Final Cut? Lights Dim at Babelsberg Film Studio

The center of Germany's film industry is struggling to survive, as government funding cuts make the location less attractive to international productions.
Can Steven Spielberg (l) and Tom Hanks help save Babelsberg?

The picture on the wall shows Chancellor Angela Merkel standing on a bridge covered in artificial snow with director Steven Spielberg and actor Tom Hanks during their time filming a Cold War spy thriller at Studio Babelsberg this November.

The Hollywood power players are just two in a long list of the mega-star directors and actors who have shot movies at these studios over its 102-year history.

This is where Marlene Dietrich also burst onto the scene, where Fritz Lang made "Metropolis," and Quentin Tarantino took the director's chair for “Inglorious Basterds.”

Alfred Hitchcock once said:“Everything I had to know about filmmaking, I learned in Babelsberg.”

The German movie industry is ailing, and the Babelsberg studios in Potsdam, just outside Berlin, has felt the pinch.

“I expect losses of €2.5 million ($3 million) for 2014,” Chief Executive Carl Woebcken told Handelsblatt. Revenues have also declined this year from €81.9 million to €50 million.

German Economics Minister Sigmar Gabriel wants to pass €10 million on to the film industry from a state fund for small and mid-sized companies.

The studios reported profits of €843,000 in 2013, but the last dividend payout was in 2008.

The film studio will withdraw from the German stock market on June 30, 2016. The company explained the move by saying it was unable to produce “any sustainable growth strategy.”

Sixty percent of the shares in the studio are held by the film company FFB Filmbetriebe Berlin Brandenburg, which belongs to Mr. Woebcken and his deputy, Christoph Fisser.

At the shareholders’ meeting in July of this year, Mr. Woebcken said he was still confident about reporting a profit for 2014. But then he lost two important movie productions - and the planned revenue from both, in addition to the potential customers he had to turn away at the time.

Another major blow was the loss of a major deal to the United Kingom, which offered more generous film subsidies, according to Mr. Woebcken. He said even the smallest discussion about cuts to the German Federal Film Fund, DFFF,  scares off film producers.

The German government has decided to redue the film fund budget by €10 million to €50 million next year.

To fill that gap, German Economics Minister Sigmar Gabriel hopes to direct €10 million to the film industry from the government fund for small and medium-sized companies.

Mr. Woebcken confirmed “direct talks with the Ministry of Economics on this topic.”

Yet, Babelberg's outlook for 2015 is anything but optimistic. Only two major projects in the pipeline. “We hope to be able to survive next year,” Woebcken said.<


Video: Stars and directors talk about their love for Babelsberg film studios.



Kai-Hinrich Renner reports on the media industry for Handelsblatt. To contact the author: [email protected].