Brexit is coming. Not until 2019, under current estimates, but journalistic tradition dictates that we try to predict in advance what it might mean when it does. Apparently, it is too late to stop it now.
Brexit is good for the news media only in the extremely limited sense that it is an extraordinary "story", and a running one with plenty of "what ifs". Ultimately, the media ranks among the many industries to find themselves mired by Brexit uncertainty and upheaval, and for the broadcasting business, in particular, the idea that the UK might leave the single market is a shark-jumping event.
The flurry of new titles for journalists with “Brexit” in them points to how big this is all going to be, for everyone. But to date, the most concrete impact of the referendum result on the media itself has been evident in the unexpected slowdown in advertising revenues in 2016. British broadcaster ITV crystallised the mood in October by announcing plans to cut 120 job and slash £25 million from its cost base due to “political and economic uncertainty”. Topping its list of concerns was Brexit.
Ireland has been pulled into Britain's shadow on this front, with the media sector here afflicted by a tightening of the purse-strings at those big brand advertisers that decide their Irish marketing budgets out of London. Indeed, RTÉ started to feel the chill of UK advertisers' caution even before the June vote took place.
Mixed views
The advertising industry, entering 2017 with mixed views on the ongoing influence of Brexit on business, has been caught in the torment of having to forecast its future around the specifics-free, promise-avoiding, oft-repeated slogans of Theresa May’s government.
Will the UK’s preferred style of departure from the EU be hard, soft, “clean”, “red, white and blue” or, as the latest headlines suggest, rock-hard? Today, the advertising industry and its clients will be searching for meaning in May’s big Brexit speech along with everybody else.
Broadcasting, however, is one of the sectors where there may be a potential plus for Ireland, amid the many minuses of Brexit. This is because the UK is currently used as a base for broadcasting services that are actually targeting other jurisdictions in the EU. But if the UK leaves the EU, another member state might just have to step up.
It is thanks to the existence of the EU, specifically the Television Without Frontiers directive agreed in 1989, that London has grown into a major hub for broadcasters. Media giants of US origin, such as Disney and Discovery, use licences from British regulator Ofcom for services that are broadcast across Europe, because a licence in one member state is all a broadcaster needs to be carried in another.
So for example, some channels aimed at the Swedish market – and broadcasting exclusively in the Swedish language – are licensed by Ofcom. The advantage to those channels is that they can circumvent Swedish advertising regulations they dislike.
The possibility that Ireland could become a post-Brexit base for cross-border broadcasters is one that the Broadcasting Authority of Ireland is keen to explore. It could create a much expanded licensing regime here as well as an additional source of employment.
For Irish broadcasters, Brexit may also have the positive side effect of upsetting the opt-out channels. These are the long list of UK channels that sell advertising in the Irish market and collectively add up to a weighty competitive force. The opt-out channels do not currently need an Irish licence for the pleasure of being a thorn in the side of RTÉ and TV3. But when the UK leaves the EU, that is likely to change.
Large workforces
And then there are TV3-owner Liberty Global, Vodafone and Sky, all pan-European but UK-headquartered companies that happen to have large workforces and customer bases in Ireland.
Of these, only Vodafone has given a clear public signal that it will consider moving its headquarters out of the UK as a result of Brexit, with the company warning in the immediate wake of the referendum result that it is rather keen on the principle of freedom of movement of people, capital and goods, thanks very much.
Anything could happen with Sky, the current subject of a controversial takeover bid by US-based 21st Century Fox. For US media companies, including Rupert Murdoch’s Fox, the post-Brexit weakness in sterling has had the joyful impact of making UK-based acquisition targets that bit cheaper, so that’s 1-0 to Rupert.
But beyond this dent in the price tag, it’s hard to imagine the ultra-hard “Wrexit” scenario being anything other than an administrative headache for a European media multinational like Sky, or any company that benefits from a single legal framework covering all of their biggest markets.
That brings us to Liberty Global, which operates in 12 European countries and was so concerned about Brexit before the referendum that it asked its shareholders to approve a donation of up to £700,000 to the “Remain” campaign, which they overwhelmingly did.
It won’t be the only media company counting the cost as the UK, in all its muddled thinking, prepares to reverse out of the EU into some less-than-splendid isolation.
