The producers of an upcoming James Bond film say they haven't made changes to their script in exchange for a Mexican incentive package, but experts in the field of film incentives say it's unclear why the studio would deny making the deal it did.
Tax Analysts reported weeks ago on the extent of the changes, which some observers believed went beyond the norm, with records hacked from Sony Pictures Entertainment indicating that whoever was providing the incentives was dictating decisions regarding casting, characters, and scenery.
After the story was picked up by local media in Mexico City, where the film had just begun shooting, producer Michael Wilson called a press conference where he acknowledged having received incentives but denied that they influenced the script.
"Everywhere we go, we have incentives," Wilson said. "Sometimes they're tax incentives, sometimes they're other kinds of incentives. You can get cooperation or you get things given to you that you'd have to pay for, for free."
In this case, he said, they came from a "joint venture" of private entities looking to support tourism in Mexico, including Grupo Vidanta, a Mexico-based hotel chain, and Grupo Alemán, which owns budget airline Interjet.
Wilson acknowledged also that the government provided assistance of various forms, including help with permitting, logistics, consulting, and making an introduction to the private entities investing in the film, but he didn't say whether they provided any tax benefits.
Whatever form the incentives took, Wilson repeatedly denied that they led to any changes in the film. "In truth, there's nothing in the script that we haven't had in the script before," he said.
Tax Analysts reached out to Sony to clarify the arrangement, but its spokesmen did not answer any questions.
Records Show Changes Made in Line With Mexicans' Demands
Despite Wilson's assertions, the leaked e-mails make it clear not only that the studio believed there were strings attached to the incentives they were pursuing, but also that changes were made -- whether that was to satisfy the Mexican demands or simply as part of a strange coincidence.
An October 13, 2014, memo lays out exactly what the studio believed it needed to do to maintain what it called the "Mexican deal":
- cast a "known Mexican actress";
- ensure that an assassin in the Mexico City scene is not Mexican;
- change the assassin's target from the mayor of Mexico City to an "international figurehead";
- include a helicopter flyover with shots of modern buildings in the city;
- use a "Special Police Force"; and
- include at least a four-minute sequence filmed in Mexico.
All of these items appear to apply to the opening scene of Spectre, in which Bond chases an assassin named Marco Sciarra through a Day of the Dead festival in Mexico City.
The first element was satisfied about a week after it was first reported by Tax Analysts, when the studio announced that it had hired Mexican actress Stephanie Sigman to fill the role of Estrella.
The second element may never have been at issue, as the script indicates that the screenwriters originally intended for Sciarra to be an Italian.
The third element was satisfied with changes to the film shown in the differences between a version of the script dated October 17, 2014, and a scene outline that producer Barbara Broccoli sent to studio heads on November 9, 2014.
The script was being finished just as executives were distributing the memo with criteria for the incentives, and Broccoli's outline came a few weeks later with just the change needed.
Several references in the script indicated that the festival would include a speech by the mayor -- known officially as the governor of the Federal District. For instance, the notes for shot 11 call for "several posters for the governor's speech in the Estadio Azteca Stadium."
But Broccoli had pulled the mayor out, and now shot 11 said that as Bond chased Sciarra through the festival, "ambassador posters are on walls."
Those two documents also indicate that the producers were planning to make changes to satisfy the fourth element. While the script initially called for a shot of Bond using a helicopter to flee the Zócalo, a centuries-old city center dating to Aztec times, Broccoli's outline instead has him "taking off into the Mexican skyline."
It's unclear exactly what was expected regarding the fifth element, but perhaps the "police guards" mentioned in the first page of the script had to be replaced with guards from a different agency.
The final element -- the inclusion of a four-minute Mexican scene -- was satisfied only because the screenwriters added the Day of the Dead festival.
Wilson said that the screenwriters had been planning all along to open the film with that scene, but a March 9, 2014, e-mail suggests otherwise.
In that e-mail -- a set of script notes among studio executives -- then Sony executive Amy Pascal noted that the movie opens with Bond in a cage match, as part of a scene that features the movie's main antagonist, rather than Sciarra, who is killed in the first few pages of the revised script.
