AS the deal Boyana Film studios privatisation deal nears its completion, the heat is rising in the exchange of fire among interested parties.

Three economy ministers and three heads of the Privatisation Agency (PA) have so far failed to complete one of the most controversial sell-off deals in this country. Complaints against the privatisation procedure, court actions, referrals to the prosecution and hundreds of media articles have so far accompanied a move that was supposed to revive the Bulgarian film industry, which has been in decline for about 20 years now.

According to David Varod, the head of Nu Image Bulgaria, the company that won the privatisation tender for Boyana Film, it is ghosts of the past from that same film industry who are opposing the successful completion of the deal. Varod spoke to The Sofia Echo on December 19.

Nu Image placed the highest bid of 12.2 million leva (about six million euro) for 95 per cent in Boyana Film in the tender held in February 2005, and pledged to invest a further 30.5 million leva (15 million euro) to upgrade the facilities of the studios. In late June, the PA declared Nu Image the winner of the tender and signed a preliminary privatisation contract with it.

However, the state has not yet enacted the agreement and Nu Image has been awaiting the authorities’ decision before deciding on its own action on the case.

After a series of failed court appeals against the contract signing, interest in the deal was revived on December 6 when Culture Minister Stefan Danailov made a clear statement that the Cabinet would like to suspend the privatisation of Boyana Film.

Danailov said that he had required the PA to negotiate a change to the deal, asking Nu Image to maintain the core activity of the filmmaking studios for 20 years, rather than the 10 years envisaged in the preliminary contract. Nu Image will also be banned from transactions involving the plot of land on the outskirts of Sofia - where the film studios are based - for 20 years, double the term specified in the preliminary contract.

Had Nu Image declined to accept the amendments, there was a great chance that the PA would scrap the preliminary deal on the sale of the film studios.

Varod says that the core activity of Boyana Film and its preservation has never been a problem for the completion of the deal. In his words, it is the “mortgage condition” that boggles his mind. The PA has asked the buyer to establish a mortgage on the land of Boyana Film for 20 years, and not on the buyer’s behalf, but on behalf of the state.

“They ask me to sign on the mortgage of the land for 20 years. Before that it was for 10 years. The problem is that when you do not have the first mortgage on the land and the government has it, you find it difficult to invest. What if I want to invest more money and not just the six plus 15 million euro on the privatisation deal? What if I believe that there is potential for larger growth? I cannot raise money in Bulgaria because I have nothing to mortgage,” Varod says, with some anger, of the clause.

He finds this development very frustrating, as he believes that developing Boyana Film will be of benefit not only to him but also to the Bulgarian state and the domestic film industry.

“I need to build at least 25 000 sq m of new stages in Boyana. Because, what do we have now? Just 2000 sq m of stages. This is a joke. Even now, Nu Image is working on more than 2000 sq m in Sofia. And we are talking about providing services to other companies,” Varod says.

Another aspect that he finds very odd is that some local filmmakers have suddenly started supporting his rivals in the tender for Boyana Film - Germany’s Bavaria Film and the UK’s Ealing Studios. And, Varod has some questions remaining unanswered…

“Why would these cinema people, the trade unions, Evgeni Mihailov (the studio’s government-appointed executive director currently resigned)… why would they speak and take sides in this argument? I am the largest movie producer in Bulgaria, I hold 70 per cent of the industry in this country. In fact, I created the industry here. And why do these people take side?” he asks.

Varod strongly believes that if Bavaria or Ealing are so resolute about taking care of Boyana, they would have offered a better price for it.

“Then, how come that I offered a price, which is 35 per cent higher? On my business plan, I have a 300 per cent higher offer. And these two companies, they have nothing to offer in Bulgaria, while I have already put millions here. Why have not they invested here so far? They have been here for two to three years, and they have not hired anyone. While I have been producing movies here all these years,” he says and wonders why people cannot find it easier “to believe in someone who has been here for seven years and has made 47 movies in Bulgaria”.

While Varod does not see Bavaria Film as a competitor, noting that it is mainly a TV producer, he says that Boyana Film is a bigger prize for Ealing, which he describes as the smallest studio in the UK.

“Ealing does not produce movies at all. Let me tell you the truth about Ealing. It was bought by two Israelis and was bought because of its land. They have no intention to run it as a studio but acquired it because Ealing is sitting in prime locations in London. I know exactly who bought it. They do not intend to make movies. They do not have money to make movies. This is a small studio that produces no movies. It just provides small service to maintain itself, not producing. If they find it hard to hold themselves there, how are they going to make it here,” asks Varod. He says that it is Ealing’s people who want to buy Boyana for its land.

