U.K. producers body Pact is launching proposals to fund local pics without more public money.
The proposals give producers ownership of their projects, rather than having rights remain with the U.K. Film Council or the regional funder or broadcaster that put up coin. This fundamentally changes the business model and empowers production companies.
“This is not about seeking more funds,” said Pact CEO John McVay. “It is concerned with using what is already on the table to create growth based on success rather than subsidy.”
Pact estimates that more than £100 million ($154 million) is invested by public sources into U.K. film production each year, but because of the current business model, producers of even hit films remain reliant on public funding and struggle to share in revenues from high-grossing films.
This is backed by a U.K. Film Council report that found more than half of independent production companies lost money because they couldn’t retain rights and had little to invest or leveage negotiations.
The report recommends that production companies keep all the recoupment of public investment and put 70% of that into an interest-bearing escrow account, along with any tax credit, that they can tap for future films. If not used within five years, the coin would revert to the public funders to invest in other projects.
Public sector investment currently gives only 30% of funds recouped back to producers and has, at times, used the rest for non-production related business affairs.
The report backs a government committee proposal for tax relief on U.K. films with a budget of less than $7.5 million to be raised from 20% to 30%.
It also advocates cutting the broadcast license period to five years and the introduction of a “use it or lose it” provision where rights revert to the producer if the broadcaster is not using them. This is similar to the terms for TV productions.