Bloomberg News

Warner Bros. Expands U.K Ops on New Film Initiatives

June 30, 2014

Time Warner Inc. (TWX:US)’s Warner Bros. is expanding its U.K. operations, taking advantage of government subsidies and official strategies to promote the film, animation and video-game industries.

The studio plans to build three new stages, bringing its number in the U.K. to 13 by the end of the year and enabling the company to have four major features in production there at one time. Warner Bros.’ new “Tarzan” film, featuring Samuel L. Jackson, began shooting today.

Hollywood is enjoying widening subsidies at home and abroad as countries vie to attract the industry’s high-paying jobs. The government of British Prime Minister David Cameron is introducing new initiatives that include reducing the red tape for permits required for filming and a strategy to double the exports from the sector to £31 billion ($53 billion) by 2020.

“Warner Bros. has produced some of our most popular and successful films in the U.K., working with British talent,” Kevin Tsujihara, the studio’s chairman and chief executive officer, said today in a statement. The expansion “will allow us to further tap into the world-class creativity and innovation available here to continue this tradition.”

Increased Rebates

The U.K. is one of the countries that has benefited the most from incentives to entice filmmakers. Under current rules, a qualifying movie can claim a rebate of 25 percent for budgets of £20 million or less filmed in in the U.K and 20 percent of budgets in excess of that. The government wants to increase the incentive to 25 percent for all spending in the U.K. on films and is awaiting European Union approval under state aid rules.

Studios are expanding to meet demand. Last month Pinewood Shepperton PLC, the home of Europe’s biggest sound stage and where the James Bond and Star Wars franchises are filmed, was granted permission to almost double the size of its facilities.

The country has in recent years expanded its incentives to include TV production and video games. Many big-budget Hollywood movies are now made exclusively in the U.K.

“Gravity,” which was nominated this year for the best picture Oscar and won BAFTA’s award for the best British film, was made entirely in the U.K except for one scene.

This year Walt Disney Co.’s “Maleficent,” Warner Bros.’ “Edge of Tomorrow,” and Disney’s “Guardians of the Galaxy,” were all filmed exclusively in the U.K.

U.S. states are also using taxpayer-funded incentives to entice film and TV producers from Hollywood. Thirty-seven states offer film and TV credits, with payments by the top 10 totaling $1.37 billion a year, according to an April 30 report by the California Legislative Analyst’s Office.

New York has gained jobs in the industry since 2004 with annual subsidies of more than $420 million, while California has lost out. New York’s incentives are the largest, followed by Louisiana at $236 million and Georgia with $140 million.

To contact the reporter on this story: Anousha Sakoui in London at asakoui@bloomberg.net

To contact the editors responsible for this story: Anthony Palazzo at apalazzo@bloomberg.net Bruce Rule, Rob Golum


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