According to some unofficial estimates, the studio’s land may be worth up to 350 million euro. Its value is pushed up by the fact that Boyana, a suburb in the outskirts of Sofia and on the slopes of Mount Vitosha, is home to lots of luxurious houses and residential compounds.

Filmmakers have been claiming since the very beginning of the privatisation procedure that the selection of Nu Image was not in the interests of Bulgarian cinema. They have always claimed that the PA has been favouring Nu Image, which according to the professionals had used Boyana Film to shoot movies for years, but had no high-quality productions shown in theatres.  

Varod refutes any such suspicion. He says that the privatisation process has continuously been changed to fit but one person - Evgeni Mihailov. The now former head of the studios is among the fiercest critics of the selection of Nu Image as a buyer.

In Varod’s words, Mihailov was the guy that was “saying all the way through that this is the best deal for Bulgaria, that privatisation is needed and it does not matter who will take it, as long as he invests in its development”.

“He was saying it all the way through until he found out that he had lost. Now, all of a sudden it is the issue of the land. Now it is fit for me, now it is fit for this one, for that one… If it was fit for me, as they say, and if I had deals like they say (with the government or the PA), why I didn’t take it two years ago? Why am I still struggling to get Boyana?” Varod says.

He does not believe that the filmmakers criticising him and the deal with Nu Image are impartial. They - the directors and other professionals - are just like ghosts from the past of Bulgaria’s filming industry, he says.

“Who knows them? I am 70 per cent of the industry and my employees do not know who these people are. They are not representing the real film industry in Bulgaria. I have done 47 movies. There are more than 600 people working for me. My employees do not know them and how can they claim to be representing the guild when my guys do not know them? They are just representing a group of some old directors. They have not been working for at least 10 years. What has Boyana done in the past 10 years?” Varod asks.

He believes that as a business Boyana Film is a fake, “a run-down business”.

“The buildings are crumbling, and they are not putting a cent into the buildings, all the infrastructure is falling apart and the walls are even cracking. Even if Evgeni was a genius he would not make much money there. Because he does not have enough sq m of stages to make anything serious. Not with 2000 sq m. It is not enough for one decent movie and how can you make five or six movies simultaneously? It is impossible,” Varod says.

Another painful discovery for him was the studio lab in Boyana, which has been equipped by Kodak.

“Speaking of the lab, 47 per cent of Boyana’s income comes from it. How can you then sell the lab for $160 000?  I am one of the big customers of the lab. I have put more than 5 million there. So, how can you sell the lab for just $160 000?” Varod asks.

He is very confident when responding to other two matters that are the subject of speculation - that Nu Image does not care about the Bulgarian film industry and that the company has been doing nothing else but low-profile productions for video distribution.

“I am ready to make a lot more Bulgarian movies that I am asked to do. I have the obligation for two movies a year under the privatisation contract. But, I am going to do more than that if the government works with me. I will be the partner for Bulgarian movies,” he says, adding that he believes in the Bulgarian industry.

“The better movies in the world, the quality movies come from Europe, from Italy, Spain, Greece, Yugoslavia, with the successful films of Kosturitsa, as well as some good Bulgarian movies in the past. And I do not see a reason why Bulgaria could not make good movies today. But, I am also sceptical because the way the studio is run now, the old directors are monopolists. Some of the young directors in Bulgaria are not getting any options. And the old ones, they are fighting against me,” he says.

“Nu Image is a success because we have good distribution. Our budgets, the names of directors and stars like Nicholas Cage, John Travolta, Josh Hartnet, Bruce Willis, Scarlet Johansson, Morgan Freeman… do they speak of low-profile productions?” Varod asks.

He says that Nu Image is two companies - Nu Image and Millennium (the second one popular all over the world). And in his words it is their activity all over the world that Bulgarian media and critics always fail to recognise.

“Yes, we also do some small movies but it is a business. They accuse us of making mainly action movies. But, action movies today are popular. This is not an argument about culture here. If 70 per cent of the audience wants to see action movies, what am I going to make? In Bulgaria we did small movies and we slowly started moving towards bigger ones. It is a process of growth. When I came to Bulgaria, I had to buy equipment, hire professionals and spend a lot of money. I started from zero. High profile actors are expensive - first you make something which costs you less and after that spend a lot of money because of the risk,” Varod says.

His office walls and desks are covered with designs and blue prints of what Nu Image intend to build in Boyana. And he is determined to win the deal, even if he has to fight a battle in court. But, after all, he - like many other people in this country - believes that the future of Boyana Film rests in the hands of the authorities.

They are the ones that have to make the final step. And judging by the history of the privatisation process in Bulgaria in the past years, it will not be an easy step.