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Beginning in the last decades, the American film industry has shown a growing interest in so-called runaway productions. Effectively, Holly-wood, more and more, is seeking to shoot many of its films overseas for economic (tax incen-tives and reduced labour costs), creative (exotic locations) and even marketing reasons (shoot-ing as a ‘local event’), hence displaying ‘the

City of Light, City of Shadows:The Difficult Take-off of a Spanish Film Studio

By Alejandro Pardo

Keywords: Ciudad de la Luz, runaway productions, film studio, greenfields studios

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hypermobility of contemporary film production’ together with ‘the availability of globally dis-persed infrastructure’ (Goldsmith and O’Regan 2005b: 1–2). According to a report published by the US Center for Entertainment Indus-try Data & Research, international locations account for more than half of all film shoot-ings (McNary 2006). In the last few years, this trend has been reinforced to the point that on the eve of the 2009 Locations Trade Show in Los Angeles, Screen International concluded that ‘US producers are looking beyond their borders to international locations more than ever before’ (Hazelton 2009).

In this sense, Canada, Mexico, Europe, Australia and East Asia have become the desti-nation for significant Hollywood investments. In Europe, particularly, old film studios have been rebuilt, improved and even merged in order to attract big American productions. This is the case with Pinewood/Shepperton Studios and Elstree Studios in the United Kingdom, Cinecittà in Rome, Studio Babelsberg outside of Berlin and Barrandov Studios in Prague. Other eastern European countries have developed competitive studio facilities and services, like Sándor Korda in Hungary, Boyana Studios in Bulgaria and MediaPro Studios in Romania. In

addition, new film studio complexes have been built up from scratch, like the so-called Ciudad de la Luz on the Mediterranean coast of Spain or the studio set up by Dino De Laurentiis in Morocco (Rodier 2005; Vivarelli 2007). In many cases, national and local government support – from direct investment in film studio refurbish-ing to tax breaks and indirect subsidies – has facilitated this policy (Goldsmith and O’Regan 2005b: 44–54).

This global dispersion of film and television production has attracted the attention of sev-eral scholars from different fields, either from the geographical/organizational perspective (Scott 2005), or in the form of cultural pro-duction studies (Miller et al. 2005; Wasko and Erickson 2008; Elmer et al. 2010). Sometimes a combination of both approaches, directly applied to the case of runaway productions and film studios, has been undertaken (Elmer and Gasher 2005; Goldsmith and O’Regan 2005a). In addition, this trend has also been studied as part of a wider set of cooperative strategies between American and local film industries (Pardo 2007: 82–89).

In their comprehensive study of film studio facilities around the world, Ben Goldsmith and Tom O’Regan (2005a) explain how this global

Effectively, Hollywood, more and more, is seeking to shoot many of its films overseas for economic (tax incentives and reduced labour costs), creative (exotic locations) and even marketing reasons (shooting as a ‘local event’), hence displaying ‘the hypermobility of contemporary film production’ together with ‘the availability of globally dispersed infrastructure’.

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dispersal of film production is a consequence of three interconnected factors. One is a prem-ise – the standardization of the blockbuster film on an international scale – and two are mutual interests regulated alike by the law of supply and demand: the ‘design interest’ and the ‘location interest’. The first one applies to the creative and technical specificities of a film production, and represents the producers’ demands. The second one stands for the local supply and includes those efforts to attract and facilitate audio-visual productions – studio facilities, production infrastructures, govern-mental support, development of clusters and creative industries, synergies between local and international industries (Goldsmith and O’Regan 2008: 18–22).

A number of the most recently built film studios have been promoted following the motto ‘If you build it, they will come’. As Ben Goldsmith explains, these words –inspired by the movie Field of Dreams (1989) – have become ‘an apt metaphor for the business of bringing film production to a physical place and for the experience of hosting large-scale film or televi-sion productions’ (Goldsmith 2010: 1), and even more, ‘one of the articles of faith of the location interest’ (Goldsmith 2010: 3). These studios are not, however, exempted from risk, as Goldsmith also underlines (Goldsmith 2010: 1–2).

