How Brexit Could Turn Hollywood British
WHY YOU SHOULD CARE
Because a union’s loss could be a country’s gain.
Paul Duddridge was sitting at home in Los Angeles surrounded by laptops. One streamed ITV, another Channel 4, and the third was tuned to BBC. But each station was talking about the same thing: whether the British-American film director’s friends across the pond would stay in the European Union. When the news broke that Leave had won, Duddridge’s phone blew up. “Everyone who was British was sending me suicide notes,” he says.
Which was funny, because he was also getting calls, texts and emails from his non-British friends about how they could invest in the potentially lucrative, and suddenly wide open, U.K. film industry, which earned £6 billion in 2014, according to a study commissioned by the British Film Institute. It also grew by more than 5.9 percent from July to September of last year, making it the fastest-growing segment of the U.K. economy last summer. The EU mandates were “almost like having an unnecessary fifth wheel,” Duddridge says, and thanks to Brexit, that extra wheel has finally been yanked.
This is the time for people to use their soapboxes.
Sure, Duddridge’s view defies consensus. The chairman of the Independent Film & Television Alliance, for example, called Brexit “a major blow” to the industry, and those involved in EU coproductions have complained of being compromised. “It has blown us out of the water,” Rebecca O’Brien, of Sixteen Films, told reporters. When industry expert Stephen Follows conducted a survey of 156 professionals after the vote, only 3 percent said they favored the decision to Leave, which makes sense, given that the international film crowd overwhelmingly leans left and is generally risk-averse, according to Follows’ research. Yet “those working on the biggest budgets were the most pleased,” he says, with almost a fifth of respondents working on budgets of £30 million ($39.6 million) or more being in favor of leaving the bloc.
There will certainly be separation pains, especially with the demise of international funding schemes, cross-border tax incentives and hassle-free work visas. But there are also opportunities: British directors can look increasingly to the piqued ears and wallets of Hollywood bigwigs, many of whom are eager to fill the funding holes left by the loss of the Creative Europe program, which had given £100 million ($132 million) to the U.K. film industry from 2007 to 2013. While the pound has recovered a little, the post-Brexit plummeting of the currency made large U.S. studios salivate over potentially lucrative returns and the fact that it just got cheaper to shoot in the British Isles. U.S. investment there already averaged £680 million ($900 million) from 2010 to 2014, according to the BFI’s annual stats, making up more than half of Britain’s international film-trade surplus. Favorable exchange rates could up the American ante — a thought to bear in mind as the Star Wars series decides whether to continue filming in the U.K., as it did with Episode VII and VIII.
With the advent of online platforms like Netflix and Hulu, indie and blockbuster film producers have a more level playing field when trying to access a large audience. That means production companies of all sizes are no longer so dependent on the member-nation distribution deals the EU is trying to monopolize. “The necessity for subsidies to protect niche markets is eroding anyway,” Duddridge argues. Critics also said that recipients of EU funding could sometimes face distribution restrictions or stipulations requiring a Euro-centric focus. “It’s got to be better to sell to 185 countries than 27 countries solely,” Duddridge adds.
Without EU oversight, the British can be more aggressive in pursuing international investment. Eager legislators across the globe could adopt the tactics of American states like Louisiana or New Mexico, which offer heavy tax incentives to bring movie studios into their backyards. The British Film Tax Relief is “very generous” to producers, says Follows, but as an EU member nation, the U.K. couldn’t change incentives or subsidies without EU approval. Initially, the tax plan gave additional funds for films that committed to being British in casting, crew and language. But EU rules have since “forced the U.K. to widen the criteria to favor all Europeans equally,” Fellows says. “It is now possible to have a film that qualifies as fully ‘British’ with an Italian crew, based on a Spanish story, told in German.” Absent a dictate to play by outside rules, Brexit’s crown jewel could be the additional flexibility to tailor benefits solely to the needs of the U.K. film industry.
Of course, it’s not all good news. Brits have given up their say in discussions about the future of European film, and fewer U.K. films will be distributed in Europe as a result of Brexit. But it also presents a blank slate for British artists, like Duddridge, who are willing to pounce on the brave new world of post-Brexit England.
The bullish producer has put his money where his mouth is, announcing a $100 million fund for British films, for which he says he’s already raised $30 million. It was originally set to be based in Los Angeles, but two days after the Brexit vote, Duddridge made plans for a headquarters in London instead. “This is the time for people to use their soapboxes,” he says. “To say we insist on these deals, these rules, to make the film industry attractive.”