Germany’s Film Funding Overhaul Vital for Studio Babelsberg and New Shingle

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A significant change in movie financing regulations in Germany is increasingly important for the domestic industry, especially for Berlin’s Studio Babelsberg, which is currently transitioning to new leadership as its former head of production, Henning Molfenter, establishes a new business venture.

In November, Studio Babelsberg named Joerg Bachmaier, a previous executive at Warner Bros., as their new CEO. Later in December, they welcomed Marcus Loges, an experienced industry professional and producer, to take over the role of managing director from Molfenter at Studio Babelsberg Motion Pictures.

The studio continues to be bustling, having recently churned out films like “The Light” directed by Tom Tykwer (which opened the Berlin Film Festival), Wes Anderson’s “The Phoenician Scheme,” and Robert Schwentke’s thriller “Control,” featuring James McAvoy and Julianne Moore. Kicking off the new year, they have three series productions in progress on their lot: the second season of Hulu’s “Nine Perfect Strangers,” a production for Disney+ Germany titled “Ten Percent,” and the fifth season of the popular local show “Babylon Berlin.

Nevertheless, it still encounters tough rivalry from nearby nations, which offer more enticing incentives for movie and television production projects.

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Despite this, it still struggles against fierce competition from neighboring countries that provide more alluring incentives for film and TV production.

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It’s still up against stiff competition from neighboring countries that have better deals for movie and TV productions.

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In spite of the challenge, it remains in a tough battle with neighboring countries that offer superior inducements for film and television productions.

The German movie industry is facing financial difficulties and an incomplete film funding revamp due to the recent government’s collapse. Fresh elections on February 23rd will determine the new government, which is anticipated to carry on with the reform and possibly implement additional incentives for the sector.

To effectively draw international film productions to Germany, it’s crucial that the recently formed partnership between Studio Babelsberg and Molfenter, known as Babelsberg Production Group, enhances its existing film funding structure.

In December and then again in February, the German government boosted two crucial financial aid programs: the Federal Film Fund (DFFF) and the Motion Picture Fund (GMPF). These enhancements raised the rebate rates on production expenses from 25% to 30%. However, Bachmaier and Molfenter emphasized that further action is required.

The primary incentive for project DFFF II provides funding for movies with a budget of €20 million or above, offering up to 30% of the production costs (with a maximum of €25 million). However, it’s important to note that this incentive requires the film to have a theatrical release, which does not encompass major TV and streaming productions.

The GMPF assists with both series and motion pictures financially, contributing up to 30% of their production costs. Notably, the maximum funding limits for series have been increased from their original amount to €20 million, while for films, they’ve been raised to €5 million.

The incoming administration is predicted to fulfill other proposed initiatives, such as the much-awaited 30% tax incentive scheme, which enjoys broad support, and a more contentious requirement for broadcasters and streaming platforms regarding investments.

According to Bachmaier, the latest updates about the incentive, notably the rise from 25% to 30% and the subsequent doubling of the GMPF caps, mark a significant advance in Germany’s film funding reform. This development has fueled optimism and swiftly influenced our discussions with both local and international production companies. In essence, this move clearly communicates that Germany is eager for business opportunities.

In the interim, the fund’s extensions provide “essential planning stability” for local film studios and production support services, as noted. We anticipate an increase in both domestic and foreign film production activities in Germany.

The studio is actively discussing possibilities for two global productions, along with multiple German movie and television ventures. Yet, progress hinges significantly on the speed at which new regulations and federal funding get approved, as well as how swiftly the incoming administration enacts the new tax credit, according to Bachmaier’s statement.

To keep Studio Babelsberg and Germany in the global spotlight, it’s crucial to have a strong tax break. This tax incentive should be competitive, with a rate of at least 30%, and it should be automatic, without limits. It needs to cover films, television shows, and streaming productions to attract big-budget projects.

Molfenter also applauded the recent increase in DFFF and GMPF: ‘Boosting the film and television incentive to 30% and lifting the GMPF cap for TV series from €10 million to €20 million sends a powerful message that will draw productions here swiftly.’

Before the recent increase in February, Molfenter had expressed concerns about the impact of the €10 million cap on streaming productions specifically, advocating for a raise to €25 million.

