June 24, 2016

3 Ways Brexit Could Devastate the Movies

The UK's secession from the EU will have far-reaching consequences, some of which will inevitably impact the movies.

Just a month ago, British filmmaker Ken Loach's Cannes premiere (and Palme d'Or winner) served as a sobering augury. I, Daniel Blake depicts a United Kingdom beset by poverty, unemployment, and defunct social services. Its disenfranchised working class—though skilled, capable, and experienced—is unable to maintain the basic rights to life, let alone secure a living wage. The titular character pursues every option available to him, only to find himself caught in the snares of long lines and red tape that appear all but designed to cast him out to the streets.

At the film's press conference in Cannes, Loach lamented the country's impending referendum and expressed hope for a brighter future. "We need a European-wide movement that will rescue people like Daniel [Blake] and Katie from the situation they’re in," Loach said.

Today, that sentiment is a pipe dream. 

1. Fewer European co-productions

Co-productions are the lifeblood of European cinema. In 1994, Treaty No. 147, or the European Convention on Cinematographic Co-Productionwas ratified in order to "safeguard creation and freedom of expression and defend the cultural diversity of the various European countries." It was not only the portal to creative synergy in a continent rich with varied cultures, but it also created the framework for film financing across international borders.

Co-productions significantly reduce risk; where one production company might be unwilling to assume debt on a single film, three companies can share the risk and bring different financial resources to the project, such as country-specific tax incentives and investors. In an industry built upon the assumption of risk, a co-production can mean the difference between development purgatory and getting a film made. 

Furthermore, co-productions can receive aid of up to 60% of the production budget.

Rebecca O'Brien, a producer on I, Daniel Blake, said that the success of co-productions is exactly the international cooperation for which Europe at large should strive. "The Euro film community working together in co-productions is a really good example of how Europe can work," O'Brien said. "This cultural example is what we should be following." 

2. Decline in British cinema—both in quality and quantity

Creative Europe Media, the EU-supported film and TV financing program responsible for 26 films that played at Cannes this year, contributes a significant amount of money to British filmmakers. Between 2007 and 2015, it contributed €130 million to the film industry, contributing to production budgets, distributors, and festivals alike. Without this financial support, British movies will inevitably see a decline in production. 

'Game of Thrones'Credit: HBO

As it stands, only a small fraction of British films are profitable; just 7% of UK films made from 2003 to 2010 saw returns for investors. The loss of public money from CEM will likely result in production companies and investors prioritizing box office yield over creative risk-taking. 

After Brexit, the UK will be forced to re-negotiate quotas and taxes for exports to the EU. In 2015, the UK exported 41% of its movies to the EU, surpassing its American exports. Imminent financial pressures will likely diminish UK film exports, thereby disincentivizing production.

The Creative Industries Federation, which represents British creative industries, voted 96% in favor of Remain for these very reasons. British film industry stalwarts Patrick Stewart, Benedict Cumberbatch, Chiwetel Ejiofor, Keira Knightley, Jude Law, and director Steve McQueen penned a letter stating that their country's "global creative success would be severely weakened by walking away."

According to CEM, 100,000 was invested in the development and the distribution stages of I, Daniel Blake.

3. UK may no longer be a top international filming destination

A recent study by FilmLA found that the UK's total production budget spending exceeded that of California by 150%. And according to the British Film Institute, the UK was the second largest film market in the world in 2014. But with a likely economic downturn in the country, these numbers could fall dramatically—and that's not just bad news for the UK.

Last year, 37 Hollywood films, including Star Wars: The Force Awakens, Jupiter Ascending, and Avengers: Age Of Ultron, were shot in the UK. These films accounted for the majority of UK production spend and saved American productions millions of dollars due to attractive tax incentivesMuch of Game of Thrones, including last week's epic "Battle of the Bastards," is filmed in Northern Ireland due to the support of the European Regional Development Fund. A cocktail of less valuable tax incentives and a recession in the UK resulting in fewer production facilities could limit the feasibility (and desirability) of American productions set on UK soil.

Michael Ryan, the chairman of the Independent Film and Television Alliancetold Variety that "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," Ryan continued, "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.... This is likely to be devastating for us."      

Top photo: nito / Shutterstock, manipulated with festival laurels by Emily Buder

Your Comment

32 Comments

Very interesting to watch to see what happens.

June 24, 2016 at 4:04PM

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Films were made in the UK prior to their entrance into EU, and they will be made long after the exit. I suspect they will reflect more of an implicitly British identity and less of a continental/global one. Decentralization of political power is a net positive for those who prefer sovereignty over being governed by a federation with no blood and soil connection to their nation.

