Creative industries in the North East have been dealt a blow with three companies being wound up.
Despite major success in the past, Dene Films, Ipso Facto Films and Qurios Entertainment have all now ceased trading.
The director of award-winning Dene Films, the Newcastle-based production company which had been producing for nearly 22 years, said the decision to pull the plug had been a hard one but the right one.
Steve Salam said that despite its record of success, his company had been struggling for some time in the face of overwhelming debt.
The 52-year-old, who was born in North Shields, had built up Dene Films into one of our creative industry’s shining lights, earning a Bafta nomination and making award-winning BBC programmes along the way.
Just this year it celebrated another CBBC commission, the documentary I Am Ethan about a deaf boy who sets up a rock band.
But the company became a victim of its own success when in 2010 it took out a £650,000 loan to help it grow, just as the double-dip recession hit, and it now goes into liquidation with debts of almost half a million.
Mr Salam said: “The situation boils down to when we took the financial investment about three years ago. The recession kicked in at almost the same time and the business went backwards for about a year.
“Rather than growing we saw a third of our turnover wiped out, with many of our regular clients either disappearing or just cutting their budgets completely.”
These included One NorthEast and Clydesdale Bank: “£800,000 of annual work just disappeared. It would be hard for any business to cope with that and with the need to repay investment that was designed for growth, we were caught between a rock and a hard place.
“We then went into growth again and the business grew £2m turnover in two years in succession but with the substantial legacy of finance we needed to repay we were in a weakened cash position.
“This period last year was our biggest ever quarter with massive projects but we were still not doing quite enough to keep ourselves afloat.”
Newcastle’s Ipso Facto Films folded after 10 years of trading and Qurios Entertainment, in spite of TV credits including Spooks and Tracy Beaker Returns, also saw work dry up and folded. This 21-year-old animation and visual effects studio was based at Dene’s Westmorland Road offices and the companies had been set to fully integrate under the Dene name.
The most recent casualty means the loss of 14 jobs. Three years ago Dene had 32 staff and just in August the company group was employing 25 people.
Mr Salam said the company was “limping along” as the situation deteriorated until they were advised to pull the plug.
“It was a hard thing to do but the right thing to do,” he said, “otherwise we’d probably be making things a lot worse for everyone, including ourselves.”
During its profitable years when it built up a national profile with thousands of commercials, TV programmes and corporate films, the company made its first ever 3D film, the £350,000 Eagle’s Eye: Edge of Empire, shot at Hadrian’s Wall and commissioned by The Vindolanda Trust.
With CGI and 3D effects, which saw the team work with experts from Shepperton Studios, it won the silver award at the US International Film and Video Festival in 2011, putting it within the top three productions of its kind in the world.
Two TV programmes it also submitted - Last Cast, about the mothballing of the Redcar steel plant on Teesside, and My Life: Stammer School, which was also Bafta-nominated that year - both won a gold award. Mr Salam remains committed to the North East and is confident of “building something from the ashes” with a new company called Future and Co. Films Ltd.
He is already working on adverts for SCS and the NHS and has projects planned in the Gulf and China.
“I’m really pleased I’ve managed to spend my whole career in the region. I started out in 1982 in Turner’s film production and I’ve managed to keep myself busy since then.
“People will be sorry to see a company like Dene disappear as it was a big part of the local scene.”
He added: “It’s been a struggle for a long time for all of the companies who work in the sector and I do worry about the regional film economy.
On social media, Mr Salam was praised for having “worked his socks off for the region” and fans called the news a loss for the North East. Others feared more news of closures to come.
Recent years saw something of a boom for TV and film production in the region, largely tempted here by development agency Northern Film & Media’s creative content fund which has since come to an end.
John Tulip, managing director of NFM which made the decision to continue in the region despite the Government’s replacement of the regional screen agency network with a new body called Creative England, said it’s a hard time for creative industry but he feels there is the potential for growth.
“In the past we had support mechanisms able to fund companies in the public sector and now those are not there.
“Most of our funding streams have disappeared following the abolition of One NorthEast and the UK Film Council and we are not in a position to offer as much support to companies as we would like.”
Mentoring and establishing connections has taken the place of substantial cash investments.
“I think creative industries nationally is a significant growth area and I want the region to reflect that but there will always be casualties.”
Citing locally-made programmes such as The Paradise, George Gently and Vera, he said: “It’s not all doom and gloom.
“A couple of years ago we had a whole series of feature films coming to the region but the funding has dried up so they go somewhere else - to where the funding is.
“But we are hopeful that in the next round of European funding we can persuade the powers that be that setting up a fund will be a good idea.
“There is potential in the industry in the region.”