WB's commitment to Leavesden is good news for U.K.

Warners schools visitors on Hogwarts sets

Ever since the 2001 “Harry Potter and the Sorcerer’s Stone,” Warner Bros. has been responsible for more than a quarter of all investment in U.K. filmmaking — an estimated $4 billion in U.K. production, out of a total of $15 billion.

When Warner opens its giant Leavesden Studios complex this summer, it will become the first Hollywood major to own a U.K. studio in more than 40 years. WB is sending the clear message that the studio is available to others for use as well, meaning this $200 million investment is great news for the British film industry. However, U.S. film folk may be less jubilant. Feature filming in the U.K., especially for epic-sized pics, has long overshadowed American work, and that shadow will be getting even longer.

WB’s commitment to building a studio is unique among Hollywood majors. It’s a continuation of the studio’s overseas expansion, and a clear message that WB is more committed than ever to the U.K., despite the end of the decade-long “Potter” series.

A turning point was 1995, when British rebates made filming very attractive. After the first “Potter” movie became a hit, WB knew that its link to the Leavesden site would continue throughout the franchise. Those eight films made increasingly complex production and post-production demands, and the ability to meet them led studio execs to expand work there beyond the boy wizard films.

“Our activity is increasing because of the size and scale of the market, the phenomenal talent that’s based here and the global appetite for what’s being produced on these shores,” says Warner U.K. managing director Josh Berger.

Now, there is so much activity going through the pipeline that WB has built an infrastructure that includes post-production, and ensures better deals.

One example is the visual effects business. On the first “Potter,” Warner had to struggle to find U.K. vfx studios that could handle the work. Today, London’s Double Negative, Framestore, Cinesite and Moving Picture Co. take the lead on many vfx-driven tentpoles, while several highly regarded California companies have closed and others have scrambled to open branches outside the U.S. to exploit low labor costs, tax incentives or both. Naturally, London’s reputation as a visual-effects hub has engendered concern and some resentment in California, where the modern vfx industry was born and first thrived.

Other Hollywood majors such as Disney (“John Carter”) and Universal (“Snow White and the Huntsman”) also have entrusted a growing number of megabudget projects to Blighty crews and studios.

The numbers tell the story: In 1997, Los Angeles accounted for 13,200 permitted days of feature shooting. Within a decade, those numbers were halved. Of course, London isn’t the only place to lure feature filming, with New York, Vancouver, South Africa, Prague and Australia among the many other sites to aggressively pursue lensing via incentives.

California’s incentive program, aimed at halting runaway production, allocates $100 million a year in tax credits for qualifying film and TV programs to help keep entertainment jobs in the state. The program, approved in early 2009, is significantly smaller and not as sweet as many others, with a maximum 25% tax credit. (Recent WB features shot in L.A. include portions of “The Dark Knight Rises,” which also filmed in the U.K. and other U.S. locations, “Argo” and “Gangster Squad.”)

Leavesden was shut for refurbishment after work finished on “Harry Potter and the Deathly Hallows — Part 2.” But Warner’s U.K. production team under Roy Button has already overseen another seven movies — “Wrath of the Titans,” “Sherlock Holmes: A Game of Shadows,” “Argo,” “The Dark Knight Rises,” “Dark Shadows,” “Gravity” and “Jack the Giant Killer” — as well as helping with additional shooting on “The Hobbit.”

“I think London is the best place to make movies in the world,” Button says. “We’ve got the crew, the facilities, the creative community, the visual effects.”

The eight “Potter” pics represent less than half of Warner’s $4 billion investment in U.K. production since 2000, a timeframe that includes production of such blockbusters as “Batman Begins,” “The Dark Knight” and “Inception” from Brit-born Christopher Nolan, and “Charlie and the Chocolate Factory” and “Sweeney Todd” from U.S.-born but London-based Tim Burton.