June 24, 2016 at 4:39PM, Edited June 24, 4:39PM

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Marc B
Shooter & Editor
556

Couldn't agree more.

June 24, 2016 at 4:49PM

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Mike Murphy
Film Type
5

We joined in '73, in a very different world and a very different time. Since then the British film industry has weathered a complete collapse (1980s), false dawn (late 90s) and settled down to become an industry massively reliant on EU funds and collaborations to support homegrown films, while bringing in outside projects to use our crews. Nobody knows what will happen next, but everyone with any understanding of our industry isn't optimistic that British films - particularly ones with primarily local character/appeal - will benefit.

As for the sovereignty/federalism discussion - That's your opinion and I'll leave it with you, as the jingoistic language of 'blood', 'sovereignty' and 'nation' always leaves a bad taste in my mouth.

June 24, 2016 at 5:07PM

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Alex Richardson
Director
2849

Obviously if you think that 1973 was really a very different time you are must be too young to know. Britain had a film and TV industry based on films people wanted to see before '73. Maybe England can make good movies again that are entertaining instead of "Artistic" Garbage that needs to be subsidised. This is a chance for England to regain some independence, self respect and freedom from autocratic socialism and a dependence of the taxpayer.
Artist, for reason best known to themselves, are, for the most part unable to support themselves. This is stupidity . There is absolutely no reason why there can't be a free enterprise film industry was it should be.

June 24, 2016 at 8:52PM, Edited June 24, 8:52PM

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>always leaves a bad taste in my mouth.

Wash your mouth with soap then. Hygiene is great.

June 26, 2016 at 8:48AM

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Terma Louis
Photographer / Cinematographer / Editor
899

Doomsday talk is about politics/money. Remember when Congress first voted against the bailout? After Corporate America/Wall Street (fear mongers) got through talking, Congress voted in favor of the bailout. American businesses investing (betting their money on) in the UK to cut costs and profit -- "no blood and soil connection" -- perfect description. An article by Chris Hedges explains the Brexit as 2008 all over again. http://www.truthdig.com/report/item/2008_all_over_again_20160624

June 26, 2016 at 3:56AM

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Money is the tail that wags the dog. If the British economy sees a drop in the value of the Pound then it will be cheaper for outside productions to shoot there and more work will come their way, not the other way around. Basic economics will always eventually win the day.

June 24, 2016 at 4:50PM, Edited June 24, 4:50PM

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Thank you for sharing this insight into how leaving the EU will effect the uk film industry. I feel compelled to write and make it clear to people outside the country how deeply humiliated I and all of my friends and colleagues feel today at the result of this vote. Please understand that half of the UK tonight is deeply wounded at having their beliefs in open sharing and cultural and creative collaboration so deeply dishonoured and ignored in this way.

Film at its best can be a medium that transcends the notion of culture and even country. I hope, In the same way that we can eventually remember, as we sometimes do in the flickering light of the cinema, that we are all at our best when we stand borderless in the country of the human.

June 24, 2016 at 5:08PM, Edited June 24, 5:12PM

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Paul fenn
Film maker
149

What he said.

June 24, 2016 at 5:10PM

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Alex Richardson
Director
2849

So, do you object to democracy in general where people vote, or, just this democratic election where the "leave side" did not prevail? If the result had been the opposite, would not half of British voters felt the same way?

June 24, 2016 at 5:20PM

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I actually wanted to reply to 'Romana' but the board isn't letting me do that. Based on the fact your name is a not too subtle play on 'roman à clef' and you've only just signed up, I'm guessing you're operating under a pseudonym and looking to start an argument. Firstly, the 'leave side' did prevail. Secondly, this election has drawn heavily on misinformation, lies, and right-wing media manipulation from day one. Nobody should be proud of this and I think Paul has expressed that well. That's as much argument as you'll get from me, 'Romana'. Sleep well.

June 24, 2016 at 5:36PM

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Alex Richardson
Director
2849

The Leave campaign leaflet that came through my door was basically entirely stuff that wasn't true, for which there seems to be no penalty. Then again Remain didn't exactly convey much of use either (assuming the noise outside is another rain-storm, rather than WW3).
"Appalled" sums up where I am. Although I hope to do well in the next London mayoral election, as my platform will include a one-off payment of £10,000 to all voters if I win.

June 25, 2016 at 7:24AM

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That's called direct democracy. Get used to it.

June 26, 2016 at 8:51AM

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Terma Louis
Photographer / Cinematographer / Editor
899

Keep calm and carry on. England is known for overcoming the odds.

Much of this doomsday talk is fueled by uncertainty. Just because you're lost at sea doesn't mean you're sinking. Certain named institutions and organizations might have to adapt in order to survive but that's always the nature of change.