As we will see, these words signal some of the problems faced by La Ciudad de la Luz (City of Light), erected a few years ago in Spain. Before going in detail into this case, it is necessary to offer a wider view of the different types of film studios.

The ‘greenfields studios’In their monograph about production facili-ties around the globe, Goldsmith and O’Regan offer a useful typology of film studios, accord-ing to some variables: location, size, owner-ship and management, functional profile and spatial concentration. Regarding location, film studios can be placed in inner urban areas or in regional/rural areas (the latter nick-named ‘greenfields studios’). From the point of view of size, production facilities can be large or medium. According to ownership and management, film studios can belong to an American/Hollywood company, a media group,

a non-media company or be partially owned by a government. Finally, from the qualities of infrastructure and spatial concentration, film studios can be classified as simple production facilities, a cinema city – mainly devoted to film and television productions – or a media city which can host any sort of audio-visual produc-tion (Goldsmith and O’Regan 2005a: 23–40).

For the purpose of this case study, it is espe-cially interesting to further explain the fea-tures that characterize the ‘greenfields studios’. In regards to their locations, these studios are based in places without previous produc-tion infrastructure, usually peripheral to main centres and mostly located in countries where English is not the spoken language (Goldsmith and O’Regan 2005a: 76). Among their main aims are to generate foreign investment, cre-ate employment in new economy industries, provide and/or encourage the development of craft specializations within the region, act as a hub of a cluster of related industries and also promote tourism. Examples of production facilities that fit into the category of ‘greenfields studios’ are The Bridge Studios and Vancou-ver Film Studios (Vancouver, British Colum-bia, Canada), Warner Roadshow Studios (Gold Coast, Queensland, Australia), Atlas Corporation Studios (Ouarzazate, Morocco) and La Ciudad de la Luz (Alicante, Spain).

However, as Goldsmith and O’Regan point out, if any film studio is a risk-taking enterprise, these developments ‘in extreme or peripheral locations are [even more] inherently vulnerable’ (Goldsmith and O’Regan 2005a: 79). Film stu-dios of any sort are extraordinarily expensive to build and equip. In addition, they depend on main production circuits (national and interna-tional) and need a regular connection to various supplier networks. In this sense, ‘greenfields studios’ are ‘too vulnerable to the ebb and flow of international production cycles, either to be established initially or to survive long-term’ (Goldsmith and O’Regan 2005a: 78). On top of that, they are highly dependent on the skills, experience, contacts and reputation of local crew members, which affect the continu-ity of film productions. Additionally, one must underline the high dependence on national or regional government support. In this regard, ‘greenfields studios’ are subject to the unpre-dictable winds of political change, which can

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compromise long-term planning and other sig-nificant promises.

There are also other risks that may inflict these production facilities. One is the varia-tion in exchange rates and labour costs. ‘When the US dollar is high, production has a greater chance of flowing offshore and trickling down to these low-cost environments, but when it is low, such production will tend to stay in the United States or contract to familiar interna-tional locations…’ (Goldsmith and O’Regan 2005a: 79–80). Last but not least, film studios are dependent on the reputation and amenities of the location area. International producers look for high-standard accommodation facilities and a wide range of leisure activities to satisfy the expectations of the creative talent. In summary, ‘the studios seem to be inherently risky ven-tures in that supply must be in search of demand’ in Goldsmith and O’Regan’s words (2005a: 78; emphasis in the original).

In the following pages, the specific case of the Ciudad de la Luz (CDLL), a state-of-the-art film studio recently built on the Mediterranean coast of Spain will be considered. Its inaugura-tion in 2005 was celebrated by practitioners and politicians. However, after the first six years of its existence, the balance sheet offers more shadows than lights.

