Future financing of the German Federal Film Board (FFA) was potentially put into question after the German Administrative Court ruled this week that the national funding institution's cinema levy is unconstitutional.

According to the German Film Law (FFG) cinema owners are required to pay a levy of between 1.8% and 3% of the annual gross turnover made on each cinema screen so long as the lower threshold of $95,175 (Euros 75,000) gross turnover is reached.

In response to a case submitted by the UCI/Kinowelt cinema group and five other exhibitors, the Leipzig-based court stated that the FFG was justified in principle in requiring that the exhibitors, video industry and broadcasters make contributions to the national film fund since they all profited from the projects supported by the FFA.

However, it pointed out that the FFG was unconstitutional since all three groups were not being treated equally on the issue of the levies. Whilst the level of the levies to be paid by the exhibitors and video industry is written into the Film Law, the broadcasters have always been able to negotiate voluntary payments to the FFA.

The exhibitors, who have contributed around $24m (Euros 19m) annually to the FFA's Euros $88m (70m) budget, argue that the German public and private broadcasters should have their financial contributions also written into the statute books.

In a response to the Administrative Court's ruling, the FFA said that it would now be 'working closely with the Federal Commissioner for Culture and Media to 'present all the arguments for the maintenance of the levy system and looking together with partners from politics and the film industry for solutions which will secure the existence of the national film funding in Germany on a permanent basis.'

The exhibitors association HDF Kino meanwhile stressed that it was 'still prepared to cooperate so that the interests of its members are protected without any damage being done to the FFA.'

In existence for 40 years and with a new Film Law having come into effect at the beginning of 2009, the FFA has supported such recent German films as The Baader Meinhof Complex, The Wave, Hilde, Storm as well as international productions like Adam Resurrected, Mammoth and The Last Station.

The Administrative Court has now referred the case to the Federal Constitutional Court in Karlsruhe to decide on the Film Law's constitutional nature.

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