2005: A Year in Progress

Ted Sheehy, the Ireland Correspondent of Screen International & Screendaily.com looks at the year in pictures.

The year 2005 began with a degree of optimism for the film production sector in Ireland. In December 2004 the Minister for Arts, Sport and Tourism, John O'Donoghue had announced an 18% increase in the Irish Film Board's budget for the year ahead. The overall increase, to €14m, included a 20% rise in the Board's capital resources - from €10m to €12m - for production, development, and training. The cap on Section 481 investment in any one project had also increased to €15million as of January 1 and it looked as though a number of films would be made in Ireland in the first few months of the year.

January 1 was also the day the Revenue Commissioners took over responsibility for the Section 481 certification process from the Department of Arts, Sport and Tourism. The Department's remaining function regarding the tax incentive being to give authorisation to projects on the basis of cultural criteria. That the real work of scrutiny now lies with the Revenue may in time prove more important than it first appears. The Revenue is still in active pursuit of approximately €20million of Section 481 funds it is alleged were invested, mostly in the 1990s, in non-compliant productions. This ongoing investigation has played its part in determining the new pre and post certification guidelines published on the Revenue's website at the beginning of the year.

Another aspect of Section 481 usage was given legislative effect in the Finance Act in February when existing custom and practice was formalised in the following clause: "In order to ensure that the legislation providing for [Film] relief is in line with the conditions attached to the European Commission's recent State-aid approval of the relief, the condition that not less than 75 per cent of the work on the production of a film must be carried out in the State is being removed. This condition could already be waived by the Minister for Arts, Sport and Tourism. The restriction of financial arrangements under the scheme to those countries in the European Union or those countries with which Ireland has a Double Taxation Agreement is to be amended to allow for such arrangements for other countries in certain limited circumstances and subject to Revenue approval and monitoring."

In January the Minister for Arts, Sport and Tourism announced the appointment of the new members of the Irish Film Board, effective January 17. Two existing board members, director Alan Gilsenan and academic Margaret McCarthy MacIntyre, were joined for a four-year term by James Morris (Chair), Lesley McKimm, Kevin Moriarty, Tristan Orpen Lynch, and Kirsten Sheridan.

Morris is a founder of the Windmill Lane facility, The Mill in London, and TV3, of which he is non-executive chairman. McKimm and Lynch are producers with their own companies, respectively Comet Films and Subotica Entertainment. Moriarty is managing director of Ardmore Studios and Sheridan is a director (Disco Pigs) and screenwriter who received an Oscar nomination for the screenplay she co-wrote for In America.

Screen Producers Ireland (SPI) warmly welcomed the new appointees, particularly since it recognised the new board members' background in production, and believing that this would bring a practical reality to the policies and work programme of the board based on the individual direct experience in the sector of these individuals.

SPI Chairman Larry Bass said that the new board members took on their role at a critical time for the Irish film industry, when it required further support so Ireland can increase its share of the global film market. "Ireland is a tremendous location for both indigenous film makers and international productions, however we must ensure that we remain attractive. The IFB plays a critical role in assisting new Irish film talent to bring their ideas to the screen and through its international marketing role to promote Ireland abroad as a film location. We would hope that the new film board will give renewed emphasis and priority to ensuring that these policies continue to be successfully implemented."

This perspective was addressed when Minister O'Donoghue led a trade mission with IFB staff to meet US producers in New York and LA in February. The minister met with senior executives at Warner Brothers, Sony, Universal, Paramount, Disney and 20th Century Fox after which he proposed the appointment of an Irish film 'ambassador' in Hollywood. Speaking at a function attended by Colin Farrell and other Hollywood luminaries the minister said, "Attracting major film productions to Ireland is like attracting a major industry. This needs personal relationships so we have to look very seriously at placing a film ambassador in Hollywood.