An ‘extreme dream of production’ called La Ciudad de la LuzThe CDLL, located at Alicante (south of Valencia) by the sea, was born from the desire of the Spanish film director, Luis García Berlanga, together with some producers, to reindustri-alize the Spanish audio-visual sector. It was promoted by the Generalitat Valenciana (the Valencian regional government), which has been very active in pursuing the idea of con-verting the region into a place of art, industry and entertainment.

The CDLL was designed as ‘the ideal place to host, from the very smallest to the very larg-est, American and European productions’ (CDLL 2010). With an investment of 270.4 million euros, and covering a total area of 3,195,395 square metres, the architectural design was entrusted to Gary Bastien, a well-known

architect who has remodelled film studios for Paramount, Dreamworks and Warner Brothers amongst others. He was helped in this case by a local studio, Magín Ruíz de Albornoz.

The CDLL facilities consist of six sound stages, interconnected in pairs, with a total area of 11,100 square metres. Set buildings are independent, soundproofed structures with air conditioning. Each pair of sets has a separate annex building providing production support services. Around them are three production support buildings, with dressing rooms, hair and make-up rooms, warehouses for wardrobe, set design and props, meeting rooms, etc. A huge warehouse and workshop building divided into various zones allocated to the construction of sets, their assembly and storage, the creation of special effects, storage of lighting and camera equipment, wardrobe, etc. completes the logis-tic blocks, together with a restaurant building that possesses a capacity of 600 diners per hour.

Outdoors, the CDLL has two back lots for filming exteriors, equipped with electricity and water supply as well as fibre optics. One of the back lots contains a film pit with a huge blue screen installed on one of the sides. The outdoor back lots, furthermore, have several water zones, this being one of the factors that distinguish this complex from other production centres worldwide.

The post-production services for sound, assembly and mixing, include projection rooms and one film laboratory (first Kodak, then De Luxe). Finally, this studio complex contains the Ciudad de la Luz Film School, a training centre.

La Ciudad de la Luz, S.A.U. (public limited company) was constituted in late 2000, with public funding from the regional government. From 2003 to the middle of 2008, former Pinewood Studios executive David Rance served as operations manager, through his firm AD Studio Consultants. Construction took almost two years and the first phase of the studio com-plex was finally inaugurated in August 2005. The relationship between AD Studio Consultants and the CDLL management team has continued on a non-contractual basis and AD Studio Con-sultants provide any necessary support to the CDLL as they plan to enter the second phase of the project. This second phase will include the building of additional film and television sound stages, a super stage and additional production

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support facilities including a number of multi-functional workshops. Future development plans include a new administration building, which will cater for productions and long-term tenants.

La Ciudad de la Luz as a ‘greenfields studio’

As hinted at, the CDLL is a ‘greenfields studio’. To begin with, it is located in a place without any previous production infrastructure, and is peripheral to the main centres of production activity (like Madrid, Barcelona or Valencia) in a non-anglophone country. According to the typology described above, the CDLL could be classified as a medium size (by its limited number of sound stages) cinema city (mainly devoted to film and TV productions).

In addition, the CDLL was promoted to achieve some chief objectives that coincide with those described by Goldsmith and O’Regan such as attracting foreign investment, creat-ing employment in new economy industries, encouraging the development of craft spe-cializations, acting as a nucleus for a cluster of related companies as well as promoting tourism. However, after analysing the results for the first five-year period, it should be con-cluded that these aims have only been partially fulfilled.

According to an official statement, the CDLL has been ‘an important generator of renewed economic benefits for the Valencian Com-munity’ (CDLL 2010). Effectively, in this period (2005–10), 41 film and TV productions have been wholly or partially filmed there, at a total cost of 280 million euros and with a direct investment of 114.5 million euros into the region. This film-making activity has led to contracts for 45,108 extras and 2,232 personnel, a further 1,609 with other regional supplier companies, as well as some 124,011 overnight stays in hotels across the region.

