Over the weekend I passed by Hollywood blvd and took the photo above after it generated an odd thought:
How is Gravity a British film? The story is about American astronauts. The director is Mexican. The lead actors are American. The film was produced by an American company.
I didn’t think much about it after but after last nights BAFTAs, many British citizens, media, and even filmmakers wondered how and why Gravity is considered a British film. Well, it turns out the real reason why is because of something I’ve written extensively about on my blog: Subsidies.
It’s the reason other American productions like the Batman films, Fast and Furious 6 (which was also dubbed a culturally Spanish film?!), and even Captain America are absurdly designated British films. If they are designated culturally British films, they have access to subsidies which can cover 20% of their production costs.
The UK is a member of the European Union which has the authority to regulate subsidies in Europe to prevent distortions in trade. For example, when the EU found that US biodiesel subsidies were injuring the industry in Europe, they slapped the product with import duties to negate their effect.
The EU also regulates subsidies in Europe because the US and other countries can slap member countries with those same duties if their subsidies are found to injure industries in other countries. However, the EU carved out special provisions for subsidies for films and television to protect cultural content and prevent domination by the US film industry. Given that British citizens are wondering why US films are being dubbed British, you can marvel at how well that policy is working.
How does one actually determine if a film is culturally British or Spanish or French? The EU requires members to submit each film to a cultural test. The problem is the people who determine whether a film passes a cultural test is determined by the government offering the subsidy, not an independent body or EU. Also, the test is vague and silly in some cases. Take a look at the UK’s cultural test. You’ll quickly notice you get score 25% of the points needed by simply having the film’s dialogue in… wait for it… English! This is why a recent article called the British film tax breaks one of the weirdest in the world. I challenge you to figure out how Gravity could attain the 16 points required in the cultural test.
Simply put US studios are blowing past flimsy cultural tests to gain access to lucrative UK subsidies. However, just like the biodiesel case, the UK film subsidies cause massive injury to industries in other countries without subsidies. For the past three years I’ve written about the injury caused to the VFX industry and have sought to institute the same tariffs the UK has used to level the playing field. You can see our legal teams recommendations here as we organize a demonstration against these subsidy programs.