The United Kingdom has voted to leave the European Union, in a move that producers fear could have far reaching consequences for the country’s creative industries.
On a day that has already seen Prime Minister David Cameron resign and the stock market and the value of the pound plummet, the decision to exit the EU was described as major blow to the UK film and TV industry by Michael Ryan, Chairman of the Independent Film & Television Alliance and partner of GFM Films.
“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 value of media sector shares fell sharply in morning trading, with ITV down 19%, Sky by 8.5% and STV by 8.2%. Advertising giant WPP saw its share price drop 5.8%, while Pinewood Studios shares are down just over 3%.
The CEO of superindie group Argonon James Burstall, whose company had publically stressed the advantages of staying in the EU, stressed the resilance of the UK production sector: “We are all still processing the news. We need to listen to the plan of the Leave team and see if they can deliver on their promises. We are a resilient industry and a resilient nation and we will find a positive outcome.”
Televisual had argued that remaining in the EU would be positive for the UK creative industries, with the production sector here in particular enhanced by the free movement of talent, capital and cultural exchange within the EU.
The EU is the largest export market for the UK’s creative industries, totalling 56% of all overseas trade in the sector, according to the Creative Industries Federation. Pact figures, meanwhile, show that Europe accounts for 31% of UK television exports.
However, the fall in the value of the pound against the dollar could prove attractive to US productions looking to shoot here. The exchange rate could also favour the many UK production companies which have expanded into the US market and earn signficant revenues in dollars.
The result was described as bitterly disappointing for the creative industry by Jane Hyndman, Group General Counsel at Compact Media Group, the indie media advisory group.
Hyndman said: “Leaving the EU means we are set to lose out on EU Media Funds, with ERDF funding, providing support for a number of productions, leading to significant inward investment for the UK regions – for example a particular success being Game of Thrones in Northern Ireland. Loss of access to these funds means that either the UK becomes less attractive, or requires new funding mechanisms to plug the gap.”