That leaves the film with four changes that seem likely to have been made in exchange for the Mexican incentive, while one element never needed to be changed.
Press Conference Offers Little Clarity on Incentive Structure
Wilson's explanation of the incentives that the film was seeking did little to clear up exactly how Sony managed to find as much as $20 million in incentives for a film that appears not to have taken advantage of Mexico's federal or state-level offerings.
Wilson said that private groups had provided financial support, and he emphasized the practical and logistical nature of the support from the government. But a report from Forbes said that the Mexican tourism minister has since acknowledged a "minority" stake in the film.
Also unclear is what the so-called "investors" in Spectre can expect to receive in return when the film turns a profit as expected.
While Sony has refused to answer any questions from Tax Analysts about this arrangement or anything else, some experts believe that the producers may have worked out an arrangement in which the government funnels money to the project through intermediaries, rather than providing cash payments or tax subsidies.
John Hadity of EP Financial Solutions, which helps producers find and monetize film incentives, struggled to imagine a scenario in which private businesses would simply front up to $20 million to film producers, especially in a country where costs are so low.
"While on the one hand, it may be true, on the other hand, that's a substantial amount of money to be raised from private pockets," Hadity said.
But he said that the right mix of businesses could provide a substantial savings through in-kind gifts, especially if Mexican authorities then permitted those gifts to be written off for tax purposes, leaving the vendor with a tax break and the studio with something just as good.
"If it alleviates any kind of stress off any particular line item in the budget, that's just as good as an incentive, and people do do that," Hadity said. "I've actually known film commissioners who broker deals with productions so they can get stuff like that."
Hadity said he has seen other instances in which a film commissioner without access to direct funding mechanisms facilitates discounts for producers, which might in turn make the vendor eligible for a tax break for infrastructure or something similar.
"While they can't underwrite it or write a check from the government, they can certainly use their voice as a government person to entice and engage people that could help," Hadity said. "That does happen."
Michael Jimerson, an entertainment lawyer in Beverly Hills, said he has seen similar transactions in which tourism officials take the lead instead of the film commission, having pursued a similar strategy for a project that wanted to shoot in Puerto Rico.
"They're all very closely connected," Jimerson said. "When you start dealing with tourism and film incentives and people coming in, it's all the same kind of conversation. And it doesn't surprise me that there would be the kind of connection, or chain of command, or chain of bureaucracy that you described."
And of course, if the group is fronting as much as $20 million in Mexico, it would be even less surprising that they secured some promises from the producers in exchange, he said.
"If I'm putting up $20 million, I get to be as petty as I need to be or want to be. And sometimes that's all I can be is petty," Jimerson said. "But if I'm responsible for $20 million, I'm going to be asking for as much as I can get, especially from a film that may generate a billion dollars or two."
While the revelation of such demands appears to be the part that has Spectre producers feeling the most defensive, Hadity said that the triumph of business interests over the creative process probably doesn't need to be cause for too much embarrassment.
Nearly every film being made is chasing after incentives, and in many cases, he said, that means passing a cultural test imposed by a foreign country. Although there isn't officially such a test in Mexico, he said common sense could still require that some concessions be made.
"It's very often the case where the story needs to be somewhat adapted so you really are supporting the whole Mexican essence of the film," Hadity said. "If you're going to be able to get subsidies from Mexico, then you have to make sure that -- absent a cultural test -- you at least are doing something."
Still, he saw a possibility that producers could worry about setting a bad precedent or ceding too much control to those who underwrite a film, especially in an industry that is perpetually fighting government censors around the world.
Hadity couldn't say which one has ensnared Bond this time around, but he said that enabling true censorship looks worse for a producer than a cultural test, even if it's applied to only a single film.
"It's not a formal test, but they've kind of done that for this production," Hadity said. "Or they have in essence allowed their Mexican partners on this to drive the creative bus a little bit. The former raises a lot of questions, but the latter raises even more questions."
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