Brexit Is "Major Blow" to Film, TV Industries, Says IFTA

The entertainment industry is reeling following the result of the historic Brexit vote, warning that Britain's decision to leave the European Union (EU) could have disastrous consequences.

Film and television producers worry the Brexit will create uncertainty and could unravel much of the financial infrastructure the independent industry relies on.

"The decision to exit the European Union is a major blow to the UK film and TV industry," said Michael Ryan, chairman of the Independent Film & Television Alliance in a statement. "This decision has just blown up our 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. The U.K. creative sector has been a strong and vibrant contributor to the economy - this is likely to be devastating for us."

The British entertainment industry came out almost unanimously in favor of remaining in the EU, warning that a Brexit would threaten the export of British film and TV series to Europe and would cut off British filmmakers from European subsidies, such as the MEDIA program, which funneled around $180 million into Brit productions between 2007-2015.

The Creative Industries Federation, which represents British creative industries across all sectors, called for post-Brexit unity.

While noting that a survey of their members showed a 96 percent support for Remain, and just 4 percent in favor of Brexit, the Federation said it was "vital for all sides to work together to ensure that the interests of our sector on issues including access to funding and talent are safeguarded as the UK forges its new relationship with Europe. The importance of British culture in representing our country to the world will be greater than ever."

The Federation noted that Britain's creative industries were worth $117 billion (£84.1 billion) to the economy in 2013-2014 and Europe is currently the largest export market for the U.K.'s creative industries, accounting for 57 percent of all overseas trade.

Earlier this week, a group of leading film producers, led by Working Title's Tim Bevan and including James Bond producers Barbara Broccoli and Michael G. Wilson, Iain Canning (The King's Speech), Lord David Puttnam (Chariots of Fire), Matthew Vaughn (Kingsman: The Secret Service) and Elizabeth Karlsen (Carol) urged to country to reject Brexit. The group warned of a return to the "horror" of a pre-EU world, where British exports were subject to taxes and tariffs when they crossed European borders.

Read More: British Film Industry Calls for U.K. to Remain in EU as Brexit Vote Begins

Last month, over 250 notably names - including actors Patrick Stewart, Benedict Cumberbatch, Chiwetel Ejiofor, Keira Knightley, Jude Law and director Steve McQueen - signed a "love letter" urging Brits to oppose the Brexit.

"Our global creative success would be severely weakened by walking away," the letter said. "From the smallest gallery to the biggest blockbuster, many of us have worked on projects that would never have happened without vital funding or by collaborating across borders."

A pre-Brexit study by research group Enders Analysis forecast a possible "post-Brexit recession" that "will cause a hyper-cyclical decline in the advertising revenues of broadcasters and publishers" in the U.K.

The Enders study said the British audiovisual industry was "highly exposed" because more than half of its exports, which totaled $5.5 billion (£4.0 billion) in 2014, go to the EU. It warned that the Brexit would "further compromise" its growth forecast for the U.K. industry, which had been for 5.4 percent growth in advertising revenue for the 2016-2018 period.

Once outside the European Union common market, Britain will have to renegotiate its status. Brexit supporters point to countries, such as Norway and Iceland, which are not EU members but enjoy access to the common market as members of the European Economic Area (EEA).

The Enders report, however, notes that EEA members are still required to implement the EU's regulations, even if they have no say in writing them. The EU could object to certain aspects of British law that favor its local industry, such as the U.K.'s generous tax breaks for TV and film productions that shoot there.

Speaking at the Cannes Lions conference on Friday, William Lewis, CEO of Dow Jones and The Wall Street Journal, spoke to risks to broader U.K. economy post-Brexit. While he urged caution, he said he thinks financial services will make a quick exit from the U.K. and relocate to other places in Europe following the leave vote.

Read More: What Brexit Would Mean for Hollywood