Skyrocketing costs hit UK TV industry: 'We're facing a horrible winter,' says Pact chief

With inflation reaching record highs, a looming energy crisis and rising interest rates, the whole of the UK was left in shock. But for the domestic TV industry, which was already facing a post-COVID skills shortage and industry-wide inflation caused by the streaming wars, the situation has now become critical.

"We're facing a horrible winter," said John McVey, CEO of Pact, an organization commercial representing producers. “Borrowing costs have gone up massively, operating costs as a result have all gone up, gas has gone up, heat has gone up. If you have to film on location in multiple locations in the UK and you have to transport a lot of people, they need to be fed, watered and housed."

Steve Wynne, CEO of production company Strawberry Blonde, agrees, citing bills from Higher office energy, skills shortages and freelancers raising their rates as the biggest hits to the budget. (According to the latest figures from the British Film Institute, UK production will require over 20,000 additional full-time staff by 2025). “We have publishers charging upwards of £2,000 [$2,240] a week, which we've never heard of before,” Wynne said. "People are charging fares that we have to pay, because we have no choice."

The shortage of skills behind the scenes is also reflected on screen. Paul Fleming, general secretary of UK performers' union Equity, said there was a 'labour crisis' among performers, driven by the near collapse of theater and live events during COVID, with many leaving the industry altogether. While top talent often represents the biggest spend over the line, Fleming points out that those who can command such sums are still rare in the industry, with 95% of Equity members earning less than £20,000. [$22,400] per year.< /p>

"We review virtually every deal we hold in TV and film, and the push is on the way ahead to ensure that these rates rise to a level commensurate with the cost of living and the labor crisis,” Fleming told Variety.

Juggling talent, team and steward demands, these are increasingly the producers who have to catch up lost revenue. Wynne said he's heard "horror stories" of production companies embarking on shoots knowing they were going to lose money on the project. “As indie, we feel stuck in the middle,” he explained. "Broadcasters tell us they're out of money and freelancers tell us they can't work for the rates they were working for [previously]. So it's us in the middle, I feel that we are going to be the most affected because there is no additional budget... And so we have to pay this bill."

Meanwhile, McVey said last year's Covenant census – taken before the cost-of-living crisis is only beginning to bite – already showed that company deficits on projects had quadrupled year-on-year. "Which is really worrying, because the buyer is basically saying, 'Well, we can't give you any more money, go to the market and try to collect more money to fill the void. increased by inflation,” McVey said. "And then you actually carry a debt, because that deficit, until it's recovered by the distributor or whoever advanced the money, is a debt on your books."

McVey believes the current crisis is similar to that experienced during the COVID-19 pandemic, when Health costs and safety requirements such as COVID testing and social distancing have seen the industry rally to foot the bill. "It feels a bit like a COVID moment to me, where we're not facing anything anyone could have really predicted, it's no one's fault," he explained. “And as an industry, as we have during COVID, we need to find a way through this so that we come out the other end with a strong national sector capable of producing the quality of programming that our national audiences and international await. ."

Variety contacted three of the UK's major public service broadcasters to ask what they were doing to support independents during the crunch. The BBC told Variety: "We understand the pressures in the market and will continue to take a flexible approach to program pricing to support producers and the commissioning of ambitious and distinctive programmes. for B...