23-06-2011

Government Decision Closes MMK

Written by FNE Staff

BUDAPEST: The Hungarian government will close the troubled Hungarian Motion Picture Foundation (www.mmka.hu).

The task of funding support for new film production projects will be transferred to the new Hungarian National Film Fund according to information published in the official government publication, the Hungarian Gazette. The Gazette published the government decision which was signed by Hungarian PM Viktor Orban on 21 June 2011. The decision states that MMK must pay its debts and that it will be closed immediately. Hungarian film producers that signed contracts with MMK are owed about 35-40m euros.

The government blocked about 60% of funding to MMK in summer of 2010 leaving MMK unable to pay contracts it had signed with Hungarian producers and cinema owners. At the end of 2010 MMK's budget for 2011 was cut by 80% to 1035 billion HUF- about 4m euros. But even this promised amount was not delivered to the heavily indebted MMK as the Ministry of National Resourecs (http://www.kormany.hu/hu/nemzeti-eroforras-miniszterium) has refused to sign the contract with MMK for 2011.

Under the new plan film production would be supported by the Hungarian National Film Fund, and it is assumed that the Ministry of Natural Resources will support film distribution, exhibition, training and publishing although this has not been announced yet. Many film production companies, art house cinemas and other film groups are facing bankruptcy if the grant contracts they signed are not paid.

Under the Hungarian system the recipient of the grant had to borrow the money from the bank to implement the project and then repaid the loan when MMK paid the grant. Now the banks are demanding the producers and others who signed MMK grant contracts repay the money.

MMK has debts of about 10 bln HUF, with about 5 bln HUF connected to contracts backed by the banks. MMK has assets of about 10 bln HUF. MMK assets include two valuable properties, MAFILM Film Studios (www.mafilm.hu) and Hungarian Filmlab (http://www.filmlab.hu/en/).