Thursday, 11 November 2021
Ceisteanna ar Sonraíodh Uain Dóibh - Priority Questions
105. To ask the Minister for Culture, Heritage and the Gaeltacht her views on the recent sale of a studio (details supplied) to a large real estate corporation particularly given that the State had only recently disposed of its share of the studios and that the studios have received large amounts of public funding over many years; her further views on whether it is now time to take the studios into public ownership and investigate the circumstances of the sale; and if she will make a statement on the matter. [55228/21]
In the dead of August, a time when shady deals are often done, Ardmore Studios was sold to an American capital investment firm called Hackman Capital Partners and Square Mile Capital, an American real estate firm. This is the former national film studios set up in 1958 with State assistance. It was the National Film Studios of Ireland in the 1970s and it has now been handed over to a real estate investment firm. Is that not a form of cultural treason and privatisation that is absolutely indefensible?
I note the Deputy's question, as submitted, was to make my views known on the recent sale of a studio to a large real estate corporation, particularly given that the State had only recently disposed of its share of the studios and that the studios have received large amounts of public funding over many years and my further views on whether it is time to take the studios into public ownership.
I understand that the sale of this studio is to the world leader in studio infrastructure and as such, this development will inject further essential investment into Ireland's network of studio infrastructure. It is a positive indication of the increasing sophistication of the development of the screen sector in recent years and a vote of confidence in the future of Ireland’s audiovisual industry. The inward investment will assist in establishing Ireland as a primary location for strategic investment in film and TV drama. I understand that the studio will shortly see an expansion of its studio and support spaces with an additional 21,000 sq. ft. of sound stages and 21,000 sq. ft. of support space added.
This sale was conducted between two private sector entities. The grounds for any investigation into the circumstances of the sale are not immediately apparent. In any case, queries about the conduct of the sale would be a matter for the Minister for Enterprise, Trade and Employment.
The Government’s ambition as stated in the audiovisual action plan is to establish Ireland as a global hub for the production of film, TV drama and animation. Ireland competes internationally to attract inward productions that brings valuable investment to Ireland and this company with its global reach will assist the growth of our audiovisual industry. This development will underpin that ambition.
With the growth in streaming services, the demand for high-end TV series is almost limitless. The audiovisual industry is transforming at an exponential rate and I would not favour taking studio infrastructure into State ownership. The circumstances of the sale is a private matter for the studio’s commercial owners.
The studio is and was, before its sale, in full commercial ownership and the State has no stake in ownership. It did not receive public funding in the past decade. From an EU perspective, studios are subject to state-aid rules and any state intervention would require EU approval, which would not ordinarily be forthcoming.
The Government recognises the very significant success of our audiovisual industry in recent years. This success has been underpinned by the Government’s investment in Screen Ireland, the agency responsible for the development of the screen industry.
The studio provides world-class production facilities for both indigenous and incoming productions alike. This sale has the potential to bring new investment which will allow ongoing expansion and secure the future of this iconic studio.
That is quite an extraordinary response from the Minister. In the beginning it was referred to as "a studio". This studio was set up with the assistance of Seán Lemass in 1958. It then became the National Film Studios of Ireland in the 1970s. It was where "My Left Foot" and "The Spy Who Came in from the Cold" were filmed. I could go through the list of classic films. This is part of Irish cultural heritage and history. I should also mention Troy Studios. Is the Minister joking in suggesting that public money did not go into it? I believe that Troy got €9 million or €10 million from Limerick County Council, which extraordinarily ends up in private ownership.
Section 481 tax relief to film producers has probably come to €2 billion to €3 billion in recent years with about a €250 million in Screen Ireland grants and the State owns nothing. IDA Ireland sold off its share for an undisclosed price in 2018 and then it was flipped to an American company in a deal rumoured to be worth about €80 million to €90 million. Somebody has made a lot of money here and we used to own this studio.
Film studios are privately owned commercial entities, of which there are a number in Ireland with several new studios in various stages of development and planning. There is no rationale for public intervention in the provision of film studios as the private sector is doing so effectively. There is no evidence that the public sector would be more successful than the private sector in running a film studio. Taking one film studio into public ownership would be seen as anti-competitive by other film studio owners.
Public funding of film studios is a state-aid matter and the agreement of the European Commission is not likely to be forthcoming if we were to attempt to take this studio into public ownership. There is a well-known case, involving Ciudad de la Luz film studio in Alicante in Spain. In 2012 the European Commission ruled that public subsidies of €260 million had to be repaid to the regional government as the subsidies violated European competition law and the studio closed as a result.
What the EU says is countries are supposed to create with state aid to the film industry a permanent pool of skills and labour. Virtually nobody has a job in the Irish film industry. They go from film to film, as the producers keep saying. In cases before the Workplace Relations Commission, WRC, at the moment, film producers have come in and said to people who worked on those film productions funded by public money, "You are not my employee and you never were." That is what is going on.
Every film production is funded with section 481 tax relief and with grants from Screen Ireland. The people are paying - this is the people's money - but the money ends up in the hands of a small number of film producers. IDA Ireland sold off the bit of film infrastructure that it had. It had a one third share in it. We put money into it and into Troy Studios, which now end up in the hands of an American real estate firm. It is cultural treason and it is shocking. The EU requires us to build up companies of scale for state aid and a permanent pool of workers. We have neither but we pumped out billions of euro and got nothing for it.
I can tell the Deputy what the new investor will bring. As a long-term substantial investor in Ireland's creative sector, it has pledged to support job-train initiatives to ensure that the local workforce grows to meet the increasing demands of domestic and international content producers. It has already pledged a substantial financial commitment towards such job programmes and is looking to partner with stakeholders including Screen Skills Ireland. Its global change endowment has committed more than €10 million to date and focuses primarily on screen-sector employment opportunities for disadvantaged and under-represented communities whether dealing with gender diversity or regionalisation. In the press release announcing the sale, Joe Devine, the chairman of both Troy and Ardmore studios, said on behalf of the shareholders in both Troy and Ardmore that when they were approached, they realised that this investment could really transform-----