New Czech rebate plan spells the end of large-scale film productions in Prague

Carnival Row. The Wheel of Time. Extraction 2.

These kinds of projects will likely not be returning to the Czech Republic under the country’s new plan for film incentives, which has been approved by both houses of Czech parliament and only awaits president Miloš Zeman’s signature before coming into law.

The new plan is good news for the immediate future: the country has gone the first eight months of 2022 without an incentives plan in place, meaning no new projects have been able to register to film in the Czech Republic since last December. Currently-filming productions like The Crow and A Small Light had managed to register last year, but dozens of other projects have been patiently waiting for registrations to reopen.

The new plan also allocates an additional 570 million crowns to the country’s budget for film incentives, bringing it to a total of around 1.4 billion crowns (about $60 million).

But here’s the kicker: incentives have been capped at 150 million crowns (about $6 million) per project. At the current 20% rebate – which has not been upped under the new plan despite lagging behind Hungary (30%), Poland (30%), Slovakia (25%), and even Germany (25%) – that means foreign productions can spend 750 million crowns (about $30 million) in the Czech Republic before being cut off.

For thrifty filmmakers, Czech locations can still make a splash. In the recent Netflix hit The Gray Man, Prague lights up the screen throughout the movie, playing itself and standing in for exotic locations such as Bangkok, Baku, Vienna, and Berlin.

Despite Prague’s prominent presence throughout the movie, The Gray Man shot for only about three weeks in the Czech capital. It was awarded about 140 million crowns in incentives, meaning the production spent a total of around 700 crowns in the Czech Republic. Of The Gray Man’s purported $200 million budget, only about $30 million was spent in Prague, with the majority of production taking place in Los Angeles.

The new Czech incentive plan may allow for special cases like that, but what about other major productions? After their positive experience shooting The Gray Man in Prague, producers Joe and Anthony Russo brought their next project to the Czech capital: Extraction 2, starring Chris Hemsworth. Unlike their previous film, this one was almost entirely filmed on Czech locations over a three-month shoot.

While final figures aren’t available, the Czech Film Fund allocated Extraction 2 a total of 365 million crowns ($15 million) in potential incentives, estimating that the project would spend 1.8 billion crowns ($75 million) in the country. That’s still light for a major action movie — but more than twice as expensive as allocated for in the Czech Republic’s new tax rebate plan.

Extraction 2 shot on the outskirts of Prague, and Czech locations may not even be recognizable in the final film. The Gray Man makes for a better advertisement for the Czech Republic. But Extraction 2 pumped nearly two billion crowns into a local economy recovering from the pandemic, and that won’t happen again under the country’s new plan.

The second season of The Wheel of Time was allocated just under 420 million crowns ($18 million) in rebates, while Carnival Row came in at about 400 million crowns ($17 million). Together, Amazon has spent somewhere in the range of six billion crowns ($250 million) on the production of multiple seasons of both series in Prague, money that isn’t likely to be coming back into the local economy in the future.

Within the local industry, thousands of jobs will be lost under the Czech Republic’s new incentives plan, and those jobs are not guaranteed to be replaced within smaller productions. Mid-sized projects may be incentivized to bring in their own cast and crew rather than make use of local talent to avoid crossing the 750 million crown threshold on local spend.

Other local sectors will also suffer. Only about 40 percent of a film production’s spend goes towards jobs within the film industry; the other 60 percent goes towards transportation, accommodation, catering, and elsewhere. Film incentives are a great way to boost foreign spending in a local economy, which is why the Czech Republic’s neighbors are willing to offer up to 30 percent in rebates.

Prague saw a boom in foreign filmmaking in the late 1990s and 2000s, with major Hollywood productions like Mission: Impossible, The Bourne Identity, Blade II, xXx, Hellboy, Casino Royale, The Chronicles of Narnia, and many others all making use of wonderful locations and a talented local industry.

But the Czech Republic was late to the party when other countries began introducing tax rebate plans in the mid-2000s, and major productions left for hubs like Budapest to save significant sums of money. Despite the introduction of an incentives plan in 2012 and a recent boom over the past few years, productions of that size have never really returned.

The Czech Republic’s new government had the opportunity to catch up to its neighbors this year while debating a new budget for film incentives, and perhaps even raise its rebates to competitive levels. Instead, they appear to have inexplicably put the final nail in the coffin for large-scale productions in Prague.

While the additional funds placed into the country’s incentive plan are being touted as an improvement, the sad reality is that they may not be needed once large productions are removed from the equation.