The Cash Flow Challenge And Why Raising Money Is Only The Beginning In Spain: Key Takeaways From PRODU Webinar

Helena Suárez, partner at ECIJA, and Andrés Sánchez, founding partner and CFO of Filmika Audiovisual, offered a comprehensive view on how legal certainty and strategic financial planning are essential pillars for the success of any co-production. This was discussed during the webinar Investing in Spain: The Engine of Production, Its Legality and Professional Future, promoted by PRODU as part of the special feature Spain as Europe’s Audiovisual Hub.

Helena Suárez emphasized the importance of regulating Intellectual Property (IP) from the development stage (deal memos). According to the ECIJA specialist, Spain has strong co-production agreements, especially with Ibero-America, but she warned that ownership of a work stems from contributions to the joint project. “It is essential to clearly establish in the contract how IP percentages are distributed and under what conditions rights would revert if financing falls through,” Suárez noted.

She also issued a key warning regarding the “Spanish nationality” of productions: for a project to qualify as 100% Spanish and access certain benefits, 75% of the crew must have European nationality or residency. “Sometimes artistic talent is non-European due to script requirements, and that can make it harder for the project to qualify as a Spanish work. It’s not all ‘show me the money’; you need to understand the fine print of the law,” she added, also mentioning the complexities of regional incentives such as those in the Basque Country, which are tied to language requirements.

BEYOND THE BUSINESS PLAN

The CFO of Filmika Audiovisual highlighted that, although Spain is competitive compared to territories like Wales or New Mexico, the main challenge is not just “raising the money,” but managing cash flow.

Sánchez explained that traditional banks are often reluctant to finance audiovisual projects based on a company’s creditworthiness, instead requiring tangible contracts or guarantees from entities such as Crea SGR.

“We casually talk about budgets of 2 or 3 million euros as something ‘small,’ but guaranteeing those amounts for an independent production company is a huge challenge,” Sánchez stated.

Both agreed that producers must act proactively—avoiding being a “CSI” who analyzes why a project died, and instead becoming a “Dr. House” who finds the cure before shooting begins. Among the identified risks, they highlighted:

VAT impact: A factor that can disrupt cash flow structures, especially when working with foreign platforms that do not pay it immediately.

Investor timing: The difficulty of securing disbursements in the first months of the year due to private investors seeking higher Internal Rate of Return (IRR).

Track record: The need to demonstrate professional credibility to avoid being excluded from major platforms’ “Originals” projects.

THE NEW ROLE OF BRANDS

According to the panelists, the relationship between brands and audiovisual production in Spain is undergoing a structural transformation. What was once limited to physical product presence on screen—traditional product placement—is evolving into a financing and creative model where brands become co-producers of organic content.

They also warned about regulatory risks and new opportunities that branded content offers compared to the restrictions imposed by streaming platforms.

For Helena Suárez, traditional product placement is losing relevance in financing plans, largely due to strict streaming platform policies. “My recommendation is: be careful with product placements. Most platforms restrict their use and generally prohibit it unless authorized. If our content aims to be an ‘original’ or seeks strong international distribution, we should not rely on brands in this way in the financing plan, as it can seriously hinder license sales,” explained the ECIJA partner.

Suárez stressed that Spanish regulations require integration to be organic and never explicit advertising. “I always use *The Truman Show* as an example; that film shows exactly what cannot be done. Platforms are also starting to limit trade-offs (product-for-service exchanges), so this is a revenue source that must be handled with extreme caution.”

Faced with younger generations’ disinterest in conventional advertising and the stagnation of models like AVOD (ad-supported video on demand), brands are taking on a more active role in storytelling.

“I see brands becoming producers—not necessarily to win an Oscar, but to connect with audiences through vertical dramas or content where the brand’s identity is conveyed differently,” said Suárez. “We are already seeing media agencies like IPG Mediabrands and Publicis investing in pure audiovisual production, integrating entertainment, tourism, and sports in ways that the ICAA does not classify as covert advertising, but as genuine audiovisual works.”

From a financial perspective, Andrés Sánchez confirmed that the sector is moving away from the obvious in search of a more subtle and sophisticated “layer of advertising.”

“Traditional product placement now feels almost ‘tacky’ because viewers are put off and spot it instantly,” Sánchez said. “We’re seeing projects where the brand finances the story almost invisibly. Recently, we worked on a project funded by a pharmaceutical company where the medication was a tertiary element within a very human story; the brand didn’t even appear in the credits.”

Sánchez warned that advertisers are running out of traditional spaces, pushing the industry toward more creative strategies. “It’s about doing advertising in an elegant and subtle way. As Helena says, we must avoid covert advertising—not just for aesthetic reasons, but because the CNMC (National Commission on Markets and Competition) strictly penalizes such practices.”

Watch the full webinar here