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British biz hangs on Film4’s future

'Slumdog Millionaire' producers seek funding

LONDON — Box office may be up in the U.K. but these are troubling times for the British film industry.

Indie film producers in the country are warily eyeing the potential blowback on them as the recession continues to hit hard the fortunes of Blighty’s broadcasters and uncertainty over the future levels of public investment in filmmaking increases.

The major distribs, on the other hand, are cashing in as U.K. auds continue in droves to their local theaters.

Buoyed by the boffo performance of “Slumdog Millionaire,” which has grossed $40 million in only four weeks, the U.K.’s yearly box office to date is running around 15% up on the same time last year.

Ironically, however, it is the long-term fate of Film4, one of the principal producers of Danny Boyle’s Academy Award-winning hit, that is causing so much concern.

Execs at Film4 parent Channel Four have claimed the broadcaster faces a funding gap of up to £150 million ($216 million) a year by 2012 unless it gets a bailout and has axed 15% of its workforce as part of cuts aimed at saving $140 million over two years.

That could lead to some major changes in how Film4, one of the key funders of independent British cinema, is run.

A cutback in its annual $14 million budget appears likely, while another option could see the shingle retreat from its development and production activities to simply become part of Channel Four’s inhouse film buying division.

Even the nightmare scenario that Film4 could be shuttered completely no longer appears to be off the table.

“If Channel Four can’t find the answers to these funding issues, we will have to think hard about the future of Film4,” Channel Four chairman Luke Johnson said recently.

“The odds fluctuate daily but at the moment I’d say there’s about a 60-40 chance that we’ll still be around in a couple of years,” says Film4’s head of commercial development Sue Bruce-Smith. “That’s why we’re fast-tracking projects at the moment like Chris Morris’ ‘4 Lions,’ Andrew Macdonald’s ‘Eagle of the Ninth’ and the new Mike Leigh project. It’s our way of giving ourselves some backup.”

Film4 topper Tessa Ross appeared in front of a U.K. government committee March 18 to warn that the film company’s future was under threat.

“We would be foolish not to be worried,” Ross told the attending peers at the House of Lords Communications Committee, which is undertaking an investigation into the state of the U.K.’s film and TV industries.

The Film4 situation is leading to some seriously furrowed brows among the U.K.’s film community.

“It would be devastating,” says producer Mark Herbert, whose shingle Warp Films has a close relationship with Film4 through its relationships with filmmakers such as Shane Meadows. “The likes of Tessa Ross and Peter Carlton at Film4 actually help you build your product. Just look at ‘Slumdog.’ The market didn’t react to it that strongly in the beginning but it was Film4 who nurtured it. They allow you to be distinctive and original.”

The insecurity extends far beyond just Film4.

BBC Films, which has an annual budget of $17 million and is another key developer and funder of British film, has been without a topper ever since Jane Tranter confirmed in September she was ankling her post as controller of fiction.

Tranter is joining the BBC’s commercial arm BBC Worldwide in Los Angeles as executive VP of programming and production.

While BBC Films execs are keen to stress that all is well, the company may find itself affected in the long-term by the ongoing calls from some to reduce, or scrap entirely, the BBC’s funding model.

The pubcaster has always been funded by public money through a license fee paid by every U.K. household with a TV set. With viewers now increasingly watching TV online and on multi-platforms, BBC execs are rushing to prove themselves relevant in the digital age by working with Brit telco BT on Project Canvas, a box that enables viewers to convert a broadband signal straight to their TVs. The success of that project, rather than BBC Films execs’ proven track record of delivering quality fare, may ultimately determine the shingle’s future.

Clouds are also gathering over public funding org the U.K. Film Council, which is up for review in 2010. Established in 2000, the U.K. Film Council receives its coin from the U.K. government courtesy of the National Lottery.

With London set to host the Olympics in 2012 and public coin at a premium, particularly with Britain’s financial sector in crisis, there is no guarantee that the Film Council’s current budget levels will remain intact.

The org. has already made provisions for a decrease in more than $30 million of lottery coin over the next five years.

“There’s no doubt there are big challenges ahead,” says a U.K. Film Council exec. “It’s a curious period because public investment in film has been doing so well of late and it’s never been more needed but we’re all looking at a reduction in production money. There are so many good projects out there but we’re just not going to be able to fund them all.”

Some execs, however, are remaining calm despite the uncertainty.

“I agree that they are at risk but I would be amazed if there is the political will to totally remove any public support for film,” says Pathe U.K. managing director Cameron McCracken, who has regularly collaborated with both Film4 and BBC Films.

“I don’t have any doubt that it will be squeezed. They may have to refocus and focus more on emerging voices and people who say things the market won’t necessarily support.”

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