How Studio Babelsberg Beat the Odds – The Hollywood Reporter


When Christoph Fisser, along with his partner Carl L. Woebcken, bought the historic Studio Babelsberg in Germany from Vivendi Universal in 2004, the asking price was 1 euro.

Vivendi had acquired Babelsberg, previously run by East German state film group DEFA, after the fall of the Berlin Wall and had invested more than half a billion dollars to modernize the studio’s infrastructure. “They invested hundreds of millions and every year for 12 years they lost money,” Fisser says. “In the end, they were happy to get rid of it.”

Vivendi was so sure Babelsberg would go bankrupt that it gave the new owners 18 million euros ($20.3 million) to keep them afloat for the first year. “Under German bankruptcy law, if you sell a business and it goes bankrupt in the first year, creditors can sue the former owners,” says Fisser. “So we took the money and invested it.”

It paid off. Almost 20 years and more than 100 productions later, including that of Quentin Tarantino Inglourious Basterds, by Wes Anderson The Grand Budapest Hotel, by Steven Spielberg bridge of spies and that of Lana Wachowski The Matrix Resurrections — Fisser and his team have transformed Babelsberg, which is located just outside of Berlin, from a basket case into one of the most technically advanced backlots in the world.

No less an authority than Netflix’s chief content officer and co-CEO Ted Sarandos has called Babelsberg’s new LED studio – which offers virtual production technology that allows filmmakers to digitally recreate distant, even imaginary locations, without leaving the confines of a sound stage – “the best anywhere in the world.”

In January, TPG Real Estate Partners, part of private equity giant TPG, which also owns Cinespace, the second-largest sound stage operator in North America, as well as Creative Artists Agency (CAA) and DirecTV, acquired a stake majority in Babelsberg. The price: 4.1 euros ($4.6) per share, a price that values ​​Babelsberg in eight figures. “Not a bad rate of return on that original euro,” jokes Fisser.

Talk to THR‘s Etan Vlessing, he also discussed why he sold the stake now, future plans for Babelsberg and film co-production prospects.

Why did you sell to TPG?

We received many, in fact an incredible number, of offers. Last year, all the major funds active in this field approached us. The consideration was: should we bring in another investor? And if we do, it should be someone who understands our business and helps us, as a shareholder, helps the studio. The TPG are very solid financially, and they are ambitious, they want to invest in the media. And the fact that they own CAA – which now wants to acquire ICM, making them even bigger – is another plus.

At Studio Babelsberg, we are in constant contact with the studios, and we have producers that we know well who always come back to us. But for the productions that the agencies put together, where CAA provides the funding and sets things up, in the past, we were always too late. By the time we heard about the plans, they had already gone elsewhere. We expect that to change now. This does not mean that all CAA projects will come to Babelsberg, but at least we will know them and be able to compete for them.

What will change on the management side? Are you and Carl still in charge?

We are committed to the studio for the long term. We are still invested in this business and as long as [TPG] leave it to us, we’ll keep making things work. I think anyone who has done business with us knows how much we love running this studio. It is a pleasure to be able to work here. It’s always been like that, and I hope it will continue like that. We didn’t sell the business to retire. Completely the opposite.

How independent will Studio Babelsberg be from other TPG companies, including other studios in its Cinespace group?

We will be completely independent. We will be grouped under the Cinespace name, but we will remain completely independent in our decisions, in the projects we undertake and in the management of the company. I think TPG understood that Germany is a very special case, and they know the values ​​of the relationships we have built here over many years.

Why sell now? Is it because the whole studio sector is expanding?

Exactly that. It’s time for investments. We built our LED studio and completed our first project [drama series 1899] for Netflix. It was a major learning process for everyone, but we see that it opens up completely new possibilities for shooting movies. It’s much, much better than green screen. This allows for a completely different quality. It’s a different way of producing, but we are convinced that LED technology is the future. Of course, there are directors who love greenscreen, because they can add things in post. With the LED screen you have the final image on the monitor. So you have more pre-production and less post-production.

It’s not just that the images look better, the shadows are sharper and don’t need retouching like they do on a green screen. It’s also a greener technology because you don’t have to fly around the world, you can literally make the movie here and play the world in your LED studio. It’s incredible. We can go from Mars to the jungles of Vietnam to the Alps. Everything is possible. And because a studio, in corona times, is an easier place to isolate and easier to protect, that’s an added bonus. Not to mention it’s much, much easier to budget for. We are convinced that LED technology will be the next revolution for cinema. But it requires a lot of investment. Having a solid financial partner behind us greatly facilitates our task.

These days most studios seem to be investing in expansion – new backlots and sound stages are being built everywhere these days…

There is a huge demand right now as all the streamers are starting to produce themselves. It was a huge boom for the studio business. We’ll probably build more ourselves, but given Germany’s current tax incentive model, that doesn’t make sense to us. We’ve got a good size right now, we’re big enough to shoot two huge projects — Matrix Resurrections and [the upcoming Tom Holland-starrer] Unexplored – parallel to each other. But Germany’s tax incentive model just isn’t competitive enough to attract enough big productions to justify expanding our studio space.

But we are amazed at what is happening right now. Studios are springing up everywhere: in the Philippines, in Mauritius. Everyone is building right now. They build like crazy in England, Ireland, everywhere. But you can build all the studio space you want. In the end, you reach the crew limit. It’s still a business, thank God, where people matter. You can have the best soundstages, and it won’t help at all if you don’t have the crew. That’s my question for all the new studios being built in England: can you serve all those productions that are supposed to fill them?

Will Studio Babelsberg continue to produce films yourself or as a co-producer?

We will continue to do both: work as a pure service provider, but also produce by ourselves. We want to develop and produce more of our own original content, although the focus here is on German language productions.

What has been the impact of the coronavirus pandemic on studio activity?

We got through the crown incredibly well. We didn’t lose a single day of filming because a production had to be stopped. I mean look what happened with Impossible mission, who had to stop three times! We were also lucky. Matrix Resurrections was supposed to start the day Germany went into lockdown, but we were able to push that.

So far things are going well with omicron as well. We are currently in pre-production for filming scheduled for March. We hope that the infection curve will decrease by then and that we will be in a much better situation. But it’s hard. We are constantly testing. We are incredibly strict with social distancing rules, with disinfection, with the use of closed crew bubbles to avoid cross contamination. And, with only a few isolated cases, we escaped unscathed.

In 2004, when you bought the Babelsberg studio from Vivendi Universal for just one euro, what were the turning points in the studio’s success story?

Before we took over, Roman Polanski had done The pianist here. We had nothing to do with the movie, but it won three Oscars, and it was a great calling card for us and the studio. And came Bourne Supremacy, which showed that we could produce a very big film. V for Vendetta, which has become such a cult film. And it was through this film that we met [Matrix producer] Grant Hill, who introduced us to the Wachowskis. It was incredibly lucky. They brought speed racer here. It wasn’t a huge hit, but it was a really big movie, and it showed people that we could handle a project of that size. At the time, Americans thought there was no one here who could make movies. They brought 150 people with them. It’s completely changed. Now they don’t need to bring anyone.

How is this year going? What productions do you have in preparation?

Winter is traditionally a downtime for us, when we’re doing pre-production unless there’s a movie, like bridge of spies, who wants the cold weather of Berlin. Right now, we have a few projects due to shoot in March and April, and we’re in talks on several more. I can’t name names, but we are expecting a very good year.

Interview edited for length and clarity.

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