Britain’s Culture Ministry just handed leadership of the industry back to the British Film Institute. The organisation will take control of and devise strategy for £15 million (£23 million) of lottery funding each year, and administer the £100 million tax incentive. Ex-BBC boss and now BFI boss Greg Dyke was understandably ecstatic. He immediately announced that the BFI hopes to increase lottery funding for film to £18 million in 2011/2012 – an increase of 20%. Dyke told me the BFI will take over movie funding in April next year. “This decision is a great vote of confidence in the BFI. It is a bold move to create a single champion for film in the UK and we welcome it. We want to achieve greater coherence across the whole film sector and to strike a balance between cultural and commercial. We see an opportunity to reduce overhead costs which in turn will allow us to put more of the lottery funds into frontline activities.”
The culture minister underlined that the film tax credit – so crucial for attracting U.S. investment — is here to stay. Overseas filmmakers injected £780 million into the British economy last year. Vaizey said: “Some people think there are two British film industries — one indigenous and the other supporting big American movies. I don’t agree. Hollywood investment promotes both British characters and British storytelling.”
Film London will take over promoting the UK as a moviemaking destination from the British Film Commission. Vaizey called this a “public/private partnership” – in short, the government is asking the private sector to cough up if it wants an office whose job it is to attract Hollywood to Britain. Studios such as Pinewood Shepperton and VFX houses such as Framestore would, after all, have the most to gain.
And Film London and BFI will also work with BAFTA and BBC Worldwide on how to increase the number of UK films being released abroad – the role which Unifrance performs for the French film industry. The organisations will also showcase the work of British filmmakers in Hollywood. The BBC already runs showcases in China and in Latin America.
Vaizey also announced he was setting up a ministerial roundtable that will meet every 6 months to address film industry problems.
Vaizey said he would consider proposals from industry organisations such as the British Screen Advisory Council and the Producers Alliance for Cinema and Television to help create “a sustainable film industry”. Vaizey expects to implement these proposals by spring 2012. What was interesting was that he used the word “sustainable”. This phrase has become a shibboleth for British film policy makers. Creating a sustainable British film industry was the original mission statement of the UK Film Council – until it quietly dropped it as unworkable. “The ‘sustainable’ word is back,” Dyke observes. “The Film Council wanted to do it but they just couldn’t live with it.”
Today’s announcement from a Tory government was surprisingly well-received by the traditionally left-of-centre British film industry. It was amusing to see the jockeying for position already within this new world order. It was almost as if the UK Film Council had never existed. How quickly the waters close over one’s head. “There’s an irony in that a year ago the government was forcing the BFI to merge with the Film Council,” Dyke tells me. “Fine, we said, but it’s got to be on the right terms. Today we got those terms.” Read More »
Aardman, the animation company which makes the Oscar-winning cartoon duo, saw its profits fall from £1,061,408 to £469,243 ($747,826) in 2009. But at least it made a profit, Aardman stresses. It was reported here over the weekend that the company had made a whopping £2.5 million loss. That’s because we journos looked in the wrong column of Aardman’s profit-and-loss account, finance director Kerry Lock tells me. Aardman has been dragged down by its TV commercials division reporting its lowest income for 5 years plus an expensive move into its new Bristol headquarters. Because of the way the 20% UK film tax credit works, it makes reporting year-end accounts much more complicated, Lock says. Aardman is owed £2.9 million in tax credits, which will convert the £2.5 million loss reported in one column into the £469,243 profit reported in another. The animator’s in the middle of production on two new Sony movies: Arthur Christmas and Pirates. It’s due to deliver Arthur Christmas by the end of 2011 and Pirates in 2012. The company generated a 59% increase in turnover last year to £31.6 million.
This is exclusive to Deadline and updates Director Matthew Vaughn Pitches Film Fund That’s “Win/Win For Britain And Hollywood”:
PROPOSAL FOR A UK GOVERNMENT FILM FUND
This paper sets out the rationale for creating a UK Government film fund using the proceeds from the film tax credit ceasing to be free and instead becoming recoupable and entitled to a profit share.
Film is the flagship of the UK’s creative industries, but suffers from deep rooted market failure due primarily to lack of scale in its home market (only the US, Indian and Chinese markets have sufficient scale to support their film industries). Nevertheless, the UK has two major competitive advantages in its language and the renowned quality of its filmmakers, cast, crew and service providers.
Broadly, the film industry consists of two sectors: (a) the service providers such as post production facilities, physical studios, visual effect houses etc. and (b) the independent producer community. The first group is part of a global market competing for work on U.S. studio productions and currently much in demand because of its quality and the film tax credit incentivising the studios to base their films here; the second group is a fragmented cottage industry consisting of producers of vastly differing ability, all competing to find money to finance their individual film projects.
Most of this finance comes from offshore (typically a US studio or other foreign distributor) so any profits arising from exploitation of UK films return
… Read More »
Details Of Matthew Vaughn’s UK-Hollywood Film Plan
Hollywood studios have a long history of shooting blockbusters in England. For instance, Britain’s Pinewood Shepperton has been the location of choice for big Hollywood blockbusters like the Harry Potter, James Bond and Batman franchises. But for all intents and purposes the U.S. majors have viewed the 20% UK tax credit they receive for making films here as free money. Now Matthew Vaughn, director of X Men: First Class which is just about to start shooting here, is floating an interesting suggestion. He is proposing that Hollywood majors who take advantage of the 20% British tax credit then repay the money in the event of a hit — and plough that portion of the profits into a UK film fund backing British-produced pics.
“The thing I’m annoyed about,” Vaughn tells me, “is how many movies are made in Britain without any British money in them. It’s tragic how we’ve handled things. Most British producers think it’s an achievement even getting a film made. My goal is that we won’t even need Hollywood money in 10 years’ time.”
Vaughn tells me that the UK needs to monetize that 20% studio tax credit. Since Hollywood needs investor equity now that Wall Street money has dried up, the studios could count on UK plc as a firm partner that takes a secondary equity position. “In today’s cash-strapped world, ‘soft equity’ is a valuable commodity for studios and producers alike,” Vaugh insists. “Looking at the UK’s position … Read More »