The presence of such a studio complex has accordingly revitalized the audio-visual activ-ity in the region, but not at the level initially expected. During the 2009 San Sebastian Film Festival the Valencian Audio-visual Cluster, formed by producers, distributors, exhibitors as well as production servicing companies from all

over the region, was introduced. In this forum, the CDLL was presented as a strategic part-ner and one of the competitive values of this regional audio-visual cluster. The CDLL itself has also been very active promoting film com-missions in almost every small town around the region, convinced that there will be a direct benefit for their tourism. For this purpose, the CDLL attended several national and regional international tourism fairs in 2009, to show the possibilities of tourism implementation attached to the film-making activity.

From the political point of view, the Generalitat Valenciana has been very support-ive, not only as one of the main partners of the CDLL, but also by implementing the audio-visual policy to attract more film productions to the region. This includes creating a new incentive for European and Spanish producers in 2008, offering between 16% and 20% rebates of spending in Valencia. Shortly afterwards, in 2009, the Valencian government launched a new 26 million US dollar (17.6 million euro) film fund incentive for the period 2009–11, available to international producers shoot-ing films and TV productions in the region. To access the fund, producers must work with a co-production partner from the region or set up an office in Valencia. At least a third of the film must be shot in the area. Producers can claim up to 20% back of 80% of the local spending, although there is a cap of 5.9 million US dollars (4 million euros) for each project. In addition, the maximum amount of aid received must not exceed 50% of its total contribution to the budget of the film. Projects also have to pass a cultural test based on a points system, which will require film-makers to use Valencian and/or European themes, characters and languages (Evans 2009b).

City of light, city of shadowsThe earlier indicated features could lead us to the conclusion that the level of activity as well as the scale of the international film produc-tions hosted at the CDLL should be outstanding. The reality is quite different. Of course, several major productions have been shot there during these years, including Asterix and the Olympic Games (2006), Manolete (2007), His Majesty Minor (2007) and My Life in Ruins (2009).

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The type of audio-visual productions made at the CDLL shows the limited range of its achievement. Out of the total of 41 productions shot there to date, 36 (87.8%) are feature films (including one animation) and the remaining 5 are television productions (12.2%). Regard-ing their nationality, 21 productions (51.2%) are 100% Spanish, whereas 20 (48.7%) are interna-tional co-productions – mostly with European or Latin American countries; and only two of them with the United States. The average number of productions totally or partially shot there per year is close to seven, a figure too small for the studio complex’s capacity. It must also be noted that the relatively regular input

of productions has only been possible thanks to agreements with some Spanish production companies like the tandem Lolafilms (national) and Trivisión (local), Kanzaman (who provides servicing for co-productions with American and British companies), Sorolla Films (a local company attached to the CDLL) and Torna-sol (focused on co-productions with Latin American countries).

Of course, there have been several attempts to attract big Hollywood productions. For economic reasons, none of them eventually went to the CDLL. Other film studios offered more com-petitive deals, for instance Watchmen (2009) was finally shot at the Canadian Motion Picture Park Studios (British Columbia, Canada), The Chronicles of Narnia: The Voyage of the Dawn Treader (2010) at Gold Coast (Australia) and Prince of Persia (2010) at Pinewood/Shepperton (England) and Our-zazate (Morocco). To mention just one example, Disney finally decided to take Prince of Persia to Pinewood instead of to the CDLL because they could get a rebate of 10 million pounds if they shot the movie in the United Kingdom as against one of only 6 million euros in Spain (Olaizola 2009). According to José María Rodríguez Gal-ant, former chief executive officer of the CDLL, the exchange rate of currency and the politics of incentives explain these defeats:

In the USA [the producers] get back up to 45 per cent of the local expense, whereas the maxi-mum percentage the Valencian government

The type of the audio-visual productions made at the CDLL shows the limited range of its achievement.

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can offer is 18 per cent of the local expense. The aids from the Spanish government are not attractive for American producers. A culture of incentives is absent. (Rodríguez Galant 2009)

Economic reasons were also the main argument in the case of Ágora (2009), a 50-million-euro English-language historical drama set in Roman Egypt (Alexandria), directed by Alejandro Amenábar and starring Rachel Weisz. It was entirely financed in Spain and shot in Malta.

