Corporate > AG Deal Diary > Russia Cuts its Film Subsidies
22 Feb '16

From Russia with Loss

The Russian government had declared 2016 “The Year of Cinema,” but its recent actions cast doubt on that assertion. Russia has cut the amount of film subsidies available to production companies by $2.8 million. Anton Malyshev, head of the Russian Cinema Fund, has stated that “Our grants, which are distributed directly, have shrunk, but in terms of efficiency, I think [their impact] will be more.” Despite the assurance from Malyshev, there has been no structural change in the Russian film subsidy program that would support his claim.

How Do Film Subsidies Work in Russia?

In Russia, most film grants are made directly to production companies. From there, the government recollects the money only if the recipients make a profit on their respective films. The production funds are given primarily to the leading production companies, who receive almost 2/3 of the available film subsidies.

Why Did Russia Reduce Film Subsidies?

The Russian Cinema Fund has not officially stated why it has reduced the amount of government film subsidies, but the reduction is nothing new. Last year, Russia failed to keep up with the devaluation of the ruble against the dollar, effectively reducing the amount of money distributed to filmmakers. The cuts likely have less to do with Russia’s feelings about film subsidies and more to do with the country’s struggling economy.