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Introduction Cynulliad Cenedlaethol Cymru / National Assembly for Wales Pwyllgor Diwylliant, y Gymraeg a Chyfathrebu / The Culture, Welsh Language and Communications Committee Cynyrchiadau Ffilm a Theledu Mawr yng Nghymru / Film and Major TV Production in Wales CWLC(5) FILMTV16 Ymateb gan Bad Wolf / Evidence from Bad Wolf Introduction Bad Wolf is a unique and ambitious high-end production company based in Wales. Founded by Jane Tranter and Julie Gardner, its purpose is to create drama with global reach, to establish a sustainable centre of excellence and to build worldwide momentum for the film and television industry in Wales. Having provided the creative spark to bring Dr Who, Torchwood, Sherlock, Merlin and Casualty to Wales, the team has already helped to secure production in Wales of Da Vinci’s Demons, The Bastard Executioner, Will and The Collection. Having won an Emmy for The Night Of, Bad Wolf are now working on Sky One’s new fantasy series A Discovery of Witches and the BBC adaptation of Phillip Pullman’s His Dark Materials. The first series of A Discovery of Witches is currently in post-production after 6 months filming in Wolf Studio Wales and on location. The production has spent over half its budget in Wales, hired 160 local freelancers, and contracted 193 local businesses. Five young people were given paid traineeships on the production, and 36 young people received work experience, four of whom have now been employed. We are in preparation for potentially two further series, and are committed to providing long-term employment for our trainees. Bad Wolf has a staff of around 22 full time at the moment, with most based in Cardiff, but also with team members in London and Los Angeles. It currently has up to 15 productions in development with broadcasters. Over the last three years, Bad Wolf has created 245 jobs, secured £13m in private investment into Wales, and secured a future production budgets of £134m. Wolf Studios Wales is a new, world-class 125,000 sq ft production space in Cardiff. Developed by Bad Wolf and with support from the Welsh Government. The new studio provides an anchor production facility for high-end film and TV productions in Wales, and allows the founders of Bad Wolf to offer full-service production as part of their offer, as well as providing space available for other companies to bring their productions to Wales. Bad Wolf has invested £3.9 million to develop the studio, with 97% spent in Wales, supporting 50 local jobs during the construction phase. It is structurally unique in Wales, providing a maximum eave height of 17.5 metres, an essential requirement for some big budget productions. Bad Wolf has committed to pass on 55% of the profits of Wolf Studios Wales to good causes, including to support Screen Alliance Wales and the sponsorship of arts and drama organisations. Screen Alliance Wales is a stand-alone philanthropic company created by Bad Wolf as the company founders recognised that Wales needs an organisation to educate, train and promote crew and infrastructure throughout Wales. Screen Alliance Wales will be the gateway between industry and its workforce, it will grow and promote the talent, crew and services of the TV Industry in Wales and through its on-line portal will become the industry standard in promoting the complete supply chain from one single place. Screen Alliance Wales is created by the industry for the industry. Screen Alliance Wales has created an education and training scheme to engage emerging talent, and to grow, nurture and build skills across the creative industries a proportion of the production income at Wolf Studios Wales helps to train the Welsh workforce in the skills the industry needs, and to build a sustainable legacy for the industry in Wales. This year, Bad Wolf will invest £300K in cash and in kind to Screen Alliance Wales. Currently Screen Alliance Wales is not publicly funded, but discussions are underway with the Welsh Government on funding training for the industry in the future. Screen Alliance Wales runs a classroom and regular school tours of Wolf Studios Wales and has strategic partnerships with Universities, Further Education establishments and local schools including Willows High School and Moorland Primary School. Welsh Government Support for the Industry The Film and TV Industry is currently growing much faster than other service industries. In 2016, a record £1.6bn was spent on film production in the UK, and inward investment of TV productions reached £500m. This is set to rise as global broadcasters such as Netflix, HBO and Amazon continue to support a growth in high-end TV production around the World. Research by the UK Government in 2016 showed that the creative industry sector had the highest growth rate of all sectors in the previous year, increasing in GVA by 7.6%, or twice the rate of GVA growth of the UK economy as a whole. Average salaries in the creative sector reached £38,000 in 2017, and recent research also showed that salaries in the creative industries have seen a higher growth rate than other sectors, including those sectors where the Welsh Government has also invested significant resource. The Welsh Government has recognised that Wales will need to work hard in a ferociously competitive industry to benefit from this growth. The scale of the industry, the entrepreneurial nature, and the investment needed is recognised by the Welsh Government as an economic driver, and must continue to be considered as such, and not simply through the perspective of supporting our creative arts and cultural heritage. The Welsh Government has for some time recognised the benefit of bringing Film and TV production to Wales. It is, however, a hugely competitive global industry. Broadcasters know that they can offer to take their productions anywhere, and national and regional governments offer a range of incentives which are built into production budgets. Each of the UK home nations provides a different level of incentive, but as the industry is truly international, broadcasters can choose to compare these against the incentives provided by most countries around the World. Companies can bid for funding for specific films or TV productions, which can help support the industry in the short term, but might not provide sustainable, long term economic activity as broadcasters take their next production elsewhere. The founders of Bad Wolf, therefore, worked with the Welsh Government to develop plans to enhance Wales’ long-term competitiveness within the global industry, not simply based on production cost incentives, but on appropriate facilities and available skills. The substantive benefit of the initial public investment in Bad Wolf was to establish an anchor, a production company and facilities of significant scale and world-class ambition and track record, which could help build a sustainable industry in Wales. Although there is some risk associated with public investment, we believe the innovative funding decision reduces the level of risk substantially, and also provides the opportunity to create the potential for tremendous value to the Welsh economy. An ambitious attitude is greatly valued within the creative industries, and we must try and minimise the impact of those who argue that public investment should always come with zero risk. Whilst providing grants and loans to industries such as manufacturing can be linked to the number of jobs created, the specialist nature of Film and TV production needs to take into account production spend, as the industry does not necessarily provide permanent, full time roles, but supports many individuals who work as specialist freelance technicians and creatives, and through the very specific supply chain developed to support the industry. Economic benefit is therefore considered as a return on spend, with different countries developing a different level of expectation. Welsh Government estimates are that the current economic multiplier effect is 1 to 8, with £8 spent in Wales for every £1 spent on supporting the film and TV industry. The Welsh Government has now set a relatively high level of expected return on spend of 1 to 12 (as compared to 1 to 4 in Northern Ireland and 1 to 6 in Scotland). Achieving this higher multiplier will require, more local production, a stronger supply chain and skills base to encourage a greater proportion of the spend to be retained in Wales. The Welsh Government therefore supported the establishment of Bad Wolf with an initial loan of £4m. The investment criteria are linked both to the profit of the company but also to the potential for a 12 to 1 return on spend, so the loan can be transferred to a grant if there is a significant wider economic benefit, and the grant will then have been entirely de-risked. The structure of the agreement is to incentivise a long-term uplift in GVA through the development of a home-grown, globally-competitive industry. It is creative way of providing hybrid funding to manage risk which is shared with the company and rather than simply providing funding for individual productions who come for a short time, the investment is in developing the studio and the training and skills required. We believe that it was a strategically important investment which is now meeting growing demand for high-quality studio space, and is competing against increasing supply in other parts of the UK. It will still be important to attract the right productions to help establish the industry, otherwise they will simply go elsewhere. A consideration for the Welsh Government is to balance the funding available for inward investment so that broadcasters are drawn to Wales, with the funding available to help build sustainable skills and production facilities and the support available for anchor facilities like Wolf Studios Wales.
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