Between rapid inflation, the war in Ukraine and other economic crises, the euro and the British pound have fallen to the lowest levels in decades against the U.S. dollar. (In mid-September, the euro fell below the dollar for the first time since 2002, while the pound-to-dollar exchange rate has fallen as low as 1.08, a low last reached back in 1985.)
As a result, many American film and TV productions are looking to take advantage of Europe’s financial struggles by shooting overseas where they can stretch their budgets farther thanks to the stronger dollar.
“I am familiar with several projects that are making decisions on where to shoot and are taking these advantages into consideration,” Susan Sprung, national executive director of the Producers Guild of America, told TheWrap. “A lot of these costs are locked in early because producers need to know what their budget is, but productions just starting to lock in costs are going to have a significant advantage over ones that were making plans to film in Europe even just six months ago because of how far the euro has fallen.”
It’s hard to determine how many projects might be shifting to European locations to take advantage of current economic factors; many choose to shoot overseas for content-related reasons.
Several producers who spoke to TheWrap, including two who are in preproduction on projects shooting in central and eastern Europe, tell TheWrap that several factors play into whether projects can find bargains by shooting across the pond.
The first is timing. Like a vacationer booking hotel and airfare months in advance before prices increase, producers need to lock in the majority of their filming costs well ahead of time. That means that productions currently shooting or just weeks away from shooting probably can’t take advantage of the newly favorable exchange rates. Among the projects currently shooting in the U.K. and Europe are Bong Joon-ho’s adaptation of the sci-fi novel “Mickey7” for Warner Bros. and Jon M. Chu’s adaptation of “Wicked” for Universal.
But projects that are just getting greenlit may be able to find more affordable rates for transportation, equipment, cast and crew lodging and other vendor services.
But there’s only a limited amount of time to take advantage of those cheaper rates, as it’s only a matter of time before vendors raise their prices to account for the exchange rates and surging inflation. Studios and producers that have long-term contracts with vendors may be able to negotiate lower prices, but often the biggest bargains come from being in the right place at the right time.
“For an independent production, it comes down to how fast you get your loan from the bank and your budget locked in so you can take advantage of the rates to buy more local currency,” said one producer currently prepping for a shoot in central Europe. “And whether you have a contract with a vendor can make quite a difference.”
Still, the exchange rate shift is likely to accelerate an already existing trend of Europe becoming a more popular location for American productions. Even before the euro/pound downturn, many European countries, particularly in the southeastern region of the continent, had joined in on the production infrastructure arms race that has already taken place in American shooting hot spots like California, Georgia and New Jersey.
Along with the U.K., which already has a robust studio infrastructure and a generous tax rebate program, countries like Greece, Croatia and Romania have attracted major Hollywood studios by building more soundstages, developing networks of experienced local crews and creating incentive packages to encourage more on-location shooting.
This month, Netflix will release one of its most high-profile films, Rian Johnson’s “Glass Onion: A Knives Out Mystery,” which was primarily shot in Porto Heli, a picturesque Greek resort town on the shores of the Aegean Sea.
The films that start rolling in these new hot spots in early 2023 will be among the first to save on some exchange-related production expenses compared to early 2022 shoots. How long this advantage will last is uncertain, and will largely hinge on further developments in the war in Ukraine, which has damaged Europe’s terms of trade due to the cutoff of Russian natural gases, and whether the U.S. falls into a recession so deep that studios have to slash production budgets and curtail the number of overseas shoots.
But for now, the demand for new streaming content is making directors and producers look everywhere for the perfect fit for their projects, and thanks to the exchange rates, one producer predicts that more independent productions will shoot in Europe next year.
“If your project’s budget is suddenly stretching out 10-15% farther in Europe than it did before and you have a project that could fit in a Tuscan farm or a Romanian forest town, why not go for it?” he said.