June 24, 2016 at 5:12PM

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I suspect the concern is that the EU will want to give us a bad deal as while the trade with the UK is "nice to have" the EU not self-destructing by lots of others leaving is "critical". Showing that if you leave you will be a lot worse off is the way to avoid an EU collapse. I hope it will be okay, but get no further say... (London becoming an independent city state in the EU would make a nice movie, hmmm, but won't be happening.)

June 25, 2016 at 7:29AM

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> Creative Europe Media, the EU-supported film and TV financing program responsible for 26 films that played at Cannes this year, contributes a significant amount of money to British filmmakers. Between 2007 and 2015, it contributed €130 million to the film industry, contributing to production budgets, distributors, and festivals alike.

So EU gave ...€130 million distributed over 8 years?

That amounts to the budget of a single middle-budget Hollywood production (e.g. no Avengers or Avatar territory).

If that's the biggest "loss" for British cinema for Britain leaving the EU, they'll do find.

The British can give the same amount to their film-makers (which in the end amounts to pocket money compared to UK's GDP) as part of a National program for the arts if they care to...

June 24, 2016 at 5:14PM, Edited June 24, 5:14PM

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What utter nonsense. The U.K. will thrive once it is finally out from under the thumb of the EU just as it did for hundreds of years BEFORE the EU came along. Only liberals can view a nation's sovereignty with such disdain. I say "Well Done Britain!", you have led the way back to freedom and many others will soon follow!

June 24, 2016 at 6:17PM, Edited June 24, 6:17PM

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Andy Drefs
Production company owner
16

Some observations from a Yank.

1. The attitudes presented to the public here in the states was decidedly one-sided. Journalists, politicians, corporations all sang the same song. I found their remarks hypocritical and selfish. Selfish for the simple reason that Brexit was presented as a threat to our finances. Hypocritical because no one in their right mind (on this side of the pond) would ever imagine allowing other countries to, at least some of the time, dictate how we do things? We can't stand it when someone across a state line, or the Mason-Dixon line, or a chalk line attempts to decide things for us. So you Brits must do what we would never do.

2. As mentioned, regardless who won there was going to be millions of Brits upset about the outcome. What those of us who live elsewhere need to keep in mind is this: half the population of GB wouldn't have felt the way they did if the GB-EU relationship was all rosy. Maybe the differences could have been worked out in time, maybe the differences can still be worked out, but I don't think you can fool half the population. There were many legitimate problems between the two and evidently those who voted to leave weren't convinced those problems were going away any time soon.

3. Hyperbole. There is an abundance of the stuff floating around these days. "Devastate" probably fits the definition in this case. I personally think GB is more than capable to manage its foreseeable future. But it helps no one to express the pain of defeat by trying to bludgeon someone with doomsday talk.

June 24, 2016 at 6:39PM

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The British industry isn't anywhere near the US one anyway. Why do you think all the Brits are working over there.

June 24, 2016 at 8:24PM, Edited June 24, 8:24PM

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Daniel Wiles
Writer
104

Please stop predicting the end of the world just because of Britain leaving that horrible bureaucratic oligarchy we call EU. It is not democratic, it will never be. We have to stop this beast alltogether and start new. Maybe we can be the United States of Europe in the future - but if we keep going with the EU as it is, that future United States of Europe will be a horrible place with no personal freedom and back-room corporate rule!

A lot of journalists keep painting the picture as if without the EU, all the countries would stop cooperating on every level and go to war with each other. By that logic, the US, Canada and Australia (and many other countries) would be doomed because they are not part of the EU...

By the way, I am German and I congratulate the Brits for leaving! I wish other countries will follow and we can break apart that abomination of a shadow government!

June 24, 2016 at 11:05PM, Edited June 24, 11:08PM

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The leave voters are either rich right wingers, or the massively disenfranchised working classes. The latter have been forgotten about by men in suits, regardless of whether they reside in the EU or in our disgusting government. Their wages stagnated long ago and they can barely afford to live. They've believed lies in the right wing press about immigration and where their tax money is going. Neoliberalism is to blame, not outsiders. The US is the most unequal country in the developed world, the UK is second. They're both absolutely fucked because of free market capitalism, but it's much easier to blame an immigrant. What has happened is a statement of dismay, not a politically motivated choice. It's a protest vote, people are driving the car off a cliff like the end of Thelma and Louise.

Thanks for your concerns, but we are just about to descend into more poverty because people have made a bad choice governed by fear. The next stop for the US is Trump. I am fairly confident of that. Then the US will continue to become more and more unequal, just as our stupid little island is. We live in very frightening times and people need to realise that the system is broken.

