MMP 2015 event

URSUS Case Study


“From the left we introduce Stelios Ziannis of Germany’s Aktis Film Production (Leipzig), Pavlina Jeleva from Bulgaria’s Geopoly Ltd, Oleg Shcherbyna from Fresh Production UA, Kiev, and Otar Shamatava from Studio “O”, Georgia…

Otar Shamatava : I am the film’s director and co-script-writer but for many reasons, (mostly bureaucratic), I also became one of the film’s producers,…

We started working on the script of URSUS 12 years ago, in 2003. The story, in short, is that there is a film-maker, Nika, who tries to escape - from family, his wife, from his professional life, from the civil war surrounding him in that period in Georgia, from many troubles and , finally, from himself.

But he finds out many things and that it is impossible to escape from oneself. 

Otar Shamatava

In this period there were many small civil wars going on, poverty, hopelessness. And film people too were doing their best to survive – some bread, some sausage and of course a little bit of alcohol. One day we were sitting discussing the bear that was running out of food in our zoo, and we said it would make a great film for Westerners to see. Two days later, we learnt there was a Dutchman coming with an offer to take Chola the bear for 3 years to a zoo in his country.

I said, why Chola? Let them take me instead. I have a lot of trouble, and I will do everything better than Chola creatively and do dance and so on…So this was the first kind of kick on the idea when we started work on the script.

The story takes us from Georgia right through Central Europe to Berlin. The bear must reach Berlin Zoo.

Zaza Buadze , the Georgian scriptwriter who lives in Kiev, had collaborated on the script during a period of 10 years when shooting started in 2013. And then shooting had to stop due to the fighting in eastern Ukraine, but we had already shot in Bulgaria and some parts in Ukraine. We still needed (at this point) some shooting in Berlin and to finish shooting in Ukraine. So what we had been writing about for 10 years, in a total of five, five and a half drafts, suddenly was there. And it was impossible to continue on any level: financial, practical, human, psychological – we had crew people involved directly in the situation and we had to stop.

Q to Oleg Scherbina: Among the co-producers the Ukrainian part is the main part. But the script is in fact Georgian. Does that make a problem for funding out of Kiev? 

Oleg Shcherbyna: No there is no problem because even though we need a Ukrainian as writer , our scriptwriter is very well known in the Ukraine , having worked as director on big movies with support of the Ukrainian Film Agency . (He pays his taxes in the Ukraine). Our production designer, the DoP and the composer are Ukrainian. Q: Is there a points system in the Ukraine for co-productions? Oleg Shcherbyna.: No, right now (2015) in the last years there is a discussion about bringing in a points system. This points system, it must be stressed, should not be a defense against Europeans so much as against any overbearing international presence in co-production with Ukraine. There are (2015) two draft laws being prepared to regulate the system and stimulate co-production especially with Europeans and the European Union. An emphasis is of course intended on Ukrainian talent and content.

Oleg Shcherbyna

Q: Does this mean there is no minority funding at present in the Ukraine?

Oleg Shcherbyna: Not at all. Next month (November 2015) there is planned a special call for public support and any project that is connected in any way to the Ukraine can be submitted.

The system is coming back – what stopped because of the fighting is now returning. And two weeks ago (beginning October 2015) the Ukrainian government committed over 3 million euros for completion funding of projects that had been held up. 

Q: Oleg, what is your past history with international co-production?

Oleg Shcherbyna: My company Fresh Production UA started in 2004, and we began with tv series, and between 2005 and 2008 we produced 25 TV movies for the Ukrainian and Russian markets. With the crisis in 2007/8 the Russian market closed for both economical and political reasons.

 After this we decided to change profile and started on feature films.

In 2011 was the first Ukrainian call for international co-productions, and URSUS was one of the first projects selected for funding. From that point we spent 2 years looking for additional partners and funding. Stelios Ziannis (Aktis Film) became our first partner, and he attracted Pavlina Jeleva at MMP in Mannheim.

Now in October 2015 we start our second co-production, a comedy with Italy, shooting in both Ukraine and Italy.

Q: When did URSUS arrive with Fresh Production UA?

Otar Shamatava: Zaza Buadze was working in the same production company as I in Georgia - he directed TV mini-series, as I did. In 2006 he moved to Kiev and continued to work on the script of URSUS there. Then one day he came with the information that there was some interest in Kiev and he introduced Oleg from Fresh Production UA with his partner, and it was decided the production had to be done.

