Implications of Brexit on the Film Industry


Industry Reaction

With the inter-relationships with Europe so entwined and the reliance of independent filmmakers upon soft money and subsidies it was no surprise when the film industry reacted so negatively regarding the referendum result. A survey by film blogger Stephen Follows of 156 film professionals showed a vast majority were against the UK leaving the EU. 68% said they were strongly against Brexit and 14% mildly against. Of the remaining 18% only 5% were in favour. Similar results were found in other surveys – 85% of PACT’s members and 96% of the Creative Industries Federation’s members indicated they voted in favour of remaining. StudioCanal UK CEO Danny Perkins said "Brexit will just make everything more difficult" and so it is vital that British films retain their identity as "European". There is a precedent for this as Switzerland, itself outside the EU, has its films qualifying as European. Similarly Amanda Nevill, the BFI's CEO suggested that the industry is now "..engulfed in a cloud of uncertainty with independent filmmakers are most at risk from the loss of EU funding". John McVay, CEO at PACT, said that the voters have spoken and "our job is not to ridicule the will of the British people but to make sure things work better for our industry and there is no long-term damage to our leading position". House of Cards creator, Michael Dobbs, was much more positive about the result. He said "I happen to believe that Brexit will be creatively inspiring. It is a global world out there and, if we are to continue with the fabulous success of the British creative industry, we have to look not just across the channel but around the world". A Screen International Article with industry reaction can be read at http://bit.ly/2a6hiYa

Positives and Negatives for the Film Industry

To date much of the discussion has been speculation based on what may happen. This article is no different as the potential upsides and downsides depend upon the type of deal the UK does with the EU. However, some outcomes are virtually automatic, in that if the UK stops paying into the EU then it can expect to stop receiving money out of the EU. Here are some of the negative effects of Brexit for the film industry:

  • An end to MEDIA/Creative Europe funding. Between 2007-2013, the MEDIA scheme provided over Eur 100m towards various aspects of the UK film industry ;

  • In the short term, British/European co-productions will be harder. This is due to the fall in value of the pound and growing uncertainty;

  • In the long term, British/European co-productions may need new legislation. Official co-productions are only possible between countries which have signed a treaty defining co-production rules. The UK has active treaties with Australia, Canada, China, India, Israel, Jamaica, Morocco, New Zealand, the Occupied Palestinian Territories, South Africa and the EU. The European treaty is called the European Convention on Cinematographic Co-Production. It is not exclusively for EU members but the UK did originally sign up as a member of the EU so it would conceivably need to sign up again as a "European non-member state".

  • British content will be much less attractive to European broadcasters. Some European countries have quotas on the amount of European content their exhibitors and broadcasters must show. This increased demand for native UK films and also made UK/US co-productions more attractive. Post Brexit it is unlikely such products will be classed as 'European'.

  • Increased complexities for international cast and crew. New visa requirements and work permits could affect both British people filming in Europe and European people filming in the UK. The basics of the free movement of people and services is also not simply an EU issue, but was instead established in the Treaty of Rome. So it is not clear what would happen post-Brexit as new agreements will need to be reached in order to keep the free movement protections the film industry has enjoyed until now.

  • Fewer UK films will be distributed in Europe. Between 2007-13, almost Eur 45m was spent to bring UK films to European cinema audiences.

  • Fewer international films will be distributed in the UK. Between 2007-13, UK businesses received over Eur 20m in EU funding to support the release of European films in the UK.

  • UK independent cinemas will lose income. 56 UK independent cinemas receive funding from the EU as part of the Europa Cinema scheme, which supports cinemas which commit an average of 67% of their programming to European films. Despite these negative effects, Brexit could be positive for the UK film industry in the following ways:

  • It becomes cheaper to shoot in the UK. If the pound continues to lose value then the UK becomes a much cheaper location for foreign productions especially those Hollywood Studio productions. Between 2001-15, UK/USA studio films spent £7.7bn in the UK.

  • The UK is free to change its tax rules. As a member of the EU, the UK is bound by rules on State Aid and does not have a free hand to change government incentives and subsidies without EU approval. Details of tax changes will be the subject of a future newsletter but in general terms the UK will have more flexibility to change incentives to better meet the needs of the film industry. Specific taxes affected are Film Tax credit Relief, EIS investment schemes and Patent Box incentives.

  • Avoid proposed new European rules on release patterns. The Single Digital Market could mean that films need to be released in Europe as one territory all at once. It will still affect British films exported to Europe but not films released in the UK.

  • The UK can spend that saved money directly on UK film. In theory, the UK can use the money saved not paying into the EU to directly replace the money and support that was lost by the lack of MEDIA funding.

#Brexit #Film

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