Members of Mercury CX – a training organisation for emerging filmmakers and screen talent which hosts 15 industry development programs a year and operates the 186-seat Mercury Cinema in Adelaide’s West End – were told at a second extraordinary general meeting last night that the organisation will have to cease operating in January unless it can secure $700,000 in ongoing operational funding.

The not-for-profit, which estimates that it has cumulatively lost $695,000 in annual funding since 2015 due to government program cuts and COVID-19 sponsor losses, had a submission for $700,000 to $1.2 million in yearly funding knocked back by the Malinauskas Government in May.

The current board of Mercury CX, chaired by Dancing Road Productions producer Gena Ashwell, recommended to the more than 100 members in attendance last night that they vote to wind up the organisation.

A special resolution on the matter will be tabled in late December or early January.

“The board has instructed the CEO [Karena Slaninka] not to enter any third-party program funding agreements for 2023 without the operational funding to be able to deliver and service those programs,” Ashwell told last night’s meeting.

“The current board therefore recommends winding up the organisation, with a special resolution for membership to vote on at a special meeting which will take place either late December or some time in January.”

Ashwell said if members voted against winding up Mercury CX, a new board would have to be appointed.

“The current board will declare that the organisation is currently solvent, but the new board will have to acknowledge and agree they’re fully informed of the position and the penalties that are associated with that outlined under the Associations Incorporation Act,” Ashwell said.

“We will keep fighting right up until the end and hope for a Christmas miracle.

“But we also have to be responsible and realistic and plan for the worst, hope for the best.”

The Mercury Cinema. Photos: Thomas Kelsall/InDaily

Ashwell said an alternative group of members approached Mercury CX on October 31 with a proposal to take over from the current board and explore other operational models to keep the organisation afloat.

The group includes Emmy Award-winning producer Kirsty Stark, former SA Film Corporation chair Peter Hanlon, film director Madeleine Parry, Highview Productions producer Lisa Scott and University of South Australia associate professor and filmmaker Kath Dooley.

Stark was allowed to address the meeting, telling members the new group “don’t have all the answers yet” but are “willing to give it a red hot go”.

“We’ve been looking at all options because in our opinion to lose an organisation like this would just be incredibly heartbreaking given its history and given its support to the emerging film community and independent screening sector over the years,” she told members.

She said the alternative board had been given access to Mercury CX’s finances and received advice from a restructuring expert.

“The proposal we would offer in conjunction with [appointing a new board] is exploring options for different models to approach the organisational structure, looking at all the possibilities that would be in place,” Stark said.

“That is done in the context of consultation with the wider industry and multiple stakeholders, all of whom also have a love for the organisation and don’t want to see the doors close.

“Some of those models would take into account the possibility of partnerships or other collaborations with the wider industry here in South Australia.”

Asked if the new group had any specific plans to make Mercury CX sustainable, Stark said: “We’re still exploring options at this stage.”

“Over the last couple of weeks we’ve had really strong conversations with a whole variety of industry in South Australia,” she said.

“I think there will need to be change, and we’ve revolved a lot of conversation around what that change might look like and what are the core features and functionalities of the organisation that everyone is heavily wanting to sustain.

“We believe with the passion and support that’s out there, and with the flagged potential contracts that could come in the door next year, there is a way forward.

“Whether that’s a smaller, more sustainable way in an interim period looking to rebuild over time, we don’t know yet, but that’s where we’re currently standing.”

Ashwell said Mercury CX would still have to progress with the special resolution asking to wind down the organisation just in case the new board changed its mind.

She said the newly-appointed board would “probably have 30 days” to find a solution to Mercury CX’s problems.

“If the new board wants to take this on, we will make sure that the transition is really clean and clear,” Ashwell said.

“We are absolutely not stopping then if they want to come in and find another solution that we can’t.”

Mercury CX, established in 1974 as the Media Resource Centre, operates the 186-seat Mercury Cinema and 36-seat Iris Cinema on Morphett Street, adjacent to the Lion Arts Factory in Adelaide’s West End.

Opened by Queen Elizabeth in 1992, the cinema hosts a select range of local and international films year-round and has a prominent role in Adelaide’s festival season, particularly during the Adelaide Film Festival.

It also hosts the annual SA Screenmakers Conference and SA Screen Awards. 

A petition to save the Mercury Cinema has attracted nearly 1300 signatures.

The decision from the Malinauskas Government to knock back Mercury CX’s $700,000 request was based on a confidential report on Mercury CX’s operations commissioned by the former Marshall Government last year.

The former government gave Mercury CX $300,000 in emergency funding last September to support its ongoing operations while the independent review took place.

The report, which has not been publicly released, found the organisation’s current business model was “unsustainable”, although Mercury CX says the report also concluded the organisation remains an “important part of the eco-system of South Australia’s screen industry”.