Czech Production Sector on 'Edge of Precipice’ Following Suspension of Incentives

Hollywood productions are unlikely to shoot in the Czech Republic unless rebates are restored, say worried local producers.

Czech Production Sector on ‘Edge of Precipice’ Following Suspension of Incentives

The market for international shoots in the Czech Republic is “on the edge of a precipice,” says Vratislav Slajer, the head of the country’s main industry group, the Assn. of Audiovisual Producers.

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

The Czech government suspended film production incentives this year, citing a spending crisis brought on by the need to rescue businesses hit by COVID losses and to accommodate over 300,000 war refugees from Ukraine.

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

Booming film productions would offer lots of jobs to Ukrainians, for one thing, he posits. “We can help solve the crisis – we can bring in more money.”

What the government has lost sight of, he adds, is how incentives bring in rich returns: “This is an investment. It’s not like grant money or a donation. If you put in more, you get back more.”

Czech Film Commission director Pavlina Zipkova has echoed the sentiment, urging a boost to the sweeteners system.

“Production incentives are essential part of the eco filming system, without which we lose competitiveness within Central Europe,” she says. “It’s as easy as that. Despite the hard times we still hope this fight will lead to opening the production incentives program at the soonest.”

In the past year, incentives have driven record profits, with local production companies having seen an “incredible” revenue of some $505 million and prestigious shoots included Netflix spy action franchise “The Gray Man,” Amazon fantasy “Wheel of Time,” actioner “Extraction 2” and season two of “Carnival Row” all running major Czech shoots.

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

These shoots employed hundreds and gave the Czech economy a major shot in the arm at a time when it was just opening up again to international business.

When those projects opted for the Czech Republic, the kitty for 20% rebates on foreign spends there was roughly $33 million per year, although production companies have been able to lobby for significant bumps to the fund when there’s heavy demand.

In fact, $54 million would be a more realistic annual investment in rebates, Slajer says – and codifying the fund into law so that it can’t be suddenly suspended overnight.

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

Now, with zero incentives available for the foreseeable future, major shoots are cancelling plans to come to the Czech Republic in droves.

With the rest of Europe eagerly competing for productions, the Czech Republic is losing major ones every month, say producers, 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 with Jennifer Lawrence, Lionsgate actioner “Shadow Force” with Kerry Washington, and HBO intrigue “Londongrad,” starring Benedict Cumberbatch.

All were looking at the Czech Republic but have now passed it over, says the Czech producers’ association.

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