Hollywood and Europe’s industry executives are reacting with concern over the Brexit vote to leave the EU, and what the result means for partners far and near. The implications are not yet fully parsed, although in such a globalized world, big corporations with media — and notably television — interests in the UK, Europe and the U.S. are looking at the future with a mix of shock, fear and uncertainty. A French TV producer who regularly works with the UK likens Brexit to a catastrophe, and Harvey Weinstein has called it a “disaster.”

THE STUDIOS

“All the money the studios earn will be less,” says a studio exec. Box office has already been taking hits in the UK, along with Europe and Russia, amid currency fluctuations in the past two years. A sustained decline in the pound, which fell sharply today, will pinch returns.

Considered by some as a good result out of a bad thing, on the plus side for Hollywood is the potential that the British pound remains low against the dollar — a positive for basing productions in the UK. Hollywood has increasingly brought its features to British soundstages (think Warner Bros, Disney/Marvel/LucasFilm, Universal and Fox) while television benefits from a lucrative tax credit that has seen such series as Outlander and 24 shoot in the UK.

A common refrain today is that “No one really knows yet” how this will affect the studios’ relationships with Britain and Europe. It is expected to be two years until concrete determinations are made on how those tax credits, co-production treaties and trade agreements are to be tweaked; but it could come sooner. One UK-based exec says, “That all needs to be detangled.” For the time being, people are certainly concerned. Major media companies heavily dependent on overseas markets include Fox, Time Warner, Netflix, Viacom, Discovery and Disney.

MEGA-INDIES

“If you’re a company that’s based on moving content around, anything that puts up barriers is not going to be welcomed,” says an exec. This could implement a slow-down on ordering programming while the post-Brexit recession which many are predicting may also cause “a hyper-cyclical decline in the advertising revenues of broadcasters and publishers,” says Enders Analysis in a note.

The mega-indies like FremantleMedia, Endemol Shine, and RedArrow have interests in several countries and are understood to have looked at the potential fallout from a Leave vote well ahead of yesterday’s decision. One exec says the UK is a nation of television exporters and believes that shouldn’t be overwhelmingly affected. “The practice of exporting formats and doing co-productions with Europe is a heritage. That doesn’t just stop.” Being part of the EU helped foster that business in later years and was made easier, but it did not come as a result of Britain’s position in the EU, I’m told.

QUOTAS & GLOBAL PLAYERS

Weinstein told me today that he sees the Leave vote as a “disaster,” adding, “I think there will be discrimination now against some of the product and what it means to be European product. A lot of TV stations in Europe are under quotas. When you do War And Peace, that was accepted as European. It could be very costly in the movie and TV industry in terms of content branding. European branding is very important. It’s a big deal for these young British filmmakers.”

Having Britain in the EU offers benefits to global players and their access to European markets, especially as regards the government-imposed quota system for local productions. There are established subsidiaries that are based in the UK, by which they have a way into the European single market. “They will no longer have those privileges once Brexit is completed,” says Enders Analysis’ Toby Syfret. It helps U.S. groups “that they have UK subsidiaries as long as the UK is part of the single market. It becomes more problematic to invest in (a company like 50%-Discovery-owned) All3Media in the UK once it is out of the EU,” Syfret continues. “The point is that it will take the EU out of the picture and could be fatal to the appetite of investors in funding productions.”

(Discovery said today that it “respects the decision of the UK people” and vowed to work closely with UK and EU leaders to navigate the change.)

FUNDING

“We are all a little ‘catastrophized,'” says Haut et Court’s Carole Scotta. Her company works closely with England on such series as The Last Panthers, the Sky Atlantic drama that received 1M euros from the EU’s Media Desk. That kind of coin could now be in jeopardy; the same goes for feature film funding. UK productions may no longer be able to access money that is doled out by Brussels. Scotta adds, “I don’t know what it will signify in terms of co-productions. At the same time I don’t know if they are going to show that they are still constructive despite the vote.” Brussels could decide to give Britain status within the EU for such funding, but the question becomes: Will they want to give privilege to a country that just said it no longer wanted in? Some are fearful of a tit-for-tat situation.

But Wiggin’s Film & TV Partner Charles Moore contends that UK film and TV productions are likely to retain the status of “European Works” and will be able to obtain Certificates of Origin and other certification as required by many EU distributors in order to meet EU content quota requirements. But that hinges on the UK remaining a signatory to the European Convention On Transfrontier Television, which is a Council Of Europe Convention. If they don’t qualify as “European Works,” it would have a negative impact on the value of UK film and TV productions to EU distributors, Moore says.

Moore further believes that UK tax credits “could be made even more attractive and competitive as a result of Brexit. “The UK will no longer be subject to EU State Aid rules, which means there will no longer be the need for a Cultural Points Test or a cap at 80% of the production budget.”

UPSET & PROMISES

Europe’s own major players chimed in with disappointment today, but vowed to continue investing. Bertlesmann, which owns FremantleMedia, acknowledged “with regret the British electorate’s decision.” As an international company with a strong presence in the UK, “Britain’s impending exit from the EU raises political and economic uncertainties for us all. Irrespective of the Brexit decision, the UK, as our fourth-largest market, remains very important to us.” Bertelsmann generates revenues of around 1.7B euros with 5,500 employees in the UK, “and will continue to invest in its businesses there.”

ProSiebenSat.1, owner of Red Arrow, added, “Brexit makes Europe smaller and that is a disadvantage for European companies. We have invested in British production companies because of their creative talent and the outstanding content they create. That won’t change because of Brexit. So, operationally, we foresee no immediate consequences. But of course, general conditions for investments have not improved.”