Q: What was the original budget submitted for that first call in 2011? (in Euros, please). 

Otar Shamatava: At that point, something like 2.5 million euros.

Oleg Shcherbyna: It has been quite difficult to work with such a budget, since we had in fact five different currencies in the pot (2011-2013+) with fluctuating values: Ukrainian Hryvnia (devalued 3 times in the period) , Georgian Lari, Bulgarian Lev (de facto fixed to the Euro) , the Euro itself and U.S. Dollars. 

Otar Shamatava: the crew and the actors were also spread out among six languages. So if you have five currencies and six languages in 7 years it’s not too much. 

Q: the first call in 2011 involved just 2 co-production partners: Ukraine and Georgia. 

Oleg Shcherbyna: The original plan was to have a tripartite co-production with Germany. 

Then Simone Baumann, who is a German producer well known with her connection with Russia gave us the contact with Stelios, and we started a dialogue, and had a full German partner very quickly, who really got a lot done very very quickly.

Bulgaria was in fact in the script, and by 2011 we had already had some conversations with possible partners who had in fact said it was impossible to receive any public money for this film out of Sofia.

 So we had in fact given up on Bulgaria but at this moment once again Stelios helped us with Pavlina who of course got her funding.

Otar Shamatava: So perhaps the first dialogue was just another polite way of saying “no interest”?

Pavlina Jeleva: Possibly. So it’s best to know both ways of saying yes and no….

Q: So how much of this 2.5 million euros turned up in this round of financing?

Oleg Shcherbyna: The Ukrainian State agency gave 20%. Q: And what did you have from Georgia? 

Otar Shamatava: From Georgia we got more or less 10%.

Q: That 30% is not even a majority share. Were you expecting the rest from Germany or what?

Oleg Shcherbyna: we put in some money

Otar Shamatava: there were some private investors participating. 

Q: By 2012 you were looking at being able to finance URSUS. When did the idea of using French actress Josephine de la Baume enter the picture?

 Otar Shamatava: Josephine was Stelios’ idea. It was very interesting

Q: Let’s stay with your previous films, Otar. We can mention Dear M which was a “Callas-Voice” feature, and a Turandot. So how many international feature co-productions have you been involved in?

Otar Shamatava: features? 3 and ½ including URSUS. But if you count the Tv miniseries, it was more.

Q. Were these regional co-productions or did they go further afield?

Otar Shamatava: Dear M was made with the UK. Via John Hilary Watkinson, who was one of the first producers who came to Georgia (with a huge enthusiasm) during the civil war in 1991. Shooting started in 1995 and there were only private investors.

Today Georgian public funding is well tuned into international co-production: Makmalbaf is a recent example.

Q: Stelios Ziannis, you arrived. How did that happen? 

Stelios Ziannis: we met at the Boat meetings in Kiev in 2011. Oleg and Otar made their presentation and we started talking. In Germany we then looked for a little more than 20% of the budget – around 600,000 euros. This was to be for CGI, special effects, matte painting and some of the postproduction. At first it became rather difficult, we made 2 German applications and one in the UK through our British partner, and in the end we were financed through our local region, MDM in Leipzig, for around10% of the budget. (We also had to find a real bear, and nor rely on CGI as much as was originally planned).

Q: How was the script at this period? Did two co-producers coming on board have an effect? 

Stelios Ziannis: Yes we had some discussions concerning certain issues in the script, and some changes were agreed. In 2011 nobody was thinking forward to 2013 – it was a very positive time and one could work with optimism. There was funding and an openness to the West in Kiev. But things changed.

Stelios Ziannis

Q: Your 10%, Stelios. What obligations did it bring with it vis à vis the funder?

Stelios Ziannis: A lot. They expected film insurance, which is not possible in Ukraine. Proper reporting of all the shooting days (all foreign shooting - included). This is a partial loan contract , not a grant, over 10 to 12 years - which means you need annual accounting. Which over ten years just that is over 12,000 euros fees just for accountants. 

Christine Haupt: I can add that every co-production partner has to sign an agreement with the German funder that they declare all their revenues. This also has to be included every year. This contract is in German and has to be translated for every partner.

Q: So, despite the fighting in the Ukraine and the subsequent shooting stop, were you capable of fulfilling all your obligations in Germany?

Stelios Ziannis: Well we have some difficulties because URSUS was in the last stage of shooting when the situation deteriorated. We were expected to sign the German funder’s agreement without – suddenly – all the financing being in place.

