The film industry generated €94 million in the economy last year, according to a government-commissioned report, but it remains unclear how the figures – which economist sources believe are ‘overstretched’ – were calculated.
The report concluded that all productions spent a combined total of €81 million while working in Malta last year – €4 million less than the figure (€85 million) cited by Tourism Minister Clayton Bartolo last January.
Some €53 million of that was spent on Maltese companies and individuals, the report says. However, after the government returned €31 million in cash rebates, that would leave €22 million in the local economy.
But the report concludes that a “multiplier effect” means that sum is much higher, at €94 million.
The long-promised report on the impact of the film rebate on the economy was published without fanfare recently.
The Tourism Ministry and the Malta Film Commission have long been criticised over huge taxpayer spending – most of which often remains unexplained and undisclosed.
The report concludes that for every €1 spent in cash rebates, the economy takes back €3.
Figure balloons after including revenue generated by tourists
It is very unclear, however, how the report – authored by Malta University Consulting and the Film Commission – reached the figure of €94m. It appears the number ballooned because it includes revenue generated from a fraction of tourists who, in a 2019 study, said one of the reasons they considered visiting Malta was because it served as a set for several films.
But top film insiders questioned how that tourist spending could have been attributed to the film industry when these tourists specifically said filming locations were just one of the reasons, and not the mean reason for visiting Malta.“They would have probably come to Malta anyway without the film attractions,” one film insider said. “The film industry surely cannot take credit for the revenue generated by those tourists.”
Senior economists told Times of Malta that while the report offers some answers, it poses more questions as to how the figures were calculated.
In one paragraph, the report concludes that manufacturing sectors saw “a return of circa 29% due to increased expenditure in that category due to the nature of the productions, followed by the retail and wholesale industry exhibiting a return of circa 10% in Gross Value Added to direct local expenditure”.
It does not explain how it reached those figures, and sources believe they are likely “exaggerated” and “overstretched”.
The report further says that €36 million is also estimated to have been generated in taxes, meaning that for every €1 of taxpayer money handed out in cash rebates, the government got €1.14 in return. It is unclear how the report arrived at these figures.
The Malta Film Commission and the Tourism Ministry have not replied to questions from Times of Malta asking for clarity on the figures.
The report acknowledges, however, that the economic impact is “difficult to quantify with absolute certainty” because many other factors are at play in the way the film industry impacts the economy.
Report was first promised in July
The report was first promised by Tourism Minister Clayton Bartolo in July, following media pressure on the Malta Film Commission’s unexplained spending of millions of euros in taxpayers’ money.
Bartolo and Film Commissioner Johann Grech first revealed its conclusions in September but would not publish the entire document, citing legal advice.
A few weeks later Bartolo announced he would publish an abridged version, which some industry sources haphazardly came across this month on a webpage – cashrebate.mt – without the commission or the ministry publicly announcing its release.
Malta’s cash rebate is a generous scheme that gives production companies 40 per cent cash back on almost all expenses incurred while working in Malta – including accommodation, flights to and from EU and UK countries, labour and set construction costs, wardrobe and costume purchases, salaries of crew and actors, a portion of the salaries of the highest paid actors, directors and producers, per diems, location fees, rental fees, shipping, transport and myriad other services.
All the films and television series shot in Malta over the past five years will have received at least €143 million in cash rebates in total.
Malta hosted a record 24 film and TV productions in 2022, which spent a combined total of €81 million while working in Malta.
How many local jobs?
The report concludes the local film industry sustained the full-time equivalent of 1,772 jobs last year and says only 22 per cent of cast and crew in every production are foreign, meaning the industry is employing far more locals.
But film insiders said that while many of the smaller productions might employ an average of just 22 per cent foreign cast and crew as opposed to 78 per cent locals, the bigger blockbusters like Napoleon and Gladiator 2 generally employ half foreign and half local cast and crew, and in those productions, the non-locals get a much bigger slice of the cake in terms of salaries and cash rebates.
To put things into perspective, all local and foreign TV and film productions last year were given under €3.5 million each in cash rebates except for the Napoleon biopic alone, which got almost €12.8 million.
Industry insiders also said the bigger productions often rent out most of their high-end, sophisticated and expensive equipment overseas.
The report does note that “to retain a more conservative estimate, the percentage of non-Malta element was calculated on other expenditure categories and reduced from the total direct local expenditure”, but it does not specify what those categories are.
It is unclear whether the report’s claim that €3 is left in the economy for every €1 spent will change this year, when Malta has committed itself to issue more than double last year’s amount in rebates.Malta has so far promised €69 million in rebates this year, including €47 million to Gladiator 2.
Screen tourism
The report revealed screen tourism in Malta is almost negligible. It said an MTA study showed that in 2019, less than three per cent of tourists who came to Malta considered it as a holiday destination “in part due to screen tourism”.
The report said the three dinosaur displays erected as part of the promotion for Jurassic World last year “attracted hundreds of tourists and franchise fanatics” and a global press tour organised by Universal Pictures attracted “more than 20 entertainment journalists and influencers” to the island.
The three dinosaur displays alone cost €37,000, Bartolo had told parliament last year, and the film premiere hosted in Malta cost another €9,000.
Meanwhile, the rest of the Film Commission’s taxpayer spending remains shrouded in mystery.
Along with the cash rebates, the Film Commission also forked out €1.3 million on Malta Film Week last year and this year’s lavish Mediterrane Film Festival spending has been kept under wraps.
Times of Malta filed a freedom of information request for a financial report on the film festival’s expenses, but it was denied, with the film commission saying the information “is in the process of being published”.