Last Thursday's Brexit referendum in which the U.K. electorate voted to leave the E.U. may take two years or more to come to fruition, but the entertainment industry could see some gradual effects in the near-term.  

Ahead of the Brexit vote, a list of British producers, including Barbara Broccoli and Matthew Vaughn, released a letter urging British citizens to vote 'Remain' in the interest of the creative industries. Following the vote, Michael Ryan, the chairman of the Independent Film and Television Alliance, predicted the decision to leave the E.U. would be "a major blow to the U.K. film and TV industry."

But how, exactly, will Brexit negatively impact the U.K. entertainment industry? First of all, the amount of foreign productions that film in the United Kingdom is likely to fluctuate wildly within the next few years. The U.K. is currently a popular place to film large Hollywood movies, with big-budget films such as "Avengers: Age of Ultron" and "Star Wars: The Force Awakens" opting to shoot there. In the short-term, the U.K. will likely remain a hotspot for Hollywood productions. The drop in the value of the pound following the Brexit vote means that it will be economically appealing for productions to shoot in the U.K. "Pretty much all of film financing is done in dollars," Eric Fellner, producer of such British productions as "The Theory of Everything" and "Tinker Tailor Soldier Spy," explained. "When you have a weak pound against the dollar, there is likely to be a short-term increase of film productions in Britain."

Nonetheless, in the long-term, it may be difficult to convince studios to film their productions in the U.K.. That's because the movement of labor to and from Britain may become more difficult following the departure from the E.U. As a member of that Union, the British workforce is allowed to move freely into other European countries to shoot films, and likewise, European talent can move freely into Britain.

However, after the Brexit, both film crews and film equipment may have to receive special work permits, or "carnets," in order to shoot across borders. "Carnets can be brutally difficult to operate," Fellner said. "So the issues will likely be around the workforce." Because of the increased amount of red tape, it will likely become more difficult to convince non-local productions to shoot in the U.K.

And local productions will face problems of their own due to the Brexit decision. U.K. productions will no longer be eligible for E.U. subsidies, which helped fund such British films as "The King's Speech" and recent Cannes Palme d'Or winner "I, Daniel Blake." This also means that British co-productions may become increasingly rare as well. It will be difficult to incentivize European productions to partner with the U.K. when it may complicate, rather than facilitate, funding. "Before Brexit, if a French director wanted to shoot something in England, they could get tax benefits," said John Sloss, co-founder of film company Cinetic Media. "That may no longer be the case."

And then there is the question of whether or not British productions will now be subject to taxation. British media exports can move freely between borders because of the U.K.'s status as a member of the E.U.; when the country withdraws, taxes may make that process more expensive. "We have no idea whether there are going to be taxes or tariffs," Fellner said. If the E.U. were to instate some kind of taxation on the U.K.'s exports, that would hurt British entertainment companies across the board.

Finally, it may be difficult to convince talent to enter the British entertainment industry when there is so much murkiness around its future. "Whenever there's no clarity, there is uncertainty," Fellner added. "And whenever there's uncertainty, there is fear."

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