It was overshadowed by the immediate challenges of the pandemic but the fallout from Brexit for the UK’s sales companies and distributors is now pulling into sharp focus. Put simply, it is much harder for UK sales companies to represent European films, and for UK distributors to show them due to the end of support from the selective and automatic funds of the EU’s Creative Europe Media programme.
Independent UK distributors have been awarded significant amounts through the programmes. For example, Modern Films received €103,000 ($120,000) for its release of Alice Rohrwacher’s Happy As Lazzaro in 2018 while Curzon and Mubi shared €368,900 ($430,000) between them to release eight European films in the UK in 2018. The funding was also hugely valuable to UK sales agents. “Creative Europe support is part of the lifeblood of European and British films sold by HanWay,” said Peter Watson, vice chairman of HanWay Films, back in 2015.
Six years on, that life is now seeping away. All deadlines for Media sub-programme schemes for which UK companies were eligible lapsed in mid-2020 and any future funding deadlines fall under the new programme (2021-27), with the UK not directly eligible. “It has been the perfect storm of the pandemic plus Brexit — and Brexit has really affected us. I’m worried about the future of foreign-language European films [in the UK],” says Louisa Dent, managing director of UK arthouse distributor and exhibitor Curzon. “We are in a stronger position with the cinemas and the streaming platform but I worry for the ecosystem for these films. Brilliant films will miss out on a meaningful release, not because there isn’t an audience but because it is too risky an endeavour.”
“Does the distributor want to take the risk without that European support?” queries Eve Gabereau, CEO of Modern Films, which has consistently benefited in the past from Creative Europe funding. “Now, I would look at a European film and think, ‘Is it going to make sense in the UK market without support to help push the film and campaign out further?’”
There are also mounting concerns on the sales front. Stephen Kelliher, managing director at Bankside Films, says UK sellers are now at “a disadvantage” when competing for European films. Bankside is continuing to represent selected European films, for example new Penelope Cruz drama On The Fringe, but there is a wariness about what lies ahead. “Many distributors within Europe do pointedly want to know the films we are selling will qualify as being ‘European’,” says Kelliher. “Media funding has become something on which they rely. I would stop short of saying it is negatively affecting our business at the moment but it may do in the future.”
But while European distributors are now being forced to think twice before acquiring films from UK sales outfits, they are not necessarily being put off entirely. Pim Hermeling, head of Dutch arthouse distributor September Film Distribution, was looking to pre-buy a high-profile European film handled by a UK sales agent and starring two major European names. Normally, when Hermeling acquires a film, he will find out the sales agent’s plans for accessing Creative Europe funding on behalf of its distributors, either through the selective scheme or through the automatic scheme. “That is part of my acquisition decision,” he explains. In this case, no such support was available. Post-Brexit, the UK company was no longer in a position to apply for the funding.
Fortunately for Hermeling, he knew his exhibitors all liked the film anyway, which looked a strong enough commercial prospect even without the EU funding. Nonetheless, he acknowledges EU support is generally crucial to buying decisions made by independent Benelux distributors. “There is no way we can do the films we want to do without Creative Europe [support], which allows us to spend more on P&A,” notes Hermeling.
He believes producers of European films looking for sales agents will now routinely choose European companies rather than UK ones. Some UK sellers, however, are reportedly setting up corporate offices in EU countries in order to continue participating in Creative Europe.
Hope on the horizon
For UK sales outfits and distributors, Media money may have gone but the new £7m ($9.4m) export-driven, BFI-run UK Global Screen Fund (UKGSF), now in its pilot year, is due to announce a new round of awards in mid-October. UK sales agents can apply to UKGSF for funding toward the sales, marketing and promotion of eligible UK films. This is worth up to £60,000 ($81,000) for a single eligible ‘packaged film’ and up to £10,000 ($13,500) for a single eligible ‘pre-sale film’. The film must be budgeted at less than £10m ($13.5m) and be a theatrical property, not a feature intended to debut on TV or VoD. (The second round of the International Distribution strand opened on September 14 and will close on December 15.)
“The UK Global Screen Fund allows us to do things we wouldn’t normally have been able to do,” says Kelliher, citing applications companies can now make for activities including marketing films through social media.
Neil Peplow, director of industry and international affairs at the BFI, points to the additional support available through UKGSF for business development. “We have co-designed the fund with industry,” he says. “We had a consultant that spoke to sales agents, in particular around distribution funding support. What you see is a result of those conversations but that doesn’t mean we won’t continue to be adaptive and responsive to the needs of the industry in the future.”
Some sales agents do privately grumble about the bureaucratic complexity of the application process but the pressing question now is what happens after the ‘pilot year’ — will the fund be renewed or even expanded? “What we want to see… would be providing the buyers of [UK] films P&A money to help release the films,” says Charlie Bloye, CEO of Film Export UK. “We would hope the Global Screen Fund could do that so we’re on a level playing field with European films getting Creative Europe [support].
“The opportunity is there for the government to show its support for the creative and media sector,” continues Bloye. “It is an opportunity to put our independent film sector on a similar footing to our European competitors.”
In its present iteration, UKGSF does not help UK sales agents selling European films. Nor does it offer funds to UK distributors acquiring European films. What’s more, certain companies may not be permitted to apply if they do not fit the ownership criteria. Eligible applicants must be limited companies registered and centrally managed in the UK. They cannot be companies in which more than 25% of the shares are held by a non-UK corporate entity, a TV broadcaster/SVoD platform or operator, or a company defined as a large company under the Companies Act of 2006.
Post-Brexit, UKGSF is not the only source of funding. The BFI’s Audience Fund offers some support to UK distributors but not on the scale of the Creative Europe support they used to receive. However, in July 2021 the BFI announced a one-year ring-fenced boost of £500,000 ($670,000) to the BFI Audience Fund to support distribution of non-English language films.
Certain UK distributors are still accessing Media support for releasing European films within the UK — but that is only because the pandemic has slowed down the releasing process. These are films that had their money allocated in 2020 and are only now reaching UK cinemas. Soon, though, that money will dry up. All eyes are now on what happens with the UK Global Screen Fund.