Prague loses another big-ticket Hollywood production


    In another blow to the fortunes of the Czech Republic's film industry, production of fhe latest sequel of the Chronicles of Narnia franchise (www.narnia.com), The Voyage of the Dawn Treader, will take place in Malta and New Zealand.

    Producer Walt Disney Pictures (www.disneypictures.com) decided to change its plans and not produce the $200 million film in Prague, Vladimír Kuba, director of Barrandov Studio, said Monday.

    "We are very disappointed," Kuba told Czech television

    Both previous Chronicles of Narnia-T he Lion, the Witch and the Wardrobe, released in 2005, and Prince Kaspian, set for release in May 2008, were produced in Prague with some scenes shot in north Bohemia. Dawn Treader is set for release in 2010. Earlier this year, Universal Pictures (www.universalpictures.com) dropped plans to shoot Hellboy2, the sequel to its 2004 hit, and Barrandov and settled instead on the newly opened Korda Studios (www.kordastudios.org) in Hungary.

    "American producers were very satisfied both with Czech labor, film services we provided and exteriors," said Kuba. "However, they found out that Malta and New Zealand are cheaper for them at the moment."

    Barrandov Studio has not yet assessed revenue loss from the decision. Kuba estimated about 250 Czech film professionals worked on the last Narnia movie, according to the Czech news agency ČTK.

    The Czech Republic has been losing business from Hollywood producers to other countries in the region, such as Hungary, Romania, Bulgaria and even Ukraine with better tax benefits. The advantages it provided for foreign investors for the last decade, such as splendid exteriors and low prices for rent and labour, cannot match such incentives as Hungary's 20% rebate of taxes on production costs.

    In 2003, major Hollywood studios spent about 5 billion crowns (€179 million) in the Czech republic. In 2006, the figure dropped to 1.4 billion crowns (€50 million), according to the Czech Association of Film producers or APA (www.asociaceproducentu.cz) The figure will be even lower this year.

    Czech authorities are preparing to put the country on a par with its Central European neighbours by establishing tax exemptions for foreign films as part of the "Tax industry Support Code" being prepared by the government. However, the exemption won't be valid before 2009.