cover every aspect of content creation from financing and production to post production, marketing, and distribution. AFM 2019 identified several main trends that are likely to be relevant for the global industry over the next few years, including an increase in streaming platforms and the launch of rebate systems in new territories around the globe.
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