For the past decade, Warner has been the industry’s single largest employer, with a corporate staff of 550 based in London, and 20,000 people employed on the “Harry Potter” franchise alone.

From contemporary relationships with the likes of Nolan, Burton and “Potter” producer David Heyman, to its previous ties with Stanley Kubrick and David Puttnam, all the way back to its 1934 film “Murder In Monte Carlo” which made a star of the unknown Errol Flynn, Warner’s cultural roots in Blighty run deep.

But “Potter,” which sprang out of Warner’s first-look deal with Heyman and has grossed some $7.7 billion worldwide in all, took that engagement to a different level.

It has fed Warner’s appetite for British talent beyond the film industry, leading to the purchase of vidgame developers TT Games (which create the Lego franchises) in 2007, and Rocksteady (“Batman Arkham Asylum”) in 2010, followed by the $90 million acquisition of a controlling stake in TV producer Shed Media.

“We’ve had such a positive experience of working in the U.K. that moving into other exciting sectors here is a natural next step,” Berger says, noting the U.K. is the biggest and most important market outside the U.S., and has a scale and talent pool that is second to none.

“Our U.K. companies are market leaders in their own right and produce world-class properties that have appeal both here and abroad,” Berger says.

Within the U.K., Warner’s central role in the industry has often gone unacknowledged, largely because it has not made much investment in lower-budget indie production. That reflects the fact the studio doesn’t have a specialty arm; it did co-finance “Slumdog Millionaire,” but sold off the pic to Fox Searchlight when it closed down Warner Independent Pictures.

Total foreign productions invested north of £1 billion ($1.58 billion) in the U.K. for the first time in 2011; this record-breaking demand gave Warner the confidence to invest in Leavesden, giving Blighty a third major permanent studio alongside Pinewood and Shepperton.

“If we’d lost this studio space, we’d have lost one-third of the U.K. (studio) capacity,” says Leavesden topper Daniel Dark, who has run the site — formerly a Rolls-Royce factory — since it was first used by Eon to shoot the James Bond movie “Goldeneye.”

A 20-minute train ride from London’s Euston station, and just a couple of minutes off the M25 freeway, Leavesden, which is close to the town of Watford on the edge of northwest London, is arguably more accessible from central London than Pinewood or Shepperton, let alone the temporary Longcross Studios site where Disney shot “John Carter.”

The space officially re-opens this summer as Warner Bros. Leavesden Studio (preceded by a “Making of Harry Potter” tour that launched March 31), although it already has hosted some reshoots of “Jack the Giant Killer.” One Warner project that has yet to be announced is likely to start there in June.

But the key message Warner execs are determined to send is that the studio will be available to anyone who wants it. “We haven’t built this place just for us,” Dark says.

The site has been transformed since “Potter” finished. Only the footprint of the original Rolls-Royce factory remains. Nine soundstages have been erected from the ground up, clustered around a large and flexible central covered space.

“This is a completely new studio from what it was when we were shooting ‘Potter,’ ” says Dark. “There’s no leaky roof, for a start.”

The stages include three that measure 32,000-36,000 square feet, and four at 18,000-22,000 square feet. One contains Europe’s largest dive tank. There’s a 102-acre backlot with a clear horizon, flexible workshop space with extensive hard standing areas, office buildings with swipe-card security, a commissary that can feed 600 crew members per hour, and even a Starbucks.

With the U.K. now set to extend its film tax break to include big-budget TV, the new Warner studio also will be well placed to attract the large-scale TV series.

The studio itself is unlikely to be a big money-maker for Warner. “The margins of studios are very thin,” Dark admits. But Warner’s production division will benefit from cheap prices, and the company has invested in the business of renting production services and equipment such as lighting and scaffolding to studio tenants.

“We designed this studio using all our experience of running this site for 14 years, all the experience of Roy Button’s production division, and the 70-year experience in Burbank,” Dark says.

David Cohen contributed to this report.

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