June 25, 2016 oggitomic

How Brexit Could Devastate the Film Industry

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 Blakedepicts 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.

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-Production, was 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. 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. 18 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 incentives. Much 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 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."