Edinburgh International Film Festival goes into administration

Edinburgh International Film Festival, the Filmhouse Cinema and Café Bar and Belmont Filmhouse in Aberdeen have, sadly, gone into administration, victim to escalating costs and uncertainty over future funding.

The Edinburgh International Film Festival is the world’s oldest continually running festival, and the announcement comes after it recently celebrated its 75th anniversary. 102 staff have lost their jobs as a result of the closures, the First Minister of Scotland, Nicola Sturgeon telling MSPs she was “hugely concerned” by the news.

The trustees of Centre for the Moving Image, the parent charity which runs Filmhouse Cinema and Café Bar in Edinburgh, Edinburgh International Film Festival and Belmont Filmhouse in Aberdeen, have appointed Tom MacLennan and Chad Griffin of FRP Advisory as Joint Administrators.

The Centre for the Moving Image was established in 2010 with a mission to be at the forefront of the development of a vibrant and successful film industry and culture across Scotland and beyond. CMI works across Scotland, the UK and internationally, seeking to increase the range and quality of opportunities for people to be inspired by and engage with film and the moving image.

In a statement yesterday, the Board revealed the charity is facing the perfect storm of sharply rising costs, in particular energy costs, alongside reduced trade due to the ongoing impacts of the pandemic and the cost of living crisis.

“The combination and scale of these challenges is unprecedented and means that there was no option but to take immediate action.”

Filmhouse Cinema and Café Bar in Edinburgh, Edinburgh International Film Festival and Belmont Filmhouse will all cease trading immediately and FRP Advisory have been appointed Administrators to all entities in the Group. The Administrators will work with Creative Scotland, City of Edinburgh Council and Aberdeen City Council in assessing what options there are for the future of the individual elements of the charity’s work and supporting staff through the process.”

One reason for the decision is the rising cost of energy. Even with the recently announced energy price cap for businesses, CMI’s energy costs are rising by approximately £200k over the next 12 months. The price cap is also only in place for six months and so planning beyond March 2023 is highly uncertain.

Payroll Costs, too, have risen. As a proud accredited Real Living Wage employer CMI is facing an increase of 10.1% in payroll costs over the next 12 months, at a time when its public funding has been standstill or reducing for over eight years – and had been reducing in real terms value throughout that period. The more recent steep rise in inflationary costs reduces the real terms value even further.

Additionally the CMI’s funders and the Scottish Government have indicated that the outlook beyond March 2023 for public funding is highly uncertain, given the other pressures that they have, making planning and beyond that point almost impossible.

Scottish Government Response

At First Minister’s Questions in the Scottish Parliament yesterday, Nicola Sturgeon commented: “This news is of huge concern and I know many people in Edinburgh and Aberdeen will be profoundly upset about it.

“These are really important cultural organisations and all us want to see them, if at all possible, go from strength to strength.

“The Scottish Government will consider whether there is any support we can bring to bear. We recognise the importance of these organisations and will do everything possible to support them at this difficult time.”

Rising costs add to a “perfect storm” of problems

Other reasons for the decision include rising inflation, currently running at between 10% and 30% for goods and services.

“There is no way of addressing this without passing on the cost increases to customers,” CMI note, “but at a time when the cost of living crisis is beginning to hit more and more people this would make coming to the cinema less affordable for more people.

Cinema admissions at Filmhouse and Belmont Filmhouse have been running at approximately 50% of pre pandemic levels.

“Whilst this was sustainable in the short term with the emergency government funds, it is not sustainable in the medium term. More generally the global cinema exhibition sector continues to struggle post pandemic, with Cineworld being the most high profile example of the challenges the sector is facing.

Customer behaviour has also changed. surveys show that only 57% of cinema audiences have come back to the cinema since the pandemic, with older audiences less likely to have returned.

“The rise of streaming platforms has led to people having greater choice of what to watch at home, and has led to people getting out of the habit of coming to the cinema. The cost of living crisis is affecting people’s spending decisions. And audiences, when they do come out show preferences for special experiential events and escapism.”

The CMI is also concerned that the prospect of further spikes and waves of Covid and seasonal flu in the coming months will affect admissions and booking patterns; meanwhile some audiences are still uncertain/resistant about coming into indoor public spaces.

Hope for the future?

Despite the sad news, there is some hope the Festival will return in some form.

“There are undoubtedly serious questions to be asked about the CMI’s seemingly sudden collapse,” notes Brian Ferguson, in an article for The Scotsman, “especially given its annual funding is more than £1.5 million a year and it received a further £1.3m in emergency Covid support.

“But the much bigger questions are over what happens to these two vitally important cinemas now – and how the EIFF can be revived in meaningful form.

“There has to be some grounds for optimism that a way forward will be found for them all, given their loyal and devoted followings scattered around the world.

“But it seems highly unlikely they will be the only cultural institutions which require saving over the next few months.”

The Centre for the Moving Image is online at cmi-scotland.co.uk

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