Broadcasters Warn They May Abandon U.K. Base With No Brexit Deal

  • Dashed hopes for quick plan jeopardize transmission rights
  • Group: Restructuring decisions loom ‘without more clarity’

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International broadcasters using the U.K. as a European base warned they may be forced to shift operations elsewhere because of Brexit, after the government dashed hopes for a quick deal that would bridge the way to a permanent divorce from the European Union.

“Our members need certainty well before the cliff edge in 2019,” said Adam Minns, executive director of the Commercial Broadcasters Association, which represents international media networks such as Discovery Communications Inc. and Walt Disney Co. in the U.K. “Without more clarity companies will have to make decisions about restructuring their European operations next year.”

The industry has been pressing for answers because broadcasters use U.K. licenses that allow them to transmit to other EU countries. It’s an open question whether that arrangement will be in effect after the split. A similar issue is already forcing banks to shift operations. The head of telecommunications regulator Ofcom warned this month that broadcasters were putting plans for new investment in the U.K. on hold.

“The consensus in the audio-visual world is pretty grim,” said Paul Herbert, a media lawyer at Goodman Derrick, speaking at an industry event Tuesday in London. “We really need a deal. A no-deal situation is going to be at best very messy.”

The Netherlands has emerged as a likely candidate for shifted operations if it becomes necessary, while Ireland, Estonia and Belgium are also in the running. Discovery, Time Warner Inc.’s Turner International and Sweden’s Modern Times Group AB are weighing whether to shift operations to preserve access to the EU, Bloomberg reported in August.

The outlook dimmed on Monday, when Prime Minister Theresa May backed away from a business-friendly effort to quickly establish a transition period during which trade rules would be frozen while final terms of the U.K.’s departure from the bloc were worked out. Any transition period would only be sealed as part of a wider Brexit deal, she said, falling into line with a position the EU has long maintained.

A broader accord isn’t expected to be finalized until shortly before exit day in March 2019.

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