The case of the CDLL also illustrates the sort of risks usually associated with the ‘greenfields studios’, in comparison with those attached to film studios in main centres of production. To begin with, the difficult balance between cost and amortization. According to the regional Chamber of Commerce, the CDLL presented cumulative losses of 54.2 million euros in its 2009 balance sheet, despite the economic ben-efits brought into the region by the film-making activity. The initial investment of 270 million euros is yet to be recouped and its break-even point is continuously delayed. This deficit has so far been covered by the Valencian govern-ment, but at a high political cost.

In addition, the CDLL has been ‘too vulnerable to the ebb and flow of international production cycles, either to be established initially or to sur-vive long-term’ (Goldsmith and O’Regan 2005a: 78). Effectively, the lack of a regular stream of international projects has impeded the CDLL from being consolidated in its first years of existence as a competitive offer, especially for big-budget film and television productions. On top of this, it has suffered the negative effects of currency fluctuations and labour costs (the ratio between the euro and the US dollar), as well as

the consequences of the 2008 economic crisis. One of the first mid-term implications has been the delay of the second-phase construction. In addition, the consolidation of a skilled, experi-enced, local workforce has also been affected by the discontinuity of film productions.

Regarding its high dependence on regional government support (direct subsidies and tax incentives), the CDLL, however, has not yet gone through the arbitrary consequences of politi-cal changes. The Popular Party, which promoted and built the studio complex, is still governing the Valencian region but it is closely watched over by the political opposition and is occa-sionally accused of favouritism. In addition, some of the tax break incentives propelled by the Generalitat Valenciana have been reported to the European Commission (EC). In fact, in February 2008, the EC announced the start of an investigation into the public financing by the Generalitat Valenciana of the Ciudad de la Luz film studios. The EC’s investigation was prompted by suspicions that the substantial public investments could conflict with ques-tions of competition within the European single market in the film production sector. At the origin of this initiative were the reports received from two European companies in the film sec-tor (presumably Pinewood/Shepperton). Despite that, the Generalitat Valenciana published a press release stating that the investments in question ‘are entirely justified considering the profitability that the project aims to achieve’, thus denying that they are state subsidies. The EC suspected that the funding from the Valencian regional government might give the studio an unfair advantage over other European competitors. The Spanish authorities argued

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that the money was not a state subsidy, since the private sector would have invested on the same terms. Nevertheless, after examining the studio’s business case, the EC responded that it doubted a private investor would have provided 100% funding for a new, large-scale agent in a competitive market (Mundell 2008).

The difficulty of managing business and politics

Along with the difficulties mentioned in the previous section, another criticized aspect of the CDLL has been its political ties. As men-tioned above, the CDLL corporate company (La Ciudad de la Luz S.A.U.) was constituted in 2000 as a mixed limited company, with public and private capital. The Valencian government own 75% of the shares through the public entity Sociedad Parque Temático de Alicante S.A. (SPTA), and the remaining 25% belongs to the private company Producciones Aguamarga S.L.

In 2004, the private firm Aguamarga Studio Management was hired to handle the studio on a day-by-day basis. José Luis Olaizola, a well-known Spanish film producer and one of the initial partners, was appointed general man-ager. As mentioned above, former Pinewood Studios executive David Rance was also hired as operations manager, although he stepped aside in 2008. On its part, the Valencian government appoints the chief executive officer (director general) of the whole studio complex. From 2006 to 2009, this position was occupied by José María Rodríguez Galant, a local representative of the Popular Party. He was recently replaced by Elsa Martínez, the former director of a PR

agency, but who also served as a town coun-cillor for the Popular Party back in the 1990s (Evans 2009a).

