5:30 AM PST 1/18/2017
The U. K.’s June vote to leave the European Union may have been condemned by much of the entertainment industry, but the falling value of the British pound has been a lot easier on the wallet for Hollywood.
The pound dropped to $1.20 against the dollar, a 31-year low, ahead of reports that Prime Minister Theresa May would favor a “hard Brexit” approach in her Jan. 17 speech. That makes the U. S. dollar go even further in a country long used by studios for productions big and small. “For American producers, Christmas came early,” says Adrian Wootton, head of the British Film Commission and Film London, who says he has seen a “record number” of inquiries from the U. S. “Suddenly [shooting in the U. K.] became about 20 percent cheaper. ”
Thanks to a tasty tax incentive scheme introduced three years ago, Hollywood activity in the U. K. already was at an all-time high, topping $1.3 billion in both 2014 and 2015. Disney — having established the U. K. as its base for all things Star Wars , plus a significant chunk of its Marvel output — earned in excess of $300 million in tax relief over the past five years, and studio facilities have been scrambling to meet the growing demand. As Pinewood doubles in size and Warner Bros. expands its operations in Leavesden, major new spaces have opened in Bristol and Yorkshire, with two soon set to welcome shoots in Belfast. Film London is leading a feasibility study to explore plans for what could be the capital city’s largest film studios.
But the industry could experience Brexit pangs, too. The U. K.’s animation business and London’s growing VFX hub (ILM opened a studio there in 2014) are dependent on a workforce from across Europe, and any clampdown on free movement of labor could leave post-EU Britain unable to meet production demands. Still, a silver lining is possible, if politicians take full advantage of the weakened currency and strike a special trade agreement with the U. S. Says analyst Hal Vogel: “If the Brits get the work-permit and immigration aspects fixed, the U. K. may be entering a boom time. ”
This story first appeared in the Jan. 27 issue of The Hollywood Reporter magazine. To receive the magazine, click here to subscribe.