So we could not finish shooting without money and we could not start work in Germany without the shooting being finished, and the German agreement being signed. And once you sign you have only x months to present a finished production, and this production could not shoot without new money that wasn’t coming (yet).

 Q: Could you explain the German Regional Effect and Eigenanteil?

Stelios Ziannis: Eigenanteil is the part the producer brings himself – in this case 5% of the funded amount. It can be in the form of cash or deferrals. 

The Regional Spend is what the Funder requires you to spend in the funding body’s region above the sum granted – it can be 20% extra, or sometimes even 400% (for large productions). It is set competitively – a more popular Fund will normally expect a higher additional regional spend, and if you come with a spend offer of 200% then automatically you are in a better position. 

Then there is the support limit set by Funds: 66% can be direct regional public money and the rest has to raised by the producer – by TV agreements, private investment, sponsors, national funds such as FFA, other specialized funds, etc.

Christine Haupt: it can be money from international funders as well. For example for a Czech lead production only around half needs to be spent in the country, so in fact the rest can go towards spend in the co-producer’s territory.

Rasa Myskinite: what is the time limit between granting of funding and full closure of financing?

Stelios Ziannis: at our regional fund (MDM) it is 9 months, and in extreme cases such as fighting in the Ukraine, you can apply for extensions. 

Q (to Pavlina Jeleva): so you started the collaboration for Bulgaria at Mannheim in 2012? 

Pavlina Jeleva

Pavlina Jeleva: Yes you can say it is an MMP project. It was announced that year at the Berlinale, and I go there every year but didn’t know about the project until Mannheim. And at Festivals in Berlin you can meet many people, but not always the right people. So there was a meeting organized with Stelios anyway and that was nice. It was short, which made it nice as well.

There was the question earlier about what the story of the film is about. In fact it is about a very sensitive artist who sees his previous artistic life being destroyed by civil war . He tries to escape his own country and his own past. This is something we see everywhere. The original element here is that the man decides to make his voyage to his dream country, which in this case is Germany (nothing to do with contemporary events at all – laughter) in the form of a bear. All the way from Georgia through Turkey, Bulgaria and so on – this was the striking element. It was very charming for me- the connections the scriptwriters found to different bear stories and legends, and that someone could organize an escape as a bear and go through all of Europe to find some imaginary freedom.

Dreams of freedom existed under Soviet rule, and in fact the protagonist – in this case a film director – does not at all know what freedom is.

 Q: What were the conditions the application had to meet in this case?

Pavlina Jeleva: I made a funding application in Bulgaria and the first time it did not work out. That meant I had to go back and think about how to change the form of the application a second time.

You need to be aware that you can’t formulate the application the same way in Georgia, The Ukraine, Bulgaria and Germany. These are specific clients with specific needs. So I needed to find the relevant key to seduce the committee, to make them understand and believe that this is an important story. And since Bulgaria hasn’t had a war since the fall of the Wall in 1989, the emphasis on war in the project was not relevant.

The key that was used was that the protagonist is an East European, from a background commonly shared with Bulgaria, Ukraine and Georgia. It was important to show what dreams the East Europeans have and what possible ways exist to help the fulfillment of such dreams. Where’s the upside? So this was the approach I used.

To answer the original question: we were applying for minority support in Bulgaria, and the first condition to meet is that the delegate producer already has public support. Such support from a public institution or a larger tv channel with national coverage. Without this a project will be rejected.

Since we already at this time had Georgian and Ukrainian support this was not a hurdle.

On the other side Bulgaria has a points system that requires elements, and one of the most useful elements is shooting in Bulgaria. A link to Bulgaria itself in the story is an advantage but is not imperative. Points are also given for the normal set of crew and personnel as well as music, post production, whatever.

In this case Bulgaria was part of the story since the beginning of script-writing, so that was a natural advantage. The main protagonists reach Bulgaria to go and visit a famous fortune-teller.

This figure is based on a real person who was a well-known and respected clairvoyant throughout pre-1989 communist Europe, including the Soviet Union. In fact many party leaders, including Brezhnev, visited the blind Baba Vanga in their time. (See Wikipedia - Ed.)

Thus there was no problem from our side to satisfy the Funding committee – we were full of Bulgarian elements and shooting as you can see. We were also at the time the first Bulgarian-Ukrainian co-production feature project – that was important – new territory. And with the right kind of a bit of pressure, we succeeded.

