Czech manufacturing sector on ‘edge of precipice’ after incentives freeze

The market for international shoots in the Czech Republic is “on the brink of an abyss,” said Vratislav Slajer, the head of the country’s main industry group, the Assn. from audiovisual producers.

Speaking to industry colleagues on Sunday at the Karlovy Vary Intl. Film festival warned Czech producers they are witnessing the imminent loss of more than a decade of progress in bringing in foreign shoots – and the prospect of billions going to other countries.

The Czech government has suspended incentives for film production this year, citing a spending crisis triggered by the need to bail out companies affected by COVID losses and host more than 300,000 war refugees from Ukraine.

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

Emerging film productions would provide Ukrainians with many jobs, for example, 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 incentives yield rich returns: “This is an investment. It’s not like grant money or a donation. The more you put into it, the more you get back.”

Czech Film Commission director Pavlina Zipkova has echoed the sentiment and pushed for a boost to the sweetener system.

“Production incentives are an essential part of the eco-film system, without which we lose competitiveness in Central Europe,” she says. “It’s that simple. Despite the difficult times, we still hope that this battle will lead to the opening of the production incentive program at the earliest.”

In the past year, incentives drove record profits, with local production companies making “incredible” sales of some $505 million and prestigious shoots including Netflix spy action ranch “The Gray Man”, Amazon fantasy “Wheel of Time” , actioner “Extraction 2” and season two of “Carnival Row” are all running big Czech shoots.

With its outrageous budget for car chases, explosions and gunfights filmed on the streets of Prague, “The Gray Man” spent some $105 million on its 91-day shoot alone, the producers association estimates, while “Wheel of Time” Spent $185 million and “Carnival Row” some $164 million.

These shoots employed hundreds of people and gave the Czech economy a major boost as it just reopened to international business.

When those projects chose the Czech Republic, the pot for 20% off foreign spending was about $33 million a year, although manufacturing companies have been able to lobby for significant fund increases when demand is high.

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

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

With no incentives available for the foreseeable future, major shoots are canceling plans to flock to the Czech Republic.

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

All looked to the Czech Republic, but have now passed it by, says the Czech producers’ association.

With neighboring countries like Poland offering 30% discounts on foreign productions and Slovakia 33%, it’s clear that unless the Czech government can restore competitive incentives, business will continue to move to greener pastures, local industry leaders say.

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