June 25, 2016 at 8:30AM, Edited June 25, 8:30AM

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Liam Martin
Writer, director, editor.
589

Any continent ruled by un-elected, unaccountable bureaucrats is doomed to failure. Britain made the right call. They will suffer some short term pain, but the long term benefits will outweigh the short term hardships.

More importantly, this will compel other EU nations to follow suit. Watch for Spain, Portugal, Italy and Greece to be next in line for an exit. After that, all bets are off and the EU's days are numbered.

June 25, 2016 at 9:04AM

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jfc
Director/Writer
98

Well there's nothing like looking at the dark side, now is there? It's so easy to predict doom and gloom, whereas even a glimpse of understanding of the 'soft power' of Britain as probably the most creative, inventive and resilient nation on earth and one that punches way above its weight in just about every arena, should lead any open-minded soul to look at the situation with some optimism. We made movies before we joined the EU. We'll carry on making movies. All this black doom is nonsense and doesn't get anybody a further millimetre forward.

June 25, 2016 at 3:03PM

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Steve Grant
Director
30

The article begins with: " ~ beset by poverty, unemployment, and defunct social services. Its disenfranchised working class—though skilled, capable, and experienced—is unable to maintain the basic rights to life, let alone secure a living wage. The titular character pursues every option available to him, only to find himself caught in the snares of long lines and red tape that appear all but designed to cast him out to the streets."
That may be a picture of the future for the UK, or may be not. However it IS an accurate picture of Greece, Spain, Portugal...

June 25, 2016 at 3:09PM

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Steve Grant
Director
30

A bit tired of being always put into the same bag, like it was a mantra "Spain, Grece and Portugal".
Although being hardly hit by the recession and with a serious unemployement problem, Spain is very different ftom Greece and Portugal. For instance there are really big Spanish companies operating globaly like Inditex (Zara), Santander bank, Sacyr (just finished the new Panama canal) Ave (making the high speed train for various countries) and Telefonica, to name a few, whereas these kinds of companies are practically non existent in Greece and Portugal.
To give you an idea, the combined value of the most important companies in Spain is 511$ billion, the Greek ones have a value of 25$ billion.
that's just one of the differences.
I'd wish every person saying "Spain, Greece and Portugal" would be better informed.

June 26, 2016 at 7:09PM, Edited June 26, 7:09PM

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While those number may sound impressive, they are basically meaningless. The more important numbers are their leverage ratio, their debt to equity ratio and their liquidity. In order to have a sense of a company's health, you need all that. Remember Lehman Brothers? In July of 2008, they had $640 billion in assets. By December 2008 they had filed for bankruptcy and creditors received .18 cents on the dollar.

By the way, Santander Bank just failed the stress test (news came out a few hours ago), which means they do not have sufficient capital to cover operations in the event of a crisis. And their stock price is down over 60% in the last 15 months. Once again, not a good sign.

The danger with very big global businesses is that when they go down, they go down fast and take a lot of others with them because of the interconnection of the globalized economy. One of the tools a sovereign nation has to combat this kind of economic shock is the ability to pump liquidity into the system (print money) or slow down inflation by raising interest rates. But, as an EU vassal, you do not have that power. Only the ECB has that power and if you seek their help, you become Greece. Austerity hell. Do you want that?

The EU will not last because they have become an elitist technocratic nightmare. What the Brexit did was put the world on notice. That was just the first domino to fall, more will follow. Bet the farm on it. And yes: Spain will be among the first five to leave the EU. Wait and see.

June 29, 2016 at 9:55PM, Edited June 29, 9:59PM

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jfc
Director/Writer
98

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June 26, 2016 at 3:56AM, Edited June 26, 4:07AM

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3 ways Retarded Globalist Drones Ruin the Movies Today

June 26, 2016 at 8:43AM, Edited June 26, 8:43AM

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Terma Louis
Photographer / Cinematographer / Editor
899

illustrate us, please

June 27, 2016 at 7:41PM

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what a load of rubbish!! unbelievable! 1) why would these guys suddenly stop working together? We've left a political union not put up some huge wall.
2) that money is our own money? We paid more into the EU than we got out - any money we did get back was already our own? I.e. we can continue spending that money as we wish. Which could be on films.
3) Wheres this coming from, the treasury? UK film success has nothing to do with the economy or the EU! It has purely to do with the tax breaks.
Seriously? Who writes this stuff?

July 1, 2016 at 2:25PM

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icloud sifremi unuttum very intresting post...

September 1, 2016 at 9:20AM

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September 1, 2016 at 9:21AM

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