Shakeout in Brit pic biz opens doors for creativity, efficiency

LONDON — Do you want the good news or the bad news? The British film industry has had more than its fair share of both in 2002.

The bad first. Companies closing, withdrawing or scaling back in recent months include FilmFour, Granada, Intermedia and Signpost. IAC is in administration, and Winchester has seen its bottom line and stock price collapse.

Such corporate calamities, with their attendant pinkslips, have shaken the confidence of the British movie community after several years on the upswing.

Filmmakers are facing drastically reduced options for getting their projects made, and the industry’s pretension toward developing its own ministudios independent of Hollywood has been cruelly exposed as underfunded and overly optimistic.

All eyes are now on the three lottery franchises — DNA Films, Pathe Pictures and the Film Consortium — to see whether they will manage to carve themselves a future after their lotto coin runs out in a year’s time. None has yet proved a big success, so it will take something of a Houdini act for all three to survive.

Meanwhile, the volume of production, which boomed on the back of lottery coin and tax breaks, has dropped off a cliff. Major pics that have failed to come together include Neil Jordan’s “Borgia,” Terry Gilliam’s “Good Omens,” Damien O’Donnell’s “Edgardo Mortara” and the Mirage project “Assumption of the Virgin.” Mike Barker’s “To Kill a King” shut down in midproduction before being rescued by veteran producer Jeremy Thomas.

But that’s where the good news starts. Thomas is one of a handful of indie producers, along with the likes of Stephen Woolley, Andrew Eaton and Barnaby Thompson, whose energy and experience has ensured that London has kept its status as one of the world’s most important filmmaking hubs, despite the woes of the indie business worldwide.

Then, of course, there’s Working Title — not quite the only game in town, but sometimes close to it. The Universal-owned powerhouse, run by Tim Bevan and Eric Fellner, is heading for a $300 million year at the global box office from six releases including “About a Boy,” “The Guru” and “Ali G Indahouse.”

Meanwhile, the Film Council had an outstanding first year of releases, with hits including “Bend It Like Beckham” and “Gosford Park.” It backed “Bloody Sunday,” which shared the Golden Bear at Berlin, and “The Magdalene Sisters,” which won the Golden Lion at Venice. The U.K. also had its strongest Cannes showing for many years, with six Brit pics in the fest’s three sections, and Paul Laverty picking up the script prize for “Sweet Sixteen.”

This kind of success is one reason why foreign companies are still being drawn to Britain. Lakeshore, Myriad Pictures and Ed Pressman’s ContentFilm have all recently made key hires to beef up their London presence. Fox struck a distribution deal for half the world with the new London-based production shingle of former Polygram film prexy Michael Kuhn. Fox Searchlight is seeking a 50% stake in DNA Films.

France’s UGC has launched a U.K. distribution arm, and Luc Besson’s Europa Corp. wants to follow suit. The local distrib arms of the U.S. majors also are dabbling in U.K. production — Buena Vista with “Calendar Girls,” Sony with the S Club movie “Seeing Double” and Warner with its U.K. pre-buy of “Young Adam.”

U.K. distribs Helkon SK (in the midst of a management buyout from its insolvent German parent) and Momentum Pictures (owned by Alliance) are contemplating expansion into continental Europe.

Cinema admissions across Britain are booming to their highest level since 1971 — current estimate is that ticket sales will reach 174 million for the year, up 12%. DVD sales are on track for 90 million units in 2002, more than double last year’s 40 million figure.

This, of course, is largely driven by Hollywood blockbusters. But remember that the three megapics set to dominate the global box office at the end of 2002 — “Harry Potter and the Chamber of Secrets,” new James Bond installment “Die Another Day” and “The Lord of the Rings: The Two Towers” — all contain significant Brit elements. Indeed, the Potter and Bond franchises can be claimed as British, having been developed and shot in Blighty, with local casts and accents, albeit wholly under the financial control of Hollywood studios.

The “Lord of the Rings” trilogy — the first two parts of it, at least — is one reason why Entertainment Film Distributors will score the biggest year in memory of any U.K. indie, with a market share of 15.7% in the first nine months. The family-owned company augmented its New Line slate with astute pickups including “Gosford Park,” “Monster’s Ball” and “My Big Fat Greek Wedding.”

“Gosford Park” was also a triumph for sales company Capitol Films, which pulled together the financing for that and for Altman’s next pic, “The Company,” as well as David Cronenberg’s “Spider.”

But in general, 2002 was a year of retrenchment for London’s film sales community. With the disappearance of cornerstone financiers such as FilmFour, a heavy responsibility rests on the surviving purveyors of essentially public coin — BBC Films and the Film Council — to shore up the industry.

The BBC’s movie unit prospered in 2002, setting up pics with Bruce Willis (“Me Again,” co-financed by Intermedia) and Gwyneth Paltrow (the untitled Syliva Plath biopic) as well as winning fest acclaim for the likes of “Dirty Pretty Things,” “Tomorrow La Scala!” and “The Heart of Me.”

But head of film David Thompson candidly admits that it will become harder to play an effective supporting role to the British film industry if the number of leading players continues to diminish.

However, new sources of soft money are helping to fill the gap. The Isle of Man Film Commission has become a significant co-financier, with a revolving fund of $60 million to invest in bringing productions to the island over the next five years. It struck its first development deal with Samuelson Prods.

There’s also a new wave of tax-driven financing, from the likes of Baker Street, Ingenious and Monument, which are offering between 30% and 50% of production budgets, in complex and still largely untested deals. This goes way beyond the traditional sale-and-lease-back with its 12% benefit to producers.

The closure of FilmFour was a huge psychological blow that shook confidence worldwide in the viability of U.K. filmmaking as well as putting a lot of decent people out of work.

No one would claim these are easy times, but the British film industry has too much talent and energy to stay down for long. If the experience of 2002 demonstrates anything, it’s that there are at least as many grounds for hope as there are for despair. And the next hit is always just around the corner.

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