Reflecting what he was hearing about Ireland's competitive position internationally and the negative dollar/euro exchange situation, the Minister said he was prepared to look at the issue of the cap on Section 481 investment in any one film, even though it was just recently raised by nearly 50%. "If you want to make high budget films the size of the cap could be the breaking point," he said. He was possibly also bearing in mind the findings of research produced during the campaign to retain the tax break which suggested that Section 481 was a net cost to the exchequer in years when high budget films were not made in Ireland.

The trade mission culminated in the announcement that a re-make of the children's classic Lassie, adapted and directed by Charles Sturridge, would commence production in Ireland and the Isle of Man in May.

While in America Minister O'Donoghue also met with Nicholas Clay, CEO of Avica, the Santa Monica-based digital cinema technology business that established its European headquarters in Thurles over a year ago. Clay was reported as saying that Avica intends to convert all of Ireland's 515 cinema screens to digital exhibition - at no cost to exhibitors - an ambition that was stated more fully in the company's press release on March 17.

In practical terms this would entail the installation of a digital projector for each screen together with the computing hardware and software capable of reception, decryption, and processing of each of the films delivered as 100gb files, via satellite, to each cinema site. It also entails the physical breaking through of new portholes from projection booths and wiring the new hardware into the existing house sound system.

At time of writing the entire premise seems to rest on the assertion that Avica has an agreement (but in principle only) with the suppliers of 80% for the film product in the Irish market - the American studios and major distributors. As far as the Dublin distribution trade is concerned there is no contract or deal in place, either to supply digitised product or to parallel supply the new digital and traditional film formats during the testing phase.

The production year got off to a reasonably promising start with the return in the new year of Element Films' Isolation (aka The Calf), a contemporary horror film set on a lonely farm in the depths of the countryside. Starring an international cast that includes Irish actors John Lynch and Ruth Negga, alongside Australian Essie Davis, Rumanian Marcel Iures, and English actor Sean Harris, Isolation is a co-production with UK companies The Bureau and Blue Orange Films, backed by Film Four, the Irish Film Board, TV3, Ingenious (S&L), Anglo Irish Bank (S481) and US distributor Lion's Gate.

Isolation was followed by the Grand Pictures co-production Dead Long Enough, a romantic comedy starring Michael Sheen, Angeline Ball, Jason Hughes and Douglas Henshaw, in which two Welsh brothers return to Ireland to relive a memorable summer of their youth. The film, which was shot in Donegal from mid-February, availed of the Film Board's regional production incentive and is co-financed by the Irish Film Board, the NIFTC, the Arts Council of Wales, and broadcasters RTƒ and HTV. The UK co-producing partners are Green Park Films in Belfast, and Boda Cyf of Wales.

In early February the first 'Low Budget Initiative' feature to have been green-lit by the Film Board in eighteen months began its shoot around Dublin. Brother Films' Studs is the feature film debut of Paul Mercier who adapted his own play of the same title for the screen. Brendan Gleeson heads the cast as the volatile trainer who takes over an amateur soccer team with a permanent losing streak. Backing for the project comes from the Film Board, TV3 and BVI (Ireland) who have pre-bought Irish theatrical and video/DVD rights. Studs is produced by Fiach and Cœ‡n Mac Conghail.

As illustrated by the examples above, all indigenous productions - excepting films financed by the Film Board's low budget initiative - need to raise a significant amount of overseas finance in collaboration with foreign co-producing partners. The UK is by far and away the greatest source for this finance. Much as this co-operation across the Irish Sea - and over the border or with the Isle of Man - has been growing in recent years, there remains a degree of uncertainty among producers in Ireland and the UK about the future of these arrangements following the introduction by the UK authorities of measures to stop the wholesale abuse of its incentives. The solution sought by the UK government, with another year now allowed for its working out, is a tax credit scheme that will deliver a higher net return to a film's budget, a simplification of the relationship between investor and producer, and a lessening of the need for intermediaries.

