Festival Finances

Berlinale's Balancing Act

  • Why it matters

    Why it matters

    Film festivals are a difficult business and most rely on sponsoring and subsidies for more than half of their income.

  • Facts


    • Film festivals generally receive higher subsidies in Europe while an countries pay higher subsidies for film festivals while in the United States.
    • Europe’s biggest film festivals are Cannes, Venice and Berlin.
    • The Berlin film festival’s budget was €24 million in 2017.
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Model Toni Garrn poses on the red carpet for the screening of the movie ‘Django’, during the opening gala of the 67th Berlinale International Film Festival in Berlin
Can the Berlinale thrive as the number of festivals multiplies? Source: Reuters

On Sunday, the 67th annual showing of the Berlinale, one of Europe’s quirkiest, biggest film festivals, closes with a flourish, topped by the award of its famous Golden Bear for best film.

Over 10 days, this year’s event is expected to draw more than 500,000 visitors, pull in about €2.6 million in ticket sales, €6 million from corporate sponsors and its biggest chunk, more than €8 million, from governments.

While other film festivals fight for survival, the financial bottom line at the Berlinale, which is supported by the German government, the European Commission and local governments, appears assured.

The event’s budget this year was €24 million – 50 percent more than 15 years ago. As in the past, the non-profit gala event will dutifully spend exactly as much money as it pulls in.

“We assume we’ll succeed,” said Johannes Wachs, festival director at the Berlinale. “We calculate that way and then have to balance the budget after the festival. We can’t make profits and we can’t make losses.”

Government funding of the arts is more prevalent in Europe, and Germany is one of the most generous when it comes to subsidizing the arts. This year taxpayer euros paid for showings of unlikely pieces such as “Ulysses in the Subway,” “Dream Boat” and Australia’s “Monsieur Mayonnaise,” an off-beat documentary about a young man who researches his parents’ past in the French resistance in Nazi Germany.

The United States spent just 0.13 percent of its GDP on funding the arts in 2013, a tenth of Britain’s 1.08 percent and even less of France’s 1.37 percent, according to the OECD. Germany spent four times as much that year, 0.4 percent of its GDP.

The main source of public funds to the Berlinale is the Kulturveranstaltungen des Bundes in Berlin, or KBB, Berlin’s state cultural funding pot. The KBB’s budget is about twice as big as the Berlinale’s — roughly €56 million in 2014. The European Commission paid about 2.5 percent of the Berlinale’s funding, and ZDF, a public broadcaster supported by German taxpayers, was a main sponsor.

While as a non-profit the Berlinale can’t generate a profit, it does indeed generate a plus for the city of Berlin and its surrounding region. This year the Berlinale will bring in an extra €78.4 million to the area, according to Investmentbank Berlin, a state-supported bank.

That is thanks to spending by 20,000 movie industry visitors, from buyers to sellers, lawyers, producers, filmmakers, journalists and tourists. They will spend about €69 million this year on hotels, restaurants, transport and tickets connected with the event.

The Berlinale isn’t really about making money, said Richard Reitinger, artistic director at the Hamburg Media School. These events are more for the industry, and the aficionados, than the general public, he said.

Festivals are about movie fans coming together, he said, even if it’s only briefly, to have dinner, talk about projects and do deals and they matter just as much as conferences in the business world. “As long as there are people and films, there’ll be festivals,” he said.

Some of the movies are sad or hard to watch, and we still sell tickets.

Event organizers expect the visitor count to rise again this year.

Attendance is usually influenced by the health of the overall economy. Mr. Wachs said income from sponsorships and government subsidies are fairly stable. But not all sections of the Berlinale break even, including the category of well-known films in competition.

“The competition section doesn’t actually break even,” Mr. Wachs said. “But without it, there wouldn’t really be much of a festival.”

Stars attending this year’s festival included Siena Miller, Penelope Cruz, Catherine Deneuve and Kristin Scott Thomas. The jury this year includes actress Maggie Gyllenhaal, director Paul Verhoeven and Mexican actor Diego Luna.

The stars have to pay their own travel expenses to the Berlinale; the organizers only pick up their hotel costs, Mr. Wachs said.

A section of the event focusing on culinary foods covers its costs. But a retrospective section that shows movie classics does not, and the old films are often valuable and damage could be costly for the organizers.

“The retrospective has actually become quite risky,” Mr. Wachs said.

But in that case too, the risk would likely be picked up by the government.


Allison Williams is deputy editor in chief of Handelsblatt Global. To contact the author: williams@handelsblatt.com

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