David Cameron (pictured) announced his resignation as UK Prime Minister Friday morning (June 24) in the wake of defeat after Britain’s shock vote to exit the European Union after 43 years, triggering waves of uncertainty throughout the media industry.
“As of today, we no longer know how our relationships with co-producers, financiers and distributors will work, whether new taxes will be dropped on our activities in the rest of Europe or how production financing is going to be raised without any input from European funding agencies.”
- Michael Ryan, Independent Film and Television Alliance
The British public voted Thursday (June 23) in favor of leaving the 28-nation bloc, securing a narrow 51.9% victory, with 17,410,742 in favor of exiting and 16,141,241 voting to remain, or 48.1%.
Cameron assured voters he will remain in his post for the next three months in order to “steady the ship,” but suggested a negotiation with the EU regarding the formal and legal process of exiting “will need to begin under a new prime minister,” to be installed by October.
The “Brexit” decision is seen by some as a significant blow to the UK film and television industries.
Phil Birchenall, projects director at Manchester-based consultancy K7 Media, tells realscreen that until negotiations around the UK’s EU exit take place, the country and media industry will be placed in “a painfully drawn out period of limbo.”
“In the last 12 months we’ve seen a significant upturn in the volume of new prodcos establishing in the UK – many set up by high-profile execs exiting the larger production entities,” he says. “With these fleet-of-foot companies, risk-taking and innovation in program-making come hand-in-hand. But with the threat of a potentially devastating return to recession looming, we see this growth stalling.
“Would you leave the relative comfort of a salary for the uncertainty of a new-start? And if you did, in such an environment investors will be increasingly hard to come by.”
Birchenall forecasts that deals between British and European production companies will still happen, though distribution deals could be more complex if the UK ends up outside of the single European market.
Elsewhere, Michael Ryan, Independent Film and Television Alliance chairman and GFM Films partner, says the decision has “blown up” the industry’s foundation.
“As of today, we no longer know how our relationships with co-producers, financiers and distributors will work, whether new taxes will be dropped on our activities in the rest of Europe or how production financing is going to be raised without any input from European funding agencies,” he said in a statement.
British trade association Pact also weighed in on the nation’s decision to part from the EU. A prior member survey conducted by the association showed 85% of its members intended to vote to remain.
“We do not think there are any immediate causes for concern, but do think that there will be a degree of uncertainty in the medium term,” the organization said in a statement. “Clearly the timetable for this lies with the UK government.”
Pact reassured its members that it will work alongside the UK government, industry colleagues and EU institutions to ensure the trade association will maintain “many of the important commercial advantages” currently in place for its members.
The group will also “continue to address all issues not in the interests of UK producers” such as the Digital Single Market proposals, in the hopes of ensuring its membership and British businesses continue to trade within the EU in the long term.
“Pact will be working closely with both the UK government to feed into negotiations to make sure that necessary trade deals with Europe are secured as quickly as possible, and will continue to influence the Commission’s proposals around the Digital Single Market before they are finally agreed and impact on the UK TV and film sector,” said Pact chair Laura Mansfield.
Discovery Communications, meanwhile, said in a statement that it respects the UK’s decision to leave the European Union.
“Discovery Channel launched in the UK in 1989 and since then it has become one of our biggest markets and a critical creative and business hub,” the statement read. “We will work closely with UK and EU leaders to successfully navigate this change and find new opportunities to shape our future. In the short-term and medium-term, our currency hedging program will significantly minimize the foreign exchange impact of the Brexit vote on our financial performance.”
On the heels of Thursday’s vote, UK broadcaster ITV plc saw its share price plummet by 19.39% to £1.76 in a 24-hour period, while Sky plc has seen its stock price shrink by 6.10% to £8.39.
Mark Carney, governor of the Bank of England, assured the bank has “stress tested” capital requirements of its largest banks “against scenarios more severe than the country currently faces,” raising more than £130 billion of capital, and more than £600 billion of high quality liquid assets.
The British pound, however, plunged as much as 11% when the London Stock Exchange opened Friday (June 24), dipping by US$0.18 for the first time since 1985. The currency has gained from its worst in three decades, but was still down 7.5% at US$1.375.
With files from Manori Ravindran
(Photo courtesy of RT.com)