Will #Brexit Lead To A #VFXit?

london

Tonight a majority UK voters chose to leave the European Union which as of this writing is leading to a meltdown in financial markets and wild drops in foreign currencies agains the US dollar. There’s been a bit of chatter amongst many in VFX as to the ramifications for those who work in UK VFX facilities which is made up of many migrants from the EU.

In my view, while most experts agree that #Brexit is a great evil, it might be advantageous for the UK VFX industry. The UK along with the rest of the global VFX industry relies heavily on massive subsidies offered to Hollywood studios which send work to locations which offer the most amount of free money. While this blog has a negative view of subsidies, many in the UK look at subsidies for US studios as a necessary “deal with the devil” in order to win work for the UK and make it competitive.

One advantage #Brexit will bring is the removal of EU restrictions on UK film subsidies for US producers. The EU mandates that member subsidies offered for film have a cultural test to distinguish it from anti-competitive subsidies that it cracks down on for other products. This is why you see many films adding some component of either mentioning the UK or blowing up London. It’s meant to pass a cultural test mandated by the EU so producers can get access to free money. By leaving the EU the UK can remove the cultural test allowing any film to be a candidate for those subsidies.

(Update: Variety has an article that supports my view.)

Another advantage is the UK avoids having their film subsidies reviewed by the EU every few years which is a requirement. A few years ago the EU actually proposed capping the film subsidies in the UK as this blog reported. Furthermore, the EU actually responded to a statement I sent to them supporting UK subsidies being curtailed. So you’d probably wouldn’t be a big fan of the EU if you were protective of UK film subsidies.

While a steep fall in the Sterling seems to be apparent, if this is a long term trend then it would probably be another necessary evil for luring more production work to the UK. A strengthening US dollar against the UK would make it cheaper to do VFX work there. Three years ago Australian VFX facility Rising Sun Pictures along with artists living there cheered the steep drop in the Aussie dollar:

The bad news for UK VFX artists is that #Brexit may weaken some EU mandated labor laws meant to protect them. For example the EU mandated a 48 hour work week limit which many UK facilities ask their workers to opt out of. This might be a good catalyst for many of you in the UK to seek membership in BECTU which has actively working on a unionization effort in the UK.

Another potential negative ramification from #Brexit could be on EU migrants in the UK. It seems voters who wanted to Leave have used immigration as a scapegoat for their problems similar to conservative voters in the US who have made Donald Trump the nominee. This may lead to legislation that makes it harder for EU migrants and other immigrants to attain a visa to work in the UK’s VFX industry. However some international VFX artists have expressed support for having to be displaced around the globe every few years as it gives them a chance to see the world. If immigration to the UK becomes tougher you can bet that UK facilities and US producers especially will be more than happy to see artists move to Canada where recently trimmed subsidies pay around 55% of resident salaries.

Soldier On.

52 Responses to Will #Brexit Lead To A #VFXit?

  1. Jackadullboy says:

    But won’t losing the 50-odd (continental) percent of their workforce be a bad thing? Probably a good time for Ireland to offer some juicy incentives to studios… Being the last remaining English-speaking outpost still in the E.U.

    • Björn Windorf says:

      Scottland might follow Ireland. The government already started thinking about seperating from England.

      There will be hard times for Britain.

      • . says:

        Björn : utter nonsense…..

        Scotland is a separate country already.
        https://en.wikipedia.org/wiki/Scottish_independence

        It will make ZERO difference and actually improve the quality and strength of English productivity in the long term.

        In most EU countries people speak English as a double language.

        England should be the default language of the world, simply to make communication easy.

        It’s obvious you know really little about England, English economy, the reasons for the exit and the future…..yet still offer a conclusion.

        ………..there is always an opportunity to learn !🙂

        The fact is the EU does not work well… it has bad leadership. The exit was caused by the unprofessional political of it’s mediocre leadership,

        To leave, actually strengthens England in the long term.

      • thank heavan says:

        Within the next few years we will see a major economic collapse within the EU and euro. The central bank is printing money and that combined with the unbearable austerity and the continued pain of social cost cutting in places like Greece, Spain and the eastern European nations, will break the back of the EU. The biggest of fence so far to EU citizens so far was the adoption of government powers to seize private citizen bank account savings without warning, due process or legal appeal. First roles out in Cyprus, then extended to Greece, Spain, Portugal and France. George freaking Orwell was right!

        Several other nations with a similar suspicion of unelected EU dictators in Brussels, like Denmark, Netherlands and Sweden, are already agitating.

        British people always wanted free European trade, easy travel and close relationships and cooperation, just not the sinister, undemocratic overtones of where a small number of faceless, unelected EU bureaucrats are pushing the European continent.

        When the big EU economic crisis hits, the UK will thank the stars they got out ahead of the train crash. Likely from the ashses will emerge EU v2.0 with Britain on board again, in a new, reformed and democratic model.

    • ex_london_worker says:

      Having worked in London for a few years, I can say it’s much more that 50% non english workers in London. There is simply not enough english staff to fill the seats in vfx, unless they are all straight out of college, like at MPC🙂

      • MPC Supervisor says:

        So thanks to MPC that give them a chance. Stop mocking my company!

      • grevet says:

        I would say closer 80% are EU. Newcomers from EU countries are often surprised that there are few, sometimes none, UK workers in vfx.

        There are enough UK workers of high quality, at least there were, but simple fact is vfx companies have a bad name amongst UK workers. In the last 10 years, huge numbers left the industry to change careers precisely because vfx firms started hiring huge numbers of vfx artists from EU countries on very short term contracts on ever lower wage levels. If you are actually from the UK and want a house, social life, family plans, some kind of job security, vfx is just not a proper job. People made a big thing about EU labor laws but fact is that once UK firms regularly offered permanent jobs with pensions and paid leave to retain staff. Vfx firms also made vfx artists sign ‘opt out’ contracts to exempt them from EU labor law anyway. The biggest affect of unlimited, temporary EU artists movement into UK vfx, often from economically poor countries where people are desperate for anything, meant vfx firms incorporated 4 week freelance contracts with unpaid overtime as standard. At that point, lots of UK artists said ‘fuck this, I’m off for a serious career’.

        Especially when you see a firm like MPC ( a French company in London) who were sole vfx provider for jungle book for Disney, hired huge numbers of euro vfx artists before schedules were agreed, then laid them all off after 5-6 weeks. EU workers so none given relocation costs either. Then most of rest laid off later on when mpc couldn’t complete their shot quoata on time, budget and quality. That’s the kind of shit that goes on in Soho and resulted in an exodus of UK artists out of vfx.

        Most vfx artists pretty much despise the vfx firms and more and more UK voters cottoned onto the fact that globalization firms like mpc, fs, dneg, etc., are just marketing ‘smoke and mirrors, snake oil salesmen’ who don’t add anything real to the economy but in fact damage the economy and steal tax money. Does huge numbers of euro temps working in loss making firms help anyone in the UK? And I globalization sentiment is another facet of the brexit vote. In fact, many of the libertarian and an to globalization movements in the US, Canada and France have been cheering the line in the sand drawn by UK voters last week.

      • Supe X says:

        @ grevet

        Really great post. I had no idea London descended to that .

      • correction minister says:

        MPC were not the sole VFX provider for Jungle Book.

      • Many Pretentious Cnuts says:

        Not at the end. They did lose several sequences before then when the shit started hitting the fan. Go over to the old LinkedIn archives around the time, Stan-the-Man recruiter clearly has posts saying mpc London, sole jungle book vendor. It just fell apart. And they did layoff loads and loads of staff over screwed schedules and lost work.

    • grevet says:

      Malta is English speaking also.

  2. vfxmafia says:

    Holyshit!!!!….the Pound is 75 freaking cents to on US Dolla!

  3. vfxmafia says:

    What good are UK subsidies……if the Pound goes down to 50 cent?

    • anon says:

      try decaf

      it will pick up again soon, as though nothing happened

      ultimately it will make no difference

      nothing really changed …..except improvement

      the most likely outcome is that it will become, ultimately, stronger

      • vfxmafia says:

        Really nothing happend? Tell that to all the English guys i saw in the office today with mortgages back in London. Tell them there bank account is worth half as much.

        Good news is I can afford a flat in London now….

  4. vfxmafia says:

    I think i just read this right?….but the CAD is pissing on the pound? RIght now 1 CAD = .56 Pound????!!!!!!!!!!!!!!!

  5. vfxmafia says:

    Did you ever hear about an economic story about Tulip bulbs?

  6. vfxmafia says:

    Wait?!!! Vancouver guys are making more than the London guys now?

  7. vfxmafia says:

    Candian TD bank issued a statement today…..(its actually the bank i belong to since moving to Vancouver”

    For Canada, the result could be a considerably weaker economy for the rest of this year than previously estimated, TD Bank said in a client note Friday morning.

    “We estimate that confidence and financial spillovers from a leave result could shave about 0.5 to 1.0 percentage point off GDP growth for the U.S. and Canada in the second half of 2016,” economists Beata Caranci and Fotios Raptis wrote.

  8. vfxmafia says:

    Im really scared for that pool of Migrant VFX workers (from all across Europe)…..who are living and working in London.

    Whats gonna happen to UK VFX companies? or the London VFX hub?

    • well its like you in vancouver., you get paid shit compared to the US. but as long as you don’t have costs in the us or need to convert back to USD you are fine. same for the UK. their cost of living is still the same. they are just fucked if they need to wire money home to the us

      • vfxmafia says:

        thats the problem most international workers have bills from their home country. Most US guys have left vancouver. They tried paying mortgages…and when Oil tanked the CAD…..at one point the CAD was 50 cents to the USD dollar. Im sending out resumes every day.

        International migrant work force is a complete failure.

      • Caleb J Howard says:

        The Canadian dollar has never been anywhere near as low as $.50 US. In 2002 it hit it’s lowest ever at 61.79.

        Here are some – you know – facts:

        http://www.tradingeconomics.com/canada/currency

        You can also look here:

        http://www.bankofcanada.ca/rates/exchange/cad-usd-rate-lookup/

        So…

        no.

      • vfxmafia says:

        @ caleb

        I am US worker in Van..and i have to pay monthly US bills. The CAD hit about 55 cents to the USD about 4-6 months ago when Oil dipped in the $20 barrel range.

        I can send you copies of my wire transfers. At one point I had to pay $1000 USD credit card bill was about $1500 CAD especially after TB bank tacks on fees…and so does Bank of America. Usually the Banks tacks on about extra 5 cents. (So if the exchange rate is for example is 75 cents to the US dollar….the banks will give you a rate of about 70 cents convertion.)

  9. Disturbance-in-da-Force says:

    Here is a shit kicker…..now that London has gone back to post WW2 currency levels….

    Can UK tax payers afford to pay Disney to bring Star Wars to London.

    • moreover says:

      Its only really a storefront there. Way out of Soho, small number of ex-framestore guys who were laid off, so probably accepted quite low money just to get a job.

      What may hit them is the extra paperwork and costs of hiring euro temps in the near future. They are totally dependent on euro temps,like 70-80% of staff. Maybe just send the work to Vancouver though, it is a really small office there and they don’t do any high profile shots.

  10. anon says:

    Such a really wrong image…

    It is actually the opposite.

    It is not London either……it is the country.

    Do you know what the EU is and how it works ?
    Do you understand how their policies have impacted people lives ?
    Do you understand how the Conservative Government has worked against the UK film industry, the NHS, general society in many different ways ?
    Why should a terraced house cost over a million pounds ?

    You must not read very much Daniel.

    This is a day to celebrate.

    England is still European but not bound by repressive rules and regulation from politicians that are invisible to the general public and inaccessible.

    This is back to normality.

    • vfxmafia says:

      Alot of people dont understand what the EU is.

      The EU was started by coal and steel corporations in the 1960s. It has always been about corporate domination. In fact its very similar to NAFTA was in the US.

      Open borders…..where giant mega corporations control everything ….make up trade agreements and even there own laws despite…..i cant wait for the Trans Pacific Partnership. The corporations wont even tell us what in that one.

      Globalization is not a fan of the working man.

      (It good to have the trolls back LOL)

      • anon says:

        Off the vfx topic….but germane to the post.

        Two relevant, “controversial” documentaries people maybe interested in seeing to understand the situation:

        what is the EU ?

        what happens with open door immigration?

        Africa, China, India have over a billion people …..the Middle East and North Africa have 30% youth unemployment, plus 30% of the population is between 15 and 30…..which is100 million youths, the highest proportion of youths to adults in the region’s history

        The number of people in UK is about 64 million

        The UK offers migrants free housing, free food, free money and job opportunities. They were housed, en masse in hotels while real English people were being removed from rental property since renting to an immigrant made more money for the landlord.

        The rich have driven Europe into massive debt, so the birth rate decline and that was being compensated for (to boost house prices) by mass import of migrants.

        The system is really a process of social and cultural abuse by the rich in the name of profit.

        The biggest issue in London is financial corruption….

        Remember it was not racism that created slavery but economics, and economics is a central reason for the mass migration.

        https://next.ft.com/content/f454e3ec-fc02-11e5-b5f5-070dca6d0a0d

        http://www.forbes.com/sites/jwebb/2016/05/12/but-london-and-new-york-are-fantastically-corrupt-too/#6d69b5bb40b1

        The fact is very rich people influence politicians and the media and unless people stand up and realise they are being collectively ripped off by such people evading the tax system, gaming the stock markey etc……..then nothing will happen.

        Charles Ferguson’s “Inside Job” is a perfect example of what is really going on in financial circles.

        The money created by society…..should cycle into reinvestment….. not get sucked out into tax havens and Asian investment.

        Since the news media doesn’t create a moral crusade to do this…..the system currently remains.

    • anon says:

      to be clear…….

      when I talk about “the rich” I don’t mean celebrities with a few million…..or even the Queen……….

      I’m referring to people with multiple billions, who have no affiliation to anyone, who really can make huge changes to society…..and do so, to undermine the majority intentionally.

      I’m referring to bankers who are deliberately abusing the system, and playing and betting against it for their own benefit.

      “Inside Job” by Charles Ferguson, on archive.org, is quite honest and focused about what is going on in such circles.

  11. vfxmafia says:

    Very curious as US citizen working in Canada i find all this interesting. Im still trying to learn about Brexit……

    From a US standpoint…I am migrant worker. A casualty of NAFTA….a casualty of Big banks…….casualty of corruption in politics…and a casualty Unions being attacked….a casualty of Globalization.

    I have seen Los Angeles riped apart by the greed of corporations called Disney……Dreamworks….Sony…..with deaf ears from our politicians (especially our democrats). In short i have been left behind in “this global economy”.

    All of this Brexit seems similar….especially when i hear Goldman Sachs behind the EU….I thought Bernie Sanders said it best….(especially without all the immigration rehtoric)

    http://www.cbsnews.com/videos/bernie-sanders-on-brexit-what-it-would-take-for-him-to-endorse-hillary-clinton/

  12. harry says:

    “#Brexit may weaken some EU mandated labor laws meant to protect them”

    Daniel, I know you don’t know the UK vfx scene but the firms all require workers to sign opt-out contracts to agree to forgo all the EU labor law protection anyway.

    Also, very few UK born people actually work in vfx firms. Unlimited European temp workers flown in on short contracts, often desperate from poor countries, lead to a collapse in UK folk working in vfx firms. They makeup maybe 10-20% of staff in any firm and mostly freelance, under constant threat that a Romanian or French guy will replace you at any moment. Brexit was a general kickback against globalisation and corrupt politicians ignoring people and beating them down across many industries.

    Let the chips fall where they may. If Dneg, mpc, cineshite, Framestore completely move to Canada, nothing is really lost. They don’t pay much tax, don’t make any significant profit, don’t provide quality employment to UK folk but boy to they steal a lot of tax.

    Britain has a rich heritage of film production, artists, directors, actors, engineering and technology development. When these scam firms go – and be clear they were nothing but flame and quantel advertising companies 10 years ago, before subsidising CG video game movies for Hollywood producing studios became trendy – the UK will still make movies and likely create far higher content quality and quality jobs, even if on a smaller scale. But who knows, maybe it will be even better when the scam firms are run out of town. Put their heads on stakes outside Tower Bridge! Brexit! God save Queen and country!

    • truth says:

      @harry ” the firms all require workers to sign opt-out contracts to agree to forgo all the EU labor law protection anyway.” – you can only opt out of the 48 hour working time directive. It is not legally possible to opt out of any of your other statutory working rights in the UK such as holiday pay, sick pay etc if your status entitles you to that (ie you are on PAYE). Any employer that tries to get you to do that is breaking the law.

      “very few UK born people actually work in vfx firms” – totally wrong. The typical makeup of the large London VFX facilities is 50% UK nationals, 25% EU and 25% from outside the EU. If you think otherwise you’re exhibiting the same level of confirmation bias as Nigel Farage and his friends.

      “often desperate, from poor countries”, what, poor countries like Germany and France, where the majority of non-UK EU vfx workers hail from?

      “They [UK nationals] makeup maybe 10-20% of staff in any firm and mostly freelance, under constant threat that a Romanian or French guy will replace you at any moment” – nonsense.

      You’re actually just a shit-stirring racist, aren’t you? Do you have the courage to say any of this poisonous tripe to the French guy sitting next to you in Soho? No, I guess not – just another little Nazi coward keeping his head down until it all falls apart.

      • brexit independence day says:

        Where are you getting these figures from? 50%, 25%, 25%? Sounds very precise for firms who turn over nearly all their staff every six weeks or so? What is the reporting criteria and sample rate? Which body? CBI? BECTU? The firms? We know how corrupt the firms are.

        I agree with the poster above. At mpc on 4 shows over 3 years, I would say the average was 25% UK workers max. At PF it was less. At method, on a show of 70 people, there were 10 UK. This seems pretty average with friends I talk with.

        Actually, France and Germany, to the average EU citizen, is probably as poor from their perspective, as Romania, Kosova, Bulgaria, etc, because the EU is economically moribund and devoid of opportunity. Take a wander around the slum banlieues of north and east Paris like clichy-sous-bois and St Denis. Its practically third world. That’s why so many desperate French kids head to cynical factory firms in Soho.

        And calm down with the “Race” card. For one, its talking about national politics and policy of other European nations who share common gene ancestry, ergo there is no race issue involved because Europeans from Iceland to Turkey and even Morroco and Israel share a common gene pool. ultimately, we are all from the desert plains of East Africa. Unfortunately, media brainwashed people who can’t rationally debate will jump forward with “Racist!” Hoping debate will go away. Sorry, its weak, its ignorant, its disrespectful to people who do really suffer from racist behavior.

        FS, dneg, MPC, cinesite, others, all claim large subsidies from UK tax payers and from education training grants as academies in the name of the UK economy. Most tax payers will assume that UK industry that they are contributing towards does not include employing nearly exclusively short-contract, euro temps on foreign profit (Hollywood) film productions with a cut going directly into the owners/directors pockets, for firms who engage in tax avoidance and are pretty unsuccessful anyway,only able to stay in business precisely because they are taking UK taxpayer funding.

        So what’s the point of all this? Does it serve any benefit to the UK economy? No.

      • harry says:

        “Any employer that tries to get you to do that is breaking the law.”

        And if you complain or refuse, your contract is terminated. Romanian or French guy flown over next day to replace you.

      • van-displaced worker says:

        Id say in Vancouver…im seeing maybe 10% Canadian (90% International)

    • Nevermore says:

      Quit the industry. There’s life after VFX. I miss my friends and nothing else.

      I’m no longer stuck working for the same 10 companies in an andustry run for the most part, by assholes. It’s not just the company executives, it’s many of the artists who give their time away for free, let themselves go unpaid and kept working, put their jobs before their health and relationships. You spineless wimps ruined this industry too. Congratulations.

      Frequently, when I am heading home at around 5:30, I remind myself to be thankful for better opportunities in my new field.

      Stop being suckers and quit. Do something else!

      • anon says:

        I agree.
        I am trying VERY hard doing something else and NOT work in VFX.

      • Brandon Benson says:

        What the fuck else? If an artists is making about six figs a year. It’s not so easy. Many people are trapped in the job. What are you doing now that commands that pay for going home at 530. You probably work more days to make the same money? Be honest.

      • i agree. its hard to find a comparable job, if your skills are not as transferable.

      • Brandon Benson says:

        And what the hell is VFX soldier doing for a living now?

      • Dan the Shizzle says:

        I think I might take up Gynecology. How bad could it be. 😊

  13. reality says:

    Brexit will never happen. If the UK leaves the single market then the City of London is over as a world leading financial centre. London generates 30% of all tax receipts in the UK – £250Billion. Just the 450,000 employees in the City pay 25% of all UK income tax – around £65Billion – half a million people paying 1/4 of the income tax of a nation of 65 million. Even if only a small percentage of that workforce relocates to Paris or Frankfurt the damage done to the government’s tax revenue will be immense. Once the UK government – any UK government – stares into the abyss and really gets to grips with the ruination that awaits them they will choke.

    Brexit will quietly die in the endless negotiations over the next half decade.

    • Oliver Cromwell says:

      If brexit doesn’t happen, it will be a clear breach of UK democracy and a warning alarm to the population of coming dictatorship.
      It would require a major constitutional overhaul and repeal of several laws, including the 800 year old magna carta charter.
      Brits are not slow to riot or revolt against government in extreme circumstances. The worlds first Republic was established 500 years
      ago in the UK under Cromwell, when kings were overthrown in civil war, over two hundred years before France or the US.

      The new leader has said Brexit means Brexit. Article 50 date is in discussion now. the US, China and India have already started
      negotiating new trade deals with the UK that will reflect removal of EU trade restrictions. Most UK trade, 60%, is still made with
      US, far, far, more than our EU trade. We have strong cultural and trade links with China and India, where English is widely spoken
      in business, through shared history. There have been Chinese and Indian communities established in the UK for hundreds of years.
      Canada, Australia, New Zealand and several Caribbean Nations still share the UK Queen as a state figurehead. Britain has always
      been far more outward looking than any EU nation, apart from maybe Spain and Portugal.

      The EU is undemocratic and sinister. Laws and finances are set by unelected, anonymous bureaucrats in Brussels. This is deeply
      troublesome for many UK folk who are used to parliamentary democracy. For most of their history, the central European nations like
      France, Germany and Italy have lived under central state control or dictatorship. This is a very different history to the maritime
      nations on the outer edges like Britain, Ireland,Spain, Greece.

      The biggest issus at the moment is practical. The EU economy is permanently flawed. It is designed to prop up French farmers and
      government departments as well as German cars and manufacturing at any costs. It has trapped nations like Greece, Spain, Portugal,
      Poland, Lithuania, etc, in a permanent depression, dependent on France and Germany. There is no solution to the huge EU unemployment
      issue, other than other EU folk relocating to the UK.

      Unfortunately, this has lead to crisis issues in the UK in terms of huge numbers of unemployed EU workers putting strain on UK
      infrastructure. The UK can’t absorb unlimited immigration, over 1M in some peak years. There is a severe housing shortage now,
      state resources like healthcare, schools, roads, welfare payments stretched to the limit. This had to end.

      The EU economy and democracy issues are in full blown crisis now. The current EU run by unelected French and German commissioners
      will collapse within the coming decade. Greece and Spain will almost certainly leave with the next few years. Italy and France
      are in severe economic malaise. Once Italy enters crisis, it will trigger a collapse in France and then goodbye EU. Europeans
      want an EU but not the current undemocratic French-German mafia. There will be a new EU in the future including the UK but
      getting out for now is the sensible thing.

    • Reality Check says:

      @reality

      45Ok city workers vs 50M+ angry people in civil riots? I know who my money is on? Many British people would rather live in a tent and fish for supper rather than be pushed around like slaves by bankers and anonymous bureaucrats in Europe.

      BTW, the city will probably expand outside the EU. Singapore and the American Virgin Islands seem to do OK with banking. Plus all the corrupt EU officials will want to launder their billions somewhere outside the EU. Bankers are parasites. They just make up some numbers on their laptop then say “now you owe me £1BN. Pay up or I’ll take your house!”

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