When the Hungarian government unceremoniously ceased funding films through the Motion Picture Public Foundation of Hungary (MMKA) last summer, the territory’s industry went into a tailspin. The MMKA invested around $30m in local films and co-productions annually and was a major foundation stone in a local industry whose international profile has been rising in recent years.

The resulting period of damaging uncertainty looks likely to end within weeks with the Hungarian government set to approve a system of support for local film-makers to replace the MMKA, which officially closed in May. But while the new scheme provides a resolution to the deadlock, production volumes will be slashed and questions remain over local producers’ independence.

The new funding mechanism is being godfathered by Andy Vajna, the Budapest-born producer of US franchises such as Rambo and Terminator. The new plan is leaner than the one it replaces and gives more control to a new body, the Hungarian National Film Fund (MNFA).

“We want to make sure the money that’s being spent is being spent properly,” says Vajna. “Pictures tend to take on lives of their own.”

‘We’re interested in recycling that money so we can invest it in other movies’

Andy Vajna

The MNFA has $10.5m (HUF2bn) to spend this year, which Vajna says may be enough to fund three to four projects. Beyond 2011, he hopes to secure enough state funding to support eight to 10 films a year until 2013. The country formerly funded up to 30 films a year.

In Vajna’s vision, the MNFA will guide projects from development to release, with money going into the development, production and marketing of full-length features and documentaries, including both local films and co-productions. A five-member panel of industry experts, yet to be named, will consider funding applications on a continuous basis, providing money as well as professional guidance.

“We can take the time to really budget those scripts, make sure they’re feasible, make sure the casting is what we had in mind, make sure the locations and everything is possible and available within the budget,” Vajna explains.

Projects will typically receive up to 50% of their budget to a maximum of $790,500 (huf150m). Projects can apply for exceptional support, up to 90% of their budget, returnable based on box-office revenues.

Vajna says the MNFA is not interested in receiving producer credit or retaining rights to such films. “We’re just interested in recycling that money so we can reinvest it in other movies,” says Vajna, who expects to assemble a team and start reading applications by July. Projects that did not receive the financing promised by the MMKA last year will need to reapply.

Researching his plan, Vajna consulted with many European film commissions and considered their support models, particularly Denmark’s. “They’re very flexible. They do a lot of co-productions, they do a lot of minority co-productions, which stretches their money a long way, and they have a good system of distribution.”

Vajna also wants to create an apprentice programme to put students on the sets of international productions in Hungary and is negotiating with Hungary’s ELTE University and the University of Theatre and Film to build a screenwriting programme.

Final cut controversy

While Vajna says it was not difficult to convince the Hungarian government to continue its support for film, he has faced more resistance from local film-makers who saw little wrong with the old system.

Vajna’s support is growing but is not yet complete, with producers concerned about the deep decline in production volume. Eurofilm Studio producer Peter Miskolczi, whose credits include Asterix & Obelix: God Save Britannia, which is now shooting on location in Hungary, says that although he is cautiously optimistic there remains “huge uncertainty”.

“The support policy seems to be satisfactory — huf150m [$790,500] is a good start for local films and films looking for co-production partners,” he says.

Producers also have unanswered questions about how much control they will have to cede to the MNFA, which might assign development executives, line producers and accountants to the projects it supports.

“Producers and directors should have the right to the final cut, not the film fund,” Miskolczi says.

Vajna will also need to restore confidence among Hungary’s international co-production partners. “The uncertainty over what is happening in Hungary is making people very nervous about whether Hungary is a reliable partner,” says Sandor Soth of Berlin-based Intuit Productions. Hungary-born Soth is a producer on Istvan Szabo’s The Door, a Hungary-Germany co-production now in post. The film received backing from the now-defunct MMKA.

Soth says that while Hungary’s system is in turmoil, he sees no cause for panic. “I’m often asked, ‘Can we put our money on the table? Will it work out?’” he says. “I’m confident the situation is only temporary, but uncertainty is a poison.”

Funding hit