He stated that the initial 30% announcement was a positive start, yet it falls short of what’s required. Additionally, he emphasized that the obligation for theatrical release by the DFFF should also be eliminated.

Molfenter pointed out that a specific amount, either €150 million or less, has been eliminated from the budget; the intermediate amount, or the section in between, no longer exists.

The main part of traditional theater has mostly shifted towards online streaming, which is causing us to lose customers. That’s our challenge.

If we don’t take these essential actions, about 90% of what can be achieved in Germany might be forfeited, he stated. “We’re battling to preserve the remaining 10%. Despite the challenges, Berlin remains an attractive destination.

Improvements in incentives, such as the tax rebate, could resolve the current issue, Molfenter noted. “Once we’re able to make these improvements, we’ll be in a better position to vie for numerous additional productions. It’s only a matter of time before this becomes reality.

As a devoted admirer, I’ve had the privilege to contribute significantly as an executive or co-producer at Studio Babelsberg. Some of the most renowned productions I’ve been associated with include Steven Spielberg’s “Bridge of Spies,” Quentin Tarantino’s “Inglorious Basterds,” Wes Anderson’s “The Grand Budapest Hotel,” and Chad Stahelski’s “John Wick Chapter 4.” These remarkable projects have not only graced our screens but also left an indelible mark on the world of cinema.

He shared that his recently established enterprise will carry forward the business he’s nurtured for two and a half decades. The focus will be on delivering tailor-made solutions for each customer’s unique requirements, assembling suitable packages, and facilitating the production transfer to Germany.

Babelsberg Production Group provides an entry point to exceptional filming locations and skilled crews with extensive experience in both film and television. We also offer easy access to the vibrant city of Berlin, as well as taking advantage of all the federal and regional incentives available throughout Germany – a combination that truly packs a punch!

Based in both Babelsberg and Berlin, the Babelsberg Production Group offers services and joint production for international film and television projects filmed in Germany and Europe. This includes potential collaborations with Studio Babelsberg as well as other productions.

As a cinephile penning my thoughts post-discussion, it’s clear that things are on amicable grounds. The objective remains to continue gracing the hallowed halls of Babelsberg with cinematic magic. Leveraging their construction prowess and stage facilities, I’m eager to bring more films to life on these grand stages whenever the opportunity arises.

According to Molfenter, it seemed advantageous for him to establish a new company considering the recent changes in Studio Babelsberg’s ownership setup.

In 2022, U.S. company TPG Real Estate Partners acquired Studio Babelsberg from its previous owners Charlie Woebcken and Christoph Fisser. This studio is now under the umbrella of their Cinespace Studios division, which manages facilities in Atlanta, Chicago, Toronto, Wilmington, North Carolina as well.

Working independently as a producer provides more freedom and allows for a tailored approach to meet the unique requirements of global clients, Molfenter pointed out.

I believe the key to success lies in having a service company, based in Germany, that combines local knowledge with an understanding of U.S. and international filmmaking methods. This company should tailor its approach for each project, using creativity and out-of-the-box thinking to secure the best possible deals. In my opinion, this setup would best serve our customers. I find this independent structure more advantageous.

Customers frequently request unique options, and it’s been proposed that a fresh enterprise, distinct from Babelsberg, could meet these demands more effectively. This new entity would maintain the benefits of a large-scale production facility while catering to customer needs.

Molfenter is ready to lend a hand to projects spanning throughout Europe, however, they express a stronger interest in those based in Germany.

Instead of collaborating with businesses in cities like Prague or Budapest, we’re aiming to focus on bringing movies to Berlin and Babelsberg.

In the process of working on “Bridge of Spies” directed by Spielberg, Molfenter suggested and successfully proposed the Polish city of Wroclaw as an ideal location for filming. Interestingly enough, this city was also the hometown of Janusz Kaminski, the movie’s cinematographer.

Initially, there was apprehension that the production could take place entirely in Poland, but fortunately, the project stayed at Studio Babelsberg. In the end, scenes were filmed not only in Wroclaw, but also in Berlin, its surroundings, and on the studio’s own lot.

According to Molfenter, the team was valued for their creativity and courage in decision-making. He mentioned that although some suggestions might have appeared unconventional, especially from a financial standpoint, they were well received. This was because the producers respected these bold moves and placed their trust in the team.

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2025-02-13 09:49