In March 2021, after months of industry talks, Spain Prime Minister Pedro Sanchez unveiled a multipronged plan to bolster the country’s audiovisual sector. Four months later, while visiting the U.S., he upped the ante by vowing to convert Spain into the “Hollywood of Europe.”
His dreams appear to be — by many measures — coming to fruition. Insiders chalk it up to the new public-private collaboration via what has been dubbed the Spain Audiovisual Hub plan, which treats the industry, finally, as a strategic one that isn’t dependent on subsidies — as critics have long barked — and becomes something that can play an important role in the country’s post-pandemic recovery.
“The implementation of the Spanish government’s Spain Audiovisual Hub plan is crucial for the Spanish industry since it arose to meet the historical demand of the sector,” says Elisa Garcia Grande, executive director of ICEX-Invest in Spain, a division of the country’s export and investment board. “For the first time, it concedes the industry’s strategic role within the Spanish economy.”
Launched in March 2021 with a public investment of 1.6 billion euros ($1.56 billion) through 2025, the Hub has been working on four key areas: attracting foreign investments and shoots; improving financial and tax instruments; training talent, with a special focus on women; and implementing regulatory reforms and eliminating administrative barriers.
The plan’s stated objective is to increase film and TV production in the country by 30 percent by 2025 to solidify Spain as both a production leader and an attractive location for investment, talent and international shoots.
Included in these measures is the launch of the Spain Audiovisual Bureau to answer questions and facilitate collaborations. The Hub’s multilingual website is averaging about 50,000 unique monthly visitors since its May launch, according to Garcia Grande.
“This government is much more aware of the benefits of the film industry than previous governments,” says Peter Welter Soler, a partner in Spanish production services outfit Fresco Film and current vice president of the national producers association Profilm, a key mediator between the government and the industry.
He suggests that the fact the AV industry kept working during the pandemic contributed to the new vision of its strategic advantage in a country traditionally reliant on tourism, real estate and agriculture. The new perspective sees the industry as one “that can bring a lot of benefits, jobs, money and well-being to the society in general,” he says.
The flurry of activity among streaming platforms in Spain over the past decade has of course not been lost on the powers that be. Some landmark moments include HBO’s Game of Thrones shooting in Spain beginning in 2014 (its prequel, House of the Dragon, more recently shot there); Netflix debuting its first European production hub in Madrid in 2019; the international success of such Spanish series as Money Heist; and The Crown using Spain as its main non-U.K. location beginning with season three.
By the Numbers
“From the point of view of a foreign, or American, audiovisual company, the launch of this plan, with such significant economic backing, represents an unrivaled business opportunity,” Garcia Grande suggests.
The country’s tax incentives got a huge boost in 2020. Spain now offers incentives for international shoots via tax rebates of up to 30 percent on the first 1 million euros ($969,890) expenditure and 25 percent after that, with a minimum spend in Spain of 1 million Euros (less for animation and visual effects services). Other regions have their own systems: for example, rebates in the Canary Islands on the same minimum spend sit at 54 percent on the first 1 million euros and 45 percent after. And in the northern region of Bizkaia, where Game of Thrones filmed, the local film commission just unveiled plans expected to go into effect Jan. 1 to up their regional incentive to a whopping 35-70 percent depending on characteristics of the project.
Representing more than a threefold jump, incentives now cap out at 10 million euros ($9.75 million), compared with the previous 3 million, not exceeding 50 percent of production costs. In the Canaries, the cap is 18 million euros ($17.5 million). Productions must be local or attached to a local service company that claims the incentive within six months of the end of the tax year in which the last production expenditure was incurred. The incentive is generally paid between 6 and 18 months after the end of production in Spain.
Welter Soler calls the incentive cap rise “a big achievement” but still “not good enough.” He describes Spanish companies losing out on capturing high-end, big-budgeted TV shows for their entirety. “It’s proved economically that for every euro the government pays out in taxes, the return is at least three, four if not five euros in different concepts,” he says. “Why would you put a cap on that?”
Babieka Films producer Denis Pedregosa agrees. “Without a doubt, we need to increase the caps on the incentives,” he says. “We’ve had many big-budget productions not coming to Spain for this reason, so this is the most urgent thing to improve.”
Teresa Azcona, G.M. of Spain Film Commission, affirms, “We always ask for more.” But she also insists that without the incentive increase, many productions, such as The Crown, might not have returned as often. She also highlights that Spain is unique in that there is no country or volume cap on incentives, meaning that there are no restrictions on productions that film in Spain and access incentives any given year.