In the case of the Ukraine, when Bulgaria was joining the project, Ukraine’s efforts to become part of the European Co-production Treaty were already under way. There was a meeting of the four prospective funders for the project during the Berlinale (2013) where especially the Ukrainians insisted on the importance of this project for their country. At the time the local Ukrainian Film Agency was step by step moving towards a serious international co-production structure, (an effort that was disrupted for 2 years by the fighting in East Ukraine.)

Ilka Zafirova

For us it was also important to demonstrate that Bulgaria could play an important role, even as a “small” partner, with larger partners such as Germany or Ukraine.

For shooting, we were able to shoot Turkey in Bulgaria (not very difficult). For all the 10 days we of course used a Bulgarian crew, and among the main personnel, we had the director and scriptwriter from Ukraine/Georgia, while the CGI specialist came from Germany. And of course Josephine de la Baume from France and our “blind” Bulgarian fortune-teller. We shot in southern Bulgaria, not far from the Greek border, without major problems – one week later the fighting started in the Ukraine.

It was uncanny – the project started with a war and now shooting was stopped because of another war. Good that not so much shooting was left over. But it had to wait a long time. 

Q: So how did the four funds react to the war?

Pavlina Jeleva: Well, I have in my life come up against people who wouldn’t take “force majeure” into consideration. But myself I have always taken a lot of care with agreements. Having worked as a producer with Eurimages since 1995, I have used their agreement structure and “force majeure” conditions are very clear. So this is very very important. Especially here where no one could imagine fighting in Eastern Ukraine.

So in the end we had two payments from the Bulgarian Film Centre, and I am expecting (October 2015) the third but to do that I am expected by my Fund to show them an edited version of the film.

I was asked to present a letter from the delegate producer for the fund, which I did and then I said to them this is a force majeure event, so please wait. They were understanding. As far as proceeding to finish the production, it has been good to meet here in Mannheim (October 2015) – especially Oleg (Shcherbyna) has been able to explain that a renaissance for film making in Ukraine is in fact under way and funding is re-starting, albeit on a smaller scale.

Stelios Ziannis: Well we applied twice for an extension, and now we have a deadline until the end of 2015 to sign for the funding money. We then have 6 months to present the finished film.

Oleg Shcherbyna: When the fighting started in Ukraine, two important negative factors soon emerged:

  • All state funding programmes (with the exception of some military projects) were immediately frozen, and 
  • the marketplace for production that was left was then radically reduced and financing disappeared from the country.

In 2014 production stopped – there was practically no work to be had at all. The TV market shrunk by a factor of 5, the value of the currency by a factor of 3.

My partner literally lived with her suitcases: there were two fully packed in her car ready for any necessary escape with her small children at all times. Filming was out of the question.

Q: what was happening at the Ministry?

Oleg Shcherbyna: the Ministry and Parliament gave out directives that all funding projects were frozen.

Also any money we got that was in the pipeline was dramatically reduced in value because of the sliding exchange rate.

Q: and how did the exchange rate changes effectively do to your budget? 

Oleg Shcherbyna: well we went out looking for additional financing.

Stelios Ziannis: What happened to your Russian TV partners? You had been making so many series for Russian TV…

Oleg Shcherbyna: all contact was frozen from the Russian side.

Q: Otar, what was happening in Georgia?

Otar Shamatava: When I went, heavily prepared with legal terminology, to the Film Agency, I was very quickly told that this was a classical example of force majeure.

And it was an impossible situation. Even to try anything with Ukraine, who is a major economic partner, one would have had to be Minister of Defense in Georgia – at least…

Oleg Shcherbyna: And here is another example of the influence of war on the film industry: 

The first deputy director of the Film Agency (Goskino) was invited into the army and is now (October 2015) at the front…just like one of Ukraine’s most important actors, who is actively fighting…

But the Ukraine has a long history of quick recovery from crisis, and this autumn (2015) has seen a resurgence of mass TV serial production in the country…

And I am happy to say that as part of this renaissance we have been able to sign with additional funding (10%) from one of the most important Ukrainian Media groups to finish URSUS. And they are further taking over the whole P & A for the film when it is finished.

So we are now affiliated on URSUS with one of the most important national TV channels in the Ukraine They are part of a group including 4 smaller channels and an important newspaper as well, so we have a good platform for launching the film.

Shooting will finish in with 5 days in the Ukraine, 2 days in Berlin, and postproduction in Germany.

Pavlina Jeleva: I just want to add that in the meantime our fortune teller passed away....