Media : Spain Tries New Tack to Protect Filmmakers : The government had relied on subsidies to boost its industry. Now it’s limiting U.S. fare.

Hoping for a hit, Spanish director Jose Luis Garcia tried last fall to book the debut of his new movie into Madrid’s theaters at the peak of the Christmas season.

But his distributor, United International Pictures, decided instead to release “Tirano Banderas” (“Banderas the Tyrant”) in mid-January, at the close of the seasonal moviegoing gold rush. The reason: Nearly all the high-season dates had been reserved for what are considered better box-office bets in Spain--American movies.

“Tirano Banderas,” a satirical look at a Latin American dictator, drew modest interest in the capital when it was finally released and this spring is continuing an unremarkable run in the provinces.

“All of us who work in Spanish film are used to getting the bad dates,” lamented Garcia, who wrote the story for this year’s Oscar-winning foreign film, “Belle Epoque,” and has himself made several successful comedies.

Favoritism for American movies is not surprising, he said. Most Spanish film distributors went out of business years ago. The business is in the hands of Americans now.

Spanish movie makers complain that U.S. distributors unfairly squeeze Hollywood’s throwaways into theaters here--and thus squeeze out the locals--by selling package deals of one blockbuster U.S. film coupled with three or four B movies.

But change is coming. And the cavalry riding to the rescue of the Spanish film industry is--you guessed it--Spanish. New regulations passed by Parliament last month set ratios for screenings of American movies vis-a-vis Spanish or European films.

The regulations, sponsored by the Culture Ministry, pit Spain’s movie industry and its government against their American counterparts. Underlying the legislation are two basic questions:

* Is Spanish cinema on the ropes because of a Hollywood bully with bigger muscles?

* Or, have Spain’s directors and producers just forgotten how to entertain their compatriots, leaving distributors and theater owners to make their money by showing more popular American films?

It may be a bit of both. With a stable of directors like the late Luis Bunuel, Carlos Saura and current successes like Fernando Trueba and Pedro Almodovar, no one argues that all Spanish films are losers. But ironically, the Spanish government’s attempts to boost its film industry since 1984 may have sent crowds packing because the Culture Ministry doled out cash primarily for avant-garde film projects, some of which never made it to the theaters.

“Subsidies were given without rewarding success at the box office, without regard to what spectators wanted,” which was not avant-garde fare, acknowledged Pedro Perez, head of the Spanish Film Producers Assn.

There were few options, Perez said, because audiences here are too small to justify making extravagant mega-productions like “Jurassic Park.” The country’s box-office record is $10 million for Almodovar’s “Women on the Edge of a Nervous Breakdown,” but a typically successful Spanish film earns only about $2 million.

Whatever the causes, the market share of American films at Spanish box offices rose from 43% in 1966 to 80% in 1993, while Spanish directors’ share of their home market shrank from 20% to 10%.

Overall movie attendance plummeted by 78% during the same period, though Spanish filmmakers try to make up much of that loss with showings on TV, where Spanish cinema is still very popular, and residuals from increasing video sales and rentals.

Late last year, as the global talks of the General Agreement on Tariffs and Trade sped into their final stage, Spain’s film industry, echoing France’s ultimately successful campaign to restrict American films, went on the offensive. The industry lobbied Spain’s Socialist government for restraints. In December, the Spanish Cabinet issued a film decree just under the GATT deadline.

The law required big-city movie houses to show one day of a Spanish or European Union-produced film for every two days they show a U.S. film, or for every three days in cities with populations under 125,000.

But the government early this month agreed to keep the ratio 3 to 1 for all cities, after Spanish producers and theater owners and the U.S.-controlled distributors negotiated a compromise.

In addition, the new law stiffens longstanding rules for obtaining dubbing licenses, essential for high earnings in Spain since U.S. films are shown with subtitles only at a scattering of big-city theaters. Until now, distributors got one dubbing license for the debut of a Spanish film and up to three more, depending on the earnings. Distributors accumulated a backlog of tradable licenses that the government says eliminated any incentive to promote Spanish films.

The new rules set a maximum of two licenses per Spanish film, specify an expiration date of two years for each license and make them non-transferable. The government hopes the rules will encourage the U.S. distributors to promote Spanish films more.

The Clinton Administration, however, cried foul. U.S. Trade Representative Mickey Kantor complained about Spain’s law before Congress, and U.S. officials in Madrid say Washington may fight the law on the basis of multinational trade agreements to which Spain belongs. Direct trade reprisals against Spain would be a last resort.

More likely is a compromise that is beginning to emerge from negotiations between officials of both governments and separate talks between the Spanish and U.S. film industries.

At a recent meeting in London attended by U.S. studio heads, Spanish producers and Myron Karlin, chief operating officer of the Motion Picture Assn. of America, negotiators discussed self-regulation of the Spanish market, said Perez.

Enrique Balmaseda, director of the Culture Ministry’s Institute of Cinematography and Audiovisual Arts, says the talks aim “to balance the interest of both industries. The defense of Spanish film doesn’t have to prevent free access to the market.”