Let There Be Light
Among other characteristics that make the country attractive, ICEX highlights the fact that filming in Spain can be about 20 percent cheaper than in other “top tier” European locations and that talent rates are generally negotiable. A broad diversity of easily accessible locations also make Spain exceptionally attractive; it’s hard to beat its Mediterranean lifestyle and climate, with 3,000 hours of sunshine a year.
“Productions have always come to Spain fundamentally for its locations,” Azcona underscores, citing everything from spaghetti Westerns to Doctor Zhivago to Lawrence of Arabia. And, she adds, the country boasts other attractive factors like the growing local technical and creative base of professionals, how well-prepared Spain is to host visitors thanks to its existing tourism industry and the country’s high level of safety and public services.
On an unnamed British series now shooting an entire season in the Canary Islands and accessing the rebates, Pedregosa describes the added benefits: “The local governments are offering locations, helping with permits, and now that the visa situation with the U.K. has been solved, it makes life easier,” he says, referring to a bottleneck in visa applications for U.K. cast and crews following Brexit. “This means they can achieve a top-level quality series for a fraction of the cost, and this is also applicable to national productions.”
There’s also a new framework in place to fast-track visas for AV professionals as well as to facilitate permits across regions. U.S. professionals, for instance, no longer need a work authorization or visa to stay in Spain for up to 90 days, and industry-specific visas and long-stay permits get special processing.
Studios Ramp Up
A traditional complaint about shooting in Spain in the past was a lack of studio space. That also has changed thanks to the growth of Madrid Content City and the recently reopened Ciudad de la Luz (City of Light) Film Studios complex in Valencia. According to Azcona, various other, smaller studio projects are in the works across Spain.
Madrid Content City, managed by development and production studio Secuoya Studios — current president James Costos is the former U.S. ambassador to Spain and a former vice president at HBO — hosts Netflix’s Spain production hub, including interior shoots for Money Heist. The facilities now house 10 studios ranging from 3,937 to 6,562 square feet and nearly 40 feet of working height, all equipped with complementary facilities, including 23 suites for postproduction.
Ciudad de la Luz opened back up for business in July (the facility was shut down in 2012 after the European Commission found impropriety in the regional government’s subsidies for the studio). Now in launch phase, the complex boasts 120,000 square feet of soundstages, 120,550 square feet of workshops and storage and 36.5 acres of backlot equipped with 86,000 square feet of water tank. There is also six air-conditioned soundstages and more than 150 miles of nearby coastline with 300 sunny days per year.
“To attract big foreign shoots, Ciudad de la Luz is one of the best assets we have,” Pedregosa says. “We have shot there many times, and the response from international producers has always been phenomenal.” He predicts the local government in Valencia will offer further incentives that will help offset the extra cost of traveling crews.
According to Ciudad de la Luz G.M. Antonio Rodes, the studio is in the process of negotiating budgets and conditions on various “medium and large productions,” both movies and series. “Some international productions shot here in our previous phase,” he says. “Now the market is much more powerful, and with this infrastructure we can aspire to host the most ambitious and largest productions.”
Spain at AFM
Rodes was set to be a part of the Spanish delegation attending AFM, where the country will promote itself at Location Expo under the motto “Come Film in Spain: You’ll Feel at Home.” Spain also is organizing an AFM event called “Showbiz the Spanish Way” on Nov. 3 on the Santa Monica Pier. According to Juan Luis Gimeno, Spanish Trade Commissioner in Los Angeles, the event will bring together representatives from the Spanish industry with U.S. studio executives, members of the Academy of Motion Picture Arts and Sciences and the Television Academy, talent agencies, investment funds and the media.
At least a couple of Spanish sales agents will also attend AFM. Film Factory is bringing 15 titles, including horror films The Communion Girl from director Victor Garcia and Mar Targarona’s The Cuckoo’s Curse, starring Belén Cuesta (Money Heist). The company also has Colombian Oscar submission and San Sebastian Golden Shell winner The Kings of the World and local box office sensation Prison 77. Filmax, meanwhile, is bringing market premieres including Alex de la Iglesia’s latest, Four’s a Crowd, and the period epic Irati, the People’s Choice Award winner at the Sitges Fest; the Toronto title Stories Not to Be Told, from director Cesc Gay; and the crime thriller Lost & Found, featuring another Money Heist star, Alvaro Morte.
Morte will be on hand at the Nov. 3 event, as will actor Eric Masip (Veneno, Alba) and Carla Simon, director of Berlin Golden Bear winner Alcarras, Spain’s Oscar submission.
This story first appeared in The Hollywood Reporter’s Nov. 1 daily issue at the American Film Market.