A factor in the UK/Ireland co-production model that has become increasingly evident in recent times is the amount of physical production Irish producers are bringing either north of the border or to the Isle of Man. Both places offer financial inducements and a degree of compatibility - depending on the project - with other sources of finance such as Section 481, Sale & Leaseback and the Irish Film Board. The trend might suggest that Irish producers, having rescued Section 481, are shooting their films outside the jurisdiction where the money is perhaps easier to find and easier to access. If this practice persists Section 481 will almost certainly become a net cost to the exchequer, in the absence of large scale incoming productions, unless the parallel strategy to develop an indigenous film production base and a strong offshore production service sector is reinvented.

The new production fund put in place last year by the Northern Ireland Film & Television Commission (NIFTC) has been particularly effective in drawing producer interest both from south of the border and across from Britain. However, The Secret Life of Words, starring Tim Robbins and produced by Almodovar's company El Deseo, located in Northern Ireland last December not because it was availing of the NIFTC fund but because the story is partially set on an oil rig and Belfast was the only place they found one they could use. The NIFTC recently introduced a low budget fund to finance feature films and it is developing a scheme to support individual screenwriters.

The practice whereby principal photography takes place in Ireland and post-production takes place in the UK has evolved into a template for virtually every film that makes use of both countries' tax incentives. For the Irish post-production sector this amounts to a structural defect in the Ireland/UK co-production model that has had a negative impact on Irish businesses. Discussions with the UK Film Council and regulatory authorities in the UK's DCMS have not resulted a resolution of this issue and it may be that without positive intervention the Irish post-production sector will see further closures in the year ahead.

One issue that has been addressed is the cash flow difficulty experienced by many productions during pre-production while legal and financial arrangements are being completed. The IFB has established a pre-production funding scheme for fully financed productions, offering a short term cash-flow facility up to a maximum of €150,000 to productions backed by the Board. A total of €300,000 has been set aside for this Revolving Pre-Production Fund and pay-outs over that amount will only be possible when earlier loans have been repaid. The maximum period of a loan will be eight weeks and producers will have to pay an administration fee of 1.5% which will be added to the fund.

Additional measures introduced by the Film Board this year include an increase in the threshold for development loans from €75,000 to €80,000 per project, with the base amount available to writers increased from €7,500 to €10,000; retention of the pilot scheme to support regional production as the Regional Film & TV Fund; and an 18% funding increase for the Frameworks animation scheme run in conjunction with the Arts Council.

The Film Board has also worked with the Arts Council to establish a new documentary production fund entitled 'Documenting the Arts'. The fund is intended to finance five or six new documentaries per year. A maximum of €90,000 will available per documentary and the Board's involvement will be triggered by broadcaster pre-sale or production finance, the first form of automatic production funding offered by the agency.

Operating in two funding stages the Arts Council may, firstly, provide an award of up to €40,000 that can be used to fully fund a project and or, secondly, the Arts Council award may be used as part-finance and, given broadcaster commitment, trigger automatic funding from the Board of up to €50,000 per project. Applications for Arts Council funding will be assessed in one round per year, while applications for IFB funding will be processed year round. The deadline for first-stage Arts Council applications is 7 June. FilmBase will administer the new fund on behalf of the Arts Council.

It is thought that the now overdue Programme Fund to be administered by the Broadcasting Commission of Ireland (BCI) may be accessed by 'Documenting the Arts' projects. Established under legislation brought in in 2003 and underwitten by 5% of the national TV license fee revenue there is as yet very little information available from the BCI on how the fund will operate although it is expected to make a significant impact on the independent television production sector. Having been on the drawing board for roughly two years there is a worry that if the fund is not carefully phased in it could have a detrimental effect on the sector, possibly inflating labour, facilities and service costs.

