What will Brexit mean for the British Film and TV industry?

The King's Speech (Dir. Tom Hooper) was just one of the many British films supported by the EU Media Programme. It took over $400m worldwide and won 4 Oscars.The King's Speech (Dir. Tom Hooper) was just one of the many British films supported by the EU Media Programme. It took over $400m worldwide and won 4 Oscars.

movieScope: June 2016

What will Brexit mean for the British Film and TV industry?

By Nikki Baughan

In a seismic – and, in many corners, shocking – referendum decision, the UK electorate has voted to leave the EU. While no-one has a crystal ball, it’s clear that this outcome will have implications for all UK industries; not least our thriving film and TV sector.

Prior to the referendum, 20 leading British producers made their feelings clear on the matter, with a joint letter signed by the likes of Barbara Broccoli, Tim Bevan, Mark Herbert, Nira Park and Lord David Puttnam stating: ‘The UK is part of the EU’s MEDIA/Creative Europe Programme which provides significant funding to our film, television and games industries each year. Between 2007 and 2015 our industry benefited from almost €130 million provided by this programme’.

After the vote had been announced, Michael Ryan, Chairman of the Independent Film & TV Alliance and partner in GFM Films was quoted as saying: “The decision to exit the European Union is a major blow to the UK film and TV industry. Producing films and television programs is a very expensive and very risky business and certainty about the rules affecting the business is a must. This decision has just blown up our foundation; as of today, we no longer know how our relationships with co-producers, financiers and distributors will work, whether new taxes will be dropped on our activities in the rest of Europe or how production financing is going to be raised without any input from European funding agencies. The UK creative sector has been a strong and vibrant contributor to the economy; this is likely to be devastating for us.”

The industry’s central organisations, the British Film Commission, and the BFI, have, in contrast, been rather more reflective and reassuring.

On Saturday, June 25, BFC Chair Adrian Wootton said: “In terms of the UK’s creative sector tax reliefs, it’s very much business as usual. While there will inevitably be some uncertainty following the results of the referendum, I would like to assure all our close industry partners and clients successfully making film and TV programmes in the UK that we will be working closely with our peers, colleagues, and political stakeholders to ensure the UK’s screen industries continue to be the most competitive, highly-skilled and accessible in the world.”

BFI CEO Amanda Nevill has been equally as optimistic, saying: ‘We completely understand and feel the concerns that the industry has right now. I think we can draw strength and confidence from knowing that we are one of the most creative nations on earth, and we will undoubtedly continue to enjoy successful and vibrant partnerships throughout the world.”

It’s worth noting, however, that neither the BFC or BFI have spoken about exactly what impact Brexit could bring, largely because it is still impossible to know. By looking at how much UK filmmaking is linked with the EU, however, we can start to get a good idea.

 

Film Funding

During the period from 2007 to 2013, the EU provided over $100 million across all sectors of the UK film industry, including distribution, TV broadcasting, development, sales, and training. The value of this contribution, both financially and culturally, cannot be underestimated, as evidenced by the roster of EU supported films recently highlighted by Telegraph critic Robbie Collin on Twitter.

Robbie Collin

 

While the UK film industry as a whole drew in almost £1.5bn of investment in 2015, the vast majority of this was from incoming US blockbusters. If the decision to Brexit has no impact on our tax credits, there is little reason for US investment to change; particularly as the falling value of the pound benefits overseas productions spending money here. This could be seen as a fiscal positive, although the effect on our domestic industry could outweigh such benefits.

By contrast, independent British films are usually made with a number of investors acting in partnership to support a production through development to distribution. The EU has been a key supporter, and often a cornerstone investor, funding films directly through its MEDIA Program/Creative Europe and investing in Creative England and Screen Yorkshire which in turn invest in productions, skills training, infrastructure and economic development.

Should EU funding be reduced or withdrawn entirely, indigenous independent productions with a budget between £2m and £30m, as well as those that rely on European co-productions, will be dealt a devastating blow.

Speaking to Screen International, Rebecca O’Brien of Sixteen Films, producer of Ken Loach’s films including 2016 Palme d’Or winner I, Daniel Blake, was clear on Brexit’s cultural impact. “It has blown us out of the water,” she said. “All of our films for the last 20 or 25 years have been co-productions with Europe. [Brexit] doesn’t mean they will stop immediately but it means that trade, and access and all those things are much more difficult. It just means we have to reinvent the wheel.”

While Brexit has dramatically highlighted the economic and ideological gulf between London and the regions, this schism also exists in filmmaking and, with Brexit, is likely to get worse. London’s creative industry may be economically and culturally strong enough to weather the storm, with enough overseas investment to calm the waters somewhat, but regional filmmakers are not in such a strong position.

