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U.K. Faces Loss of Standing in Global Biz Following Brexit

For 18 months, the U.K. entertainment industry — along with everyone else in the country — has anxiously awaited the outcome of the British government’s divorce negotiations with the European Union. The matter comes to a head Jan. 15, when Prime Minister Theresa May takes the withdrawal deal hammered out with the EU to the British Parliament for a key vote.

It’s a vote she’s looking increasingly likely to lose. That could send Britain crashing out of the EU on March 29 with no deal in place, which would have far-reaching consequences. Big international film and TV players have already begun hedging their bets or looking beyond the U.K.

Several TV companies are handing in their U.K. channel licenses. The major international channel operators use licenses from British regulator Ofcom to run their services on the Continent, but whether these will continue to be recognized by EU countries post-Brexit remains unclear.

The hope is for a two-year transition period during which a trade deal including EU recognition of British licenses would be thrashed out, but some operators have applied for permits in other jurisdictions. Ofcom filings show that AMC, BBC Studios, Discovery, Disney, Sony and Viacom all handed back some of their U.K.-based channel licenses in 2018.

NBCUniversal International Networks, which runs Syfy and E!, among other channels, confirmed to Variety that it has applied to the Bavarian Media Authority (BLM) in Germany for six licenses, which would be recognized throughout the EU. Turner, whose services include Cartoon Network and Turner Classic Movies, has done the same.

“Turner, like many others, has contingency plans ready, depending on how Brexit negotiations progress, to ensure we can continue to broadcast to our audiences with the correct regulatory options in place,” the company said in a statement to Variety. The U.S. firm added that London would remain its main European hub.

Discovery said last week that it, too, would maintain a hub in London but that it would be moving all of its European channels to the Netherlands because of Brexit. BBC Studios, the commercial arm of the British pubcaster, said it was “keeping the situation under close review to ensure that we can continue to best serve our audiences in any changed regulatory environment.”

Swapping a British license for one from Continental Europe will not have a huge financial impact on the U.K. television sector, but it will see the international firms move people abroad, and undermines the U.K.’s status as the preeminent base for channels in Europe.

In other parts of the industry, the protracted wait for clarity on the post-Brexit picture continues. Concerns over freedom of movement are top of mind in Britain’s sizable VFX sector, where one in three workers is from mainland Europe, and in the animation business, where it’s one in five. About 7% of the VFX and animation workforce earns less than $38,000 (£30,000) a year, the government’s likely salary threshold for incoming workers to receive U.K. visas, according to industry group U.K. Screen Alliance. The alliance wants a lower pay threshold and exemptions from visa costs for industry professionals.

EU member states all belong to Creative Europe, the bloc’s program for the creative and cultural sectors. Program membership is open to non-EU countries in Europe, but only if they pay to play. Should the U.K. leave the EU without a divorce deal, it would lose access to Creative Europe, which would have implications not only for British producers looking for funding but for distributors deciding whether to pick up European projects.

The U.K. government could take the money it would have allocated to the program and use it to boost British works, but that would “never give you the multilateral benefit of putting everybody together in one club — one set of networks,” Agnieszka Moody, director of Creative Europe in the U.K., told an international production conference in London recently.

For British distributors and moviegoers, a no-deal Brexit could mean missing out on a host of European films. Creative Europe provides support for bringing pics from the Continent to Britain, and “if there were no deal, it would really rapidly transform potentially the type of films we do,” said Steve Lewis, director of distribution for U.K. distrib Curzon. “The reason that we acquire lots of them is we have a fairly good idea we are going to get the contribution toward our P&A from Creative Europe.”

British TV viewers just had a chance to relive the bitter fight over the 2016 Brexit referendum in Channel 4 and HBO’s controversial drama “Brexit: The Uncivil War,” starring Benedict Cumberbatch. As the real-life Brexit battles continue to play out, U.K.-based film and TV companies are busy looking for options across the English Channel, and hoping for some clarity at last that will help them navigate the uncharted waters ahead. 

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