According to some critical voices – especially those connected with the political opposition, the Socialist Party – the management of the CDLL has been negatively affected by these political connections. For the critics, the politi-cal interests have prevailed over the economic ones. To a certain extent, this seems to be true, as the CDLL managers admit that the stu-dio must be measured not only on economic terms, but on social and cultural terms as well: ‘It is not an economic project but a social one’ (Olaizola 2009). Similarly, Rodríguez Galant replied, a few months before being replaced:

I could do with a bit more of support to the project, because the CDLL belongs to Alicante not to a political party nor to Rodríguez Gal-ant. Above all, it is necessary to defend what generates employment and wealth, no matter who has built it up and manages it. (Rodríguez Galant 2009)

ConclusionsAfter describing the main pros and cons of the CDLL, it is time to offer some concluding remarks. The CDLL can be considered a quintessen-tial example of a ‘greenfields studio’, due to its peripheral location and its hoped-for impact on the region. It can be also considered an ‘extreme dream of production’ not entirely fulfilled. The developers behind the CDLL followed the motto ‘If you build it, they will come’, but as Goldsmith states ‘it is never quite so magically straightfor-

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ward and success is by no means as guaranteed as [this sentence] so beguilingly implies’ (Gold-smith 2010: 3). Effectively, most of the intended aims have not been achieved so far. The relative success in terms of regional development and local expenditure has not impeded significant losses (there is still no return on initial invest-ment). Although the CDLL has ardently sought to attract big-budget film productions, it has failed to become ‘the ideal place to host, from the very smallest to the very largest, American and Euro-pean productions’, as its website proposes. No major Hollywood movie has been shot there to date. The external competition is fierce, not only to attract Hollywood productions (some big titles have finally moved to other film studios), but also in order to attract Spanish ones (the case of Ágora). As a consequence, it has been difficult to uphold a regular production activity.

Therefore, the case of the CDLL reflects the difficulty of matching the ‘design interest’ and the ‘location interest’, especially when deal-ing with expensive film projects (blockbusters). Although the quality of CDLL’s infrastructure is outstanding, the economic benefits of shoot-ing there are not as competitive as they need to be. Despite the efforts of the regional govern-ment, tax incentives are not attractive enough. Additionally, the CDLL has suffered the negative effects of the variation in exchange rates (the US dollar versus the euro).

The CDLL is also an instance of managing uncertainty. It may very well represent why some authors consider ‘greenfields studios’ as ‘distinctively anomalous’ and ‘intrinsically volatile and vulnerable’ (O’Regan and Ward 2008: 156, 158). Although ‘vulnerability and volatility is as likely to be managed through becoming ever more integrated, connected, and attractive in terms of the range of services and incentives as it is becoming more “independent” and self-sustaining’ (O’Regan and Ward 2008: 159), this is not the case with the CDLL so far, as seen in the previous pages. Based on the results from this first five-year period, where the main aims have only been partially accomplished, some shadows are cast on its management vision and on the inherent perils of mixing business and politics.

In summary, the future viability of the CDLL is uncertain. For some industry experts the whole CDLL project is ‘a “pharaonic” enterprise difficult to manage in a profitable way’ (Anonymous film

industry consultant 2009). For the representa-tives of this studio complex, it is a question of patience and endurance: ‘to get consolidated as a competitive offer takes time’ (Olaizola 2009). As Ben Goldsmith concludes, ‘[t]he commitment to the vision of “build it and they will come” is global’, but as the case of the CDLL exempli-fies, ‘it is not such a straightforward sequence of cause and effect’ (Goldsmith 2010: 17). •

Contributor’s details

Alejandro Pardo is Head of the Department of Film, TV & Digital Media, University of Navarra, Spain. Among his books are The Europe-Hollywood Coopetition: Cooperation and Competition in the Global Film Industry (2007) and The Audiovisual Management Handbook (ed., 2002). He has also written several chapters on the film & TV industries, for instance ‘Hollywood at the Digital Crossroad: New Challenges, New Opportunities’ in The Media as a Driver of the Information Society: Economics, Management, Policies and Technologies (2009); and ‘Spanish Co-Productions: Commercial Need or Common Culture?’ in Zoom In, Zoom Out: Crossing Borders in Recent European Cinema (2007).

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010 I

ntelle

ct Ltd

Not for

distr

ibutio

n