Of course, the UK may well be able to participate in the MEDIA programme without being an EU member state but, like Norway would have to pay to do so. It would also be able to re-negotiate individual co-production deals with individual countries, such as the separate one we currently have with France.

Indeed, there are also those who believe that Brexit will have little impact on UK filmmaking, including former British Screen and Irish Film Board boss Simon Perry. “It’s a shocking result,” he admitted to Screen, “but it is so long that the British film industry seemed to care about taking advantage of being in Europe that I don’t think it is going to have much effect at all. We haven’t been in Eurimages [the Council of Europe’s co-production fund] since 1995. British producers are not big users of the MEDIA programme.”

Northern Ireland, which is home to major productions such as Game of Thrones, Line of Duty and The Fall released a statement on Friday, 24th June, saying: “Northern Ireland Screen’s production funding comes from the Northern Ireland Executive through Invest NI and does not use monies provided from European funded programmes.We look forward to business as usual”.

 

Distribution and Exhibition

It’s not just production funding that is likely to be impacted by Brexit. EU funding has supported both the export of UK film to Europe and the import of European film to the UK. In figures published by analyst Stephen Follows, between 2007 – 2013 almost £45m was spent bringing UK films to European audiences, and during the same period UK-based businesses received over €20m in EU funding to support the release of European films in the UK.  The loss of this support, plus a severely weakened pound, means that it will become more expensive for UK distributors to acquire new international content, although it is worth remembering that all will be in the same boat.

Read Stephen Follows full analysis here: https://stephenfollows.com/how-will-brexit-affect-the-uk-film-industry/
Additionally, the 56 UK independent cinemas who receive funding from the EU’s Europa Cinema scheme (which supports exhibitors who commit an average of 67 per cent of programming to European films) will also be impacted, losing funds that are central to their survival.

Claude-Eric Poiroux, General Director of Europa Cinemas, is sure that the ramifications will be felt far and wide. “The day Britain leaves the MEDIA programme, its films will no longer be recognised as European,” he told Screen. “Or us, it will be catastrophic if Ken Loach or Andrea Arnold are no longer ‘Europeans’. That will be a catastrophe for everyone – for all the distributors, spectators and cinephiles.”

 

Film Crew and Talent

The likelihood of fewer UK productions means the likelihood of fewer jobs in the sector and could also mean a stagnation or decline of pay rates. Workers could also be impacted by any legislative changes to things currently overseen by the EU, including working hours and holiday pay; trade union BECTU urged its member to vote Remain for this very reason. Should the current freedom of movement be restricted, freelancers may also find that their ability to work on European projects is also diminished. In addition, rental companies may face tariffs and taxes when hiring equipment to productions in the EU.

Not only have the European Regional Development Fund supported UK film and TV projects, companies and facilities – which could now all face job losses – they have also invested money in skills training. This has become particularly valuable ever since Creative Skillset, the UK-government backed skills training organisation, was considerably reduced in size earlier this year, and had its national outlook refocused to London. The UK’s world-class skills base is a major contributing factor to inward investment, and without suitable funding for training could find itself struggling to keep up.

 

Future Growth

While the government has invested considerable time and money in the UK’s film and TV sector, encouraging and enabling it to develop and become a major contributor to the country’s economy, a decision to leave the EU may stymie such growth; certainly in the short-term.

With a new Conservative leader on the cards, an opposition in disarray, an emerging far right agenda, a possible General Election and the likelihood of recession, it’s unclear where the sustained health of the UK film and TV industry will rank on the list of any government’s priorities. And if EU monetary support likely to dry up, there is – despite the Leave campaign’s (diminishing) promises of huge amounts of extra cash – no-one immediately obvious left to fill the funding gap, aside from US studios. Stripped of such substantial investment for independent production, coupled with an increasingly attractive exchange rate for overseas producers, the British film industry could become little more than a service industry for international production.

It’s also important to note that by leaving the EU we would forfeit our right to influence EU policy towards film and television content, at a time when discussions around the proposed Single Digital Market are shaping the future of European distribution. The UK would, however, be free to change and augment its tax incentives at any time without European guidance.

Of course, as William Goldman famously said, in the film industry nobody knows anything, and it will be some time before uncertainty and fear makes way for action and the true consequences are felt. What is clear, however, is that the majority of the industry is in shock, and struggling to see a positive way forward.

“I don’t think I’ve ever wanted magic more,” tweeted Harry Potter creator JK Rowling, who is perhaps single-handedly responsible for kick-starting the inward investment boom thanks to Warner Bros’ relationship with her best-seller. “This is what happens when you try and fix a faulty watch with a hammer.”

 

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