Brexit Fallout

With the deadline to split from the EU looming and no transition deal in place, networks are leaving Britain, and distributors worry about losing films

The U.K.’S split from the EU may hurt its entertainment biz

for 18 months, the U.K. entertainment industry — along with everyone else in the country — has anxiously awaited the outcome of the British government’s divorce negotiations with the European Union. The matter comes to a head Jan. 15, when Prime Minister Theresa May takes the withdrawal deal hammered out with the EU to the British Parliament for a key vote.

It’s a vote she’s looking increasingly likely to lose. That could send Britain crashing out of the EU on March 29 with no deal in place, which would have far-reaching consequences. Big international film and TV players have already begun hedging their bets or looking beyond the U.K.

Several TV companies are handing in their U.K. channel licenses. The major international channel operators use licenses from British regulator Ofcom to run their services on the Continent, but whether these will continue to be recognized by EU countries post-brexit remains unclear.

The hope is for a two-year transition period during which a trade deal including EU recognition of British licenses would be thrashed out, but some operators have applied for permits in other jurisdictions. Ofcom filings show that AMC, BBC Studios, Discovery, Disney, Sony and Viacom all handed back some of their U.k.-based channel licenses in 2018.

Nbcuniversal International Networks, which runs Syfy and E!, among other channels, confirmed to Variety that it has applied to the Bavarian Media Authority (BLM) in Germany for six licenses, which would be recognized throughout the EU. Turner, whose services include Cartoon Network and Turner Classic Movies, has done the same.

“Turner, like many others, has contingency plans ready, depending on how Brexit negotiations progress, to ensure we can continue to broadcast to our audiences with the correct regulatory options in place,” the company said in a statement to Variety. The U.S. firm added that London would remain its main European hub.

Discovery said last week that it, too, would maintain a hub in London but that it would be moving all of its European channels to the Netherlands because of Brexit. BBC Studios, the commercial arm of the British pubcaster, said it was “keeping the situation under close review to ensure that we can continue to best serve our audiences in any changed regulatory environment.”

Swapping a British license for one from Continental Europe will not have a huge financial impact on the U.K. television sector, but it will see the international firms move people abroad, and undermines the U.K.’S status as the preeminent base for channels in Europe.

In other parts of the industry, the protracted wait for clarity on the post-brexit picture continues. Concerns over freedom of movement are top of mind in Britain’s sizable VFX sector, where one in three workers is from mainland Europe, and in the animation business, where it’s one in five. About 7% of the VFX and animation work-