US filmmaker offers roadmap to boost local industry

Greece is luring foreign filmmakers with tax incentives. Cyprus is poised to do the same. Hollywood cinematographer Steven Bernstein explains how it could work

By Theo Panayides

Steven Bernstein is a man with a plan – or a man with a dream, as they say in the movies. His dream is indeed movie-related, hoping to kick-start local film industries (and substantially enrich local economies) by bringing international film productions to Greece, and potentially Cyprus.

Who is this 63-year-old American? Here, in his own words – as we speak on the sidelines of the Cyprus Film Days festival – is how he was described by the vice-governor of the Cyclades, when that local luminary asked him to expound on his theories for attracting investment:

“Look, Mr. Bernstein,” said the vice-governor, as paraphrased by Bernstein, “you’ve worked around the world, worked on over 100 feature films, shot 40 of them, directed two, directed television, directed 100 commercials, shot over 100 music videos, wrote the biggest-selling textbook about film production ever written” – this book is called simply Film Production; the second edition came out in 1994 – “you’ve lectured around the world, and you’ve been at the inception of film industries in Vancouver, in New Mexico, in Atlanta, in New York, in Connecticut, in London. What’s common to them? What can we do here, in Greece [or Cyprus], to build a film industry?”

We’ll get to that in a moment – but first, let’s confirm that Bernstein does indeed have an impressive pedigree. He spent years as a successful Hollywood cinematographer, shooting trashy comedies but also, for instance, Monster, for which Charlize Theron won an Oscar. Then, at the age of 50, he decided on a radical life-change, giving up his lucrative career to write and direct two fairly uncommercial, not to say idealistic films: Decoding Annie Parker (2013), a true tale of breast-cancer researchers, and the recent Dominion, about the final days of the poet Dylan Thomas.

He also embarked on another project, which is where the vice-governor of the Cyclades comes in. For the past few years, Bernstein has been building a film school (now up and running) and film studio (“getting closer”) on the island of Syros, just west of Mykonos, which is part of a grander plan to attract foreign investors and help the Greek film industry, whose state-subsidy system has been badly hamstrung (as it has in Cyprus) by recession and cost-cutting.

The crux of the plan is simple: tax incentives, also known as ‘tax credits’ or ‘tax rebates’ – though in fact the name is misleading. A tax credit can sometimes be assigned to someone with a high tax exposure in the country in question, who’ll then set it against their tax. Most of the time, however, when the beneficiary is a foreign company which pays no tax in (say) Cyprus, the tax incentive is essentially a gift: if the company spend €10 million in Cyprus, the government gives them €2.5 million back (most tax rebates are in the 25-30 per cent range).

“Surely they’re just throwing money away?” exclaims Bernstein, playing devil’s advocate – but in fact there are compensations. “When a movie comes to an area, tourism goes up 20-30 per cent, always. You have to employ local labour, always.” Movie stars spend money when they decide to go sailing or buy local property. Local carpenters are hired to build sets. Local drivers and electricians get jobs on the crew. And of course the other €7.5 million (or whatever) is spent in the local economy, without having to be refunded. Based on his experience of other countries, there’s always a 3:1 or 4:1 ratio of money earned: money expended, he claims – “and it always works. Virtually every place in the world that’s tried it, it’s worked”.

None of this is news to our government, which announced its own tax-incentive scheme last September (Bernstein met with government officials during his time here). But there’s still an important question left unanswered, namely: ‘Will our scheme merely result in money ending up in the economy, or will it actually help the local film industry?’. The Film Directors’ Guild of Cyprus have already protested that the criteria in the current plan are too strict, setting a threshold that excludes most Cypriot producers. Given the size of our industry, this may be inevitable. But it would surely be ironic if Cyprus became a destination for film production without any benefit to local filmmakers, even indirectly.

Bernstein’s dream is to use the scheme in Greece (which also changed its tax law last year, introducing incentives) to create and nurture a local crew base. His film school – which is free to Greeks, though he hedges when I ask if he plans to extend this to Cypriots – is one plank in the scheme, hopefully churning out graduates who can work on the foreign productions attracted by incentives.

The second plank is so-called ‘shadowing’. “No American will come [to Greece] and work without a Greek working next to them”, he explains, the idea being that those Greeks will eventually be hired on their own merits; after three or four projects, “I’m hoping it’ll be all-Greek crews”. This is what happened in Vancouver, and soon resulted in all-Canadian crews (granted, there was no language barrier) – and of course, once locals have experience, contacts and some kind of regular employment in foreign productions, they’ll be much better placed to create their own films, without constantly sucking at the teat of the state.

The details of our own, Cypriot scheme have yet to be fully revealed (it still awaits final approval by the Commissioner for State Aid Control). On the face of it, it seems quite promising, obliging foreign productions to employ some local crew – a minimum of five or six persons, including some ‘above the line’ (i.e. in key positions), albeit without any systematic shadowing as described by Bernstein – in order to qualify for the rebate. That said, the fact that it’s being driven mainly by the Cyprus Investment Promotion Agency (Cipa), which will implement the scheme and launch a website, makes it abundantly clear that the purpose behind it is business, not culture.

The awkward truth at the heart of this story is that insisting on a role for the local industry inevitably makes a country’s incentives less attractive, and places them at a disadvantage to other countries. Admittedly, almost all countries insist on such a role, so the disadvantage isn’t great – but different countries insist in different ways. “If you don’t want to follow the rules, don’t bring your film to Cyprus!” says Bernstein, envisioning how a proper tax-incentive scheme would work – but would our own, cash-hungry country stand up to investors like that? Or would we succumb and make exceptions, for the sake of a quick buck?

Steven Bernstein’s dream is slightly paradoxical, insofar as his two aims – helping local filmmakers and enriching the local economy – are slightly at odds with each other. We’ll know soon enough if the Cypriot tax-rebate scheme matches his idealism. The point, he explains, is to “find a balance between things that generate income but also do good. If you can do good while generating profit, you please both investors and yourself”. Amen to that