One of the purposes of the BCI fund is to provide additional support for Irish language programming. This should bolster the not inconsiderable commissioning role already played by TG4 with a comparatively small budget. It has been argued both by SPI and IBEC that the station needs significantly increased funding if it is to continue to be able to commission new and innovative programming with more realistic pricing for the programmes it commissions. The manner in which TG4 will operate independently of RTE will be decided during the year ahead.

The departure in July of Film Board CEO Mark Woods was announced as Ireland on Screen went to press. His time at the Board was marked by a seeming change, in emphasis if not policy, whereby projects being financed or co-financed by the Board had to have sales agents and/or distributors attached. The counter argument to this approach is that the Board's remit is as much cultural as it is industrial and that the agency should take more of a leading role in supporting indigenous film production.

It seems likely that this debate will play on for some time, perhaps even after the relatively new Board finds a new chief executive. During that time there will be the premiere of Neil Jordan's Breakfast on Pluto, the most anticipated film backed by the Board during Woods' time in office. Involvement in Pluto was, arguably, an easy decision for the Board but for the extent of the financial commitment that, at over €1million, is believed to be the largest ever made by the agency. Perhaps, therefore, it is in the production background to other imminent but smaller films like Short Order, Studs, and Isolation that the Irish film industry may in time see the practical results of the Board's perceived change in direction.

Recent Irish Film Board feature film production loan offers

31/02/2005

The Wind that Shakes the Barley, Element Films, Director: Ken Loach, Writer: Paul Laverty

31/11/2004

32A, Janey Pictures, Director/Writer: Marion Quinn
Studs, Brother Films, Director/Writer: Paul Mercier

31/10/2004

The Speckled People, Writer: Hugo Hamilton, Director: Neil Jordan
Shoot the Crow, Rubicon Films, Writer/Director: Colm McManus
Lingling, Zanzibar Productions, Writer/Director: Paddy Jolly
Tillsonburg, Subotica Entertainment, Writer: Malachy McKenna, Director: John Lynch
Rough Music, Great Western Films, Writer: Patrick Gale
Sleeping Dogs, Paradox Pictures, Writer/Director: Gerry Leonard

31/09/2004

Tara Road, Ferndale Films, Director: Gilles MacKinnon, Writers: Shane Connaughton, Cynthia Cidre

31/08/2004

The Yasmin Pearl, Fantastic Films, Writer: Colm McCarthy / Rob Cawley
Son, Janey Pictures, Writer/Director: Marion Quinn
Twist of Fate, Writer: Gerard Mannix Flynn, Director: Aisling Walsh
The Front Line, Wide Eye Films, Writer/Director: David Gleeson
Happy Ever Afters, Comet Films, Writer/Director: Stephen Burke

31/07/2004

Short Order, Igloo Films, Director/Writer: Anthony Byrne
Pavee Lacken, An L‡r Films, Director/Writer: Perry Ogden

31/06/2004

Tara Road, Ferndale Films, Writers: Cynthia Cidre, Shane Connaughton, Director: Gillies MacKinnon

31/05/2004

Isolation (aka The Calf), Element Films, Writer/Director: Billy O'Brien
Dead Long Enough, Grand Pictures, Writer: James Hawes, Director: Tom Collins
Johnny Was, Borderline Productions, Writer: Brendan Foley, Director: Mark Hammond

31/04/2004

Headbanger, Wildfire Film and Television, Director: Robert Quinn, Writer: Ronan Carr
Breakfast on Pluto, Parallel Film Productions, Director: Neil Jordan, Writer: Pat McCabe

31/03/2004

In Like Flynn, Subotica Entertainment, Writer/Director: Niall Heery
The Mighty Celt (aka Valhalla), Treasure Entertainment, Writer/Director: Pearse Elliot

31/01/2004

Turf, Grand Pictures, Writer/Director: Shay Leonard
In Like Flynn, Subotica Entertainment, Writer/Director: Niall Heery
Studs, Brother Films, Writer/Director: Paul Mercier

Ted Sheehy is Ireland Correspondent of Screen International & Screendaily.com
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