It was with wry amusement that Infotainment savoured news of chancellor George Osborne’s plans to unveil a consultation on tax breaks for pricey TV dramas.
Reportedly aimed at productions that cost at least £1m to make for every hour of screen time, the measure quickly earned the soubriquet the ‘Downton Abbey break’, in honour of its most eligible beneficiary. Great, I thought: a tax break that doesn’t just serve the rich, but covers rich people from the past, and in a fictional setting. Brilliant. The institutional connections in this matter – Downton showrunner Julian, aka Lord, Fellowes is a Tory peer – didn’t help matters much either.
Still, the news also highlighted two important issues: firstly the tax benefits that managers of UK media organisations should be aware of in order to make their productions more cost effective; and secondly, the likelihood of a “me too” culture springing up across the UK media landscape, in which companies working in other areas of the sector start to demand fair treatment.
Media tax breaks have been a bone of contention for several years, mainly because they have attracted scorn from sectors that don’t enjoy the same kind of perks. In 2005, the then-chancellor Gordon Brown announced a detailed Film Tax Relief package, designed to stimulate home-grown productions and external investment in the UK film industry. The package enabled films with at least 25% of UK-related expenditure to claim back 25% on that portion of their budgets. This was reformed in 2006, allowing films with total budgets of £20m or less to claim back 100% of their qualifying expenditure.
The Osborne arrangement for TV dramas will provide for relief on similar terms to the film-industry package, at a time when UK television budgets are escalating in efforts to keep pace with US imports (see our earlier item on Mark Thompson for more on the UK/US rivalry). Lord Fellowes’s new, £3m-per-hour take on the Titanic disaster – honoured with the does-exactly-what-it-says-on-the-tin title Titanic – has been filmed partly in Hungary to keep costs down. Meanwhile, the BBC-HBO co-production Parade’s End has restaged World War I-era England in Belgium.
As an example of where the US is setting the bar, look no further than the saga over House of Cards – a remake of a 1980s BBC series that charted the rise to power of devious Tory MP Francis Urquhart. Produced by on-demand streaming service Netflix, with Kevin Spacey set to take on the Urquhart role, the US version has been budgeted at a whopping $100m for 26 episodes – and producer David Fincher is fighting Netflix for an increase.
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Not wanting to be outdone by film and TV, the video-games and newspaper industries are also asking for tax breaks. In a report last month The Independent Game Developers’ Association (TIGA) – which represents the nation’s video-game creators – made its own case for relief, arguing that it would generate “4,660 highly skilled jobs and trigger millions of pounds of investment” in the UK branch of the gaming sector. Issued to the Treasury and the Department of Culture, Media and Sport, the report had the backing of MP John Whittingdale, who pointed out: “The global games industry has grown by 23% through the global financial turmoil, and is projected to grow by over 8% per year to 2015.”
At the same time, the House of Lords Communications Committee released a report pressing for tax breaks in the newspaper trade that would help to fund investigative journalism – like filmmaking, another risk-heavy endeavour in which success is by no means a foregone conclusion. No sooner had the report emerged than it was seized upon by Carla Buzasi, editor of the Huffington Post UK, who argued that the committee’s document had completely overlooked online publications: chalk up another entry to the “me too” contest.
So, with numerous divisions of the media clamouring for tax relief, a big question is looming: whose responsibility is it to protect companies from the inherent risks of their industries – managers… or MPs?