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Warner: UK tax credit won’t affect US drama

The UK president of Warner Bros. has claimed the Hollywood studio will not relocate US series to Britain simply to utilise the new high-end drama tax credit system.

Warner Bros and its studio counterparts such as Disney have come under criticism from UK drama producers over their role in the development of the UK drama tax credit, which came into force this month. It was claimed the studios worked with the UK government to make the legislation favour US producers.

However, Berger, a keen advocate of the new system, told delegates at the PEVE Entertainment 2013 confab Warner Bros. would not relocate US series to the UK simply to take advantage.

Under the scheme, productions of more than £1 million (US$1.53 million) per episode will quality for a tax break on up to 20% of its ‘core spend’. Most UK drama hours are valued at just £700,000-800,000, meaning many smaller producers could miss out.

On the other hand, most US studio dramas – and increasingly cable series – far exceed that limit.

Berger said Warner spent more than £1 million per hour on virtually every high-end series it made, meaning it was illogical to assume it would move productions “just for a tax credit”. “We don’t do that for the film side, either,” he added.

However, he admitted “when you’re going to roll the dice and spend tens of millions on a TV show you’ve got to work out the best place to make it… (and) if it’s a show that would be sensible to be made here, then I think we would do that”.

Last year Warner launched a new £100 million film and television studio complex just outside London.

Berger, who oversees Warner Bros UK TV operations said the credit was more likely to aid its London-based production group Shed Media. “Shed clearly will be actively looking for those opportunities because we make drama and hopefully we will make shows that will qualify and will be helped by the subsidy,” he added.

Elsewhere in the keynote, Berger pointed Kevin Tsujihara recent appointment as Warner Bros. Entertainment CEO as an example of changing consumer habits.

“I think that Kevin becoming the CEO of Warner Brothers certainly points to the situation in Hollywood today where we’re facing the digital future – the changing behaviour patterns of consumption.”

The surprise appointment of Tsujihara, who was previously CEO of Warner Bros. Home Entertainment and has no studio or production experience, has been met with a mixed reaction from the content community, many of who favoured Warner Bros. TV Group topper Bruce Rosenblum or Warner Bros. Pictures Group president Jeff Robinov for the top job.

Tsujihara was previously responsible for home video, digital distribution, videogames, anti-piracy and emerging technology operations.