A few weeks ago I did a post on the film subsidy race in Europe which got ZERO comments. Well perhaps this post might oblige your response.
Variety broke a potentially huge article that the European Union is proposing new guidelines for subsidies in Europe that will limit them for many US studio productions to 10%:
aid for foreign films with budgets between $13 million and $26 million would fall to 30%, and drop to just 10% for films budgeted above $26 million.
You can read the whole proposal here.
Film Works LA Campaign Manager and lawyer Adrian MacDonald puts it quite succinctly:
In effect, the proposals would not outlaw incentives for US productions entirely, but it would make the rate more and more regressive the bigger the project’s budget is. At 10% for films over $26 million, this would effectively nullify their draw for the US productions.
Why is this huge news for the VFX industry? US Studios send a lot of VFX work to the UK to take advantage of artificial pricing because of a 25% government rebate. Animation studios like Illumination Entertainment send their work to France to take advantage of a 20% rebate.
Now this is a proposal that isn’t set in stone and won’t go into effect until 2015. However studios have to plan in advance where post-production work will be done and this will probably be taken into account.
If it does, mark my words: watch how fast the VFX industry leaves. When huge subsidies were passed in Canada and the UK it was as though projects were lost overnight in California. The studios will place pressure on the UK facilities to send work to locations that offer huge subsidies like Canada or perhaps even Louisiana. I’m not sure if this event is related but I did hear word of a UK facility that has already started the process of sending more work to a satellite office in the US.
As you know on my blog I rail against all film subsidies, even the ones offered by various states in the US. It artificializes the price of VFX and forces VFX professionals and their families to bounce around the globe as they live out of their suitcase chasing a job.
Even if the UK can continue the 25% subsidy, it’s still under the huge pressure that Imageworks New Mexico faced: The state offered a 25% rebate and it was shut down because studio clients preferred a 46% subsidy in Vancouver!
Ironically this event may be a catalyst for unity between Californian VFX professionals and UK VFX professionals. We are both in relatively big media markets that are at a disadvantage to various state and provincial subsidies.
In the coming weeks I’ll be putting a proposal up on my blog to get your reaction on how to stop these subsidies. The concern I have is whether I will get an educated response or the usual complete apathy. If it’s apathy and the subsidies in the UK are capped, you will learn what I really mean when I say: