UK Buyers at American Film Market may receive a slight reprieve since ‘Brexit’ court ruling:
On Wednesday the 2nd November, in Santa Monica, the annual American Film Market (AFM) kicked off. The AFM is a marketplace where industry professionals conduct business and a place where production and distribution deals are closed. In just eight days, over $1 billion in business will be sealed —this is both on completed films and those in every stage of development and production — this makes AFM a must‐attend industry event.
Meanwhile in the UK, yesterday (3rd November), the British High Court passed a ruling that it is Parliament who has the authority to trigger Article 50 of the European union treaty (the legal route for Britain to leave the EU). Almost instantly the financial markets responded to the ruling, and the potential for a ‘softer Brexit’, (or could it even lead to a no Brexit option?!) with the pound sterling surging to a four week high against the dollar and euro. The Bank of England (BoE) also announced that it was to scrap plans to cut interest rates even further, and a much stronger than forecast performance of the UK’s dominant services sector, all combined to push the pound to $1.24 against the dollar (in October it had been as low at $1.15, versus pre ‘Brexit’ $1.50).
Why is this significant for the film and TV Industry?
A recent article in Variety highlighted the problems facing UK buyers attending the AFM due to the falling pound, according to the article the pound has fallen 16% since Cannes. The falling exchange rate has had a drastic impact on UK distributors. Many distributors pay a minimum guarantee in advance, mostly in dollars and euros, these are usually based on forecasts, and as such they were agreed pre-Brexit. In real terms this means the numbers are around 15-20% lower than the reality of the present financial markets.
While the weak pound might still be a dampener on British buyers at this weeks AFM, they aren’t the only ones worrying as everyone in the UK film industry is still waiting with bated breath to see how Brexit will play out (and its effect in reality on both global and domestic markets)- this latest court ruling could not have come at a better time. While it is not a return to the strength of the pre-referendum pound, it will still be well received by those buyers who might be able to get more for their money at AFM than they could have, had the pound remained at the October low of $1.15.
We certainly hope it has helped UK buyers this week.