Boxoffice (Apr-Jun 1939)

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"ULTIMATE" IN CONCESSIONS INCLUDED IN NEW TRADE PRACTICE DRAFT APPROVED BY MAJORS Copies Sent to Exhibitor Leaders and Department Of Justice Officials New York — The “ultimate” in concessions by major companies in revision of existing trade practices is contained in the final draft evolved late Thursday after extended conferences among members of the joint distributor committee and attorneys. Approved by all major distributors except United Artists, which firm has withdrawn from participation in the conferences, the draft has been mailed to exhibitor leaders who took part in previous conferences and to the department of justice. Representing, therefore, the consensus of major opinion on concessions, the draft is presented to exhibitors for adoption, rejection or, as the language of an accompanying letter indicates, further elaboration of arbitration provisions. The distributor attitude is crystallized substantially in the following comment by a distributor committee spokesman upon perfection of the draft: “The revised document contains about 80 per cent of what the exhibitor bodies asked for. That is the limit we can give now. “The arbitration plan probably has some flaws, but it represents something tangible to start with — and the corrections can come later. If there is sincerity all around, we will put this pact into effect immediately. It certainly is far better than nothing. “The majority of the points that Abram F. Myers (Allied general counsel), asked for are in the draft. Clearance, forcing of shorts, and preferred playdates are some of them.” Indications are that Myers will call a meeting of the Allied board to study the revised proposals. Distributors are hopeful Allied will approve the pact and that other exhibitor organizations will do likewise. Should Allied reject it, “individual distributors will adopt their own course toward granting relief,” in the opinion of a committee member. Under consideration in a suggestion to William F. Rodgers, committee chairman, that copies of the draft be sent to all exhibitors, regardless of organization affiliation. Meanwhile, copies have been mailed to the following: Ed Kuykendall, MPTO A president; Col. H. A. Cole, Allied president; Abram F. Myers, Allied general counsel; Lee Moffitt, president of the MPTO of Kentucky; John Rugar, president of the Intermountain Theatres Ass’n; W. F. Crockett, president of the MPTO of Virginia; Albert A. Galston, president of the ITO of S. Calif, and Arizona; Harry Brandt, president of the ITOA of New York City; Charles R. Gil (Continued on page 26) BOXOFFICE :: April 1, 1939 E Text of uTrade Practice Code — (Revision of March 30, 1939) — PREAMBLE The signatories hereto, being distributors, exhibitors and organized groups of exhibitors of motion pictures, hereby severally adopt the following as a code of fair practice, hereby severally binding themselves to the observance of the principles, policies and practices set forth herein in the licensing, distribution and exhibition of motion pictures in continental United States. I. Exclusion Privilege (1) Exclusion as a matter of right. Whenever an exhibitor shall have entered into a license agreement for all of the feature motion pictures (“features”) offered1 at any one time by a distributor for a run in any situation2, such exhibitor shall have the right to exclude therefrom, without payment of the license fee therefor, not to exceed twenty per cent of the total number of features contracted for, if the average of the license fees for all features contracted for shall not exceed $100.00 per picture; fifteen per cent, if such average is in excess of $100.00 and not in excess of $250,000; and ten per cent, if such average is in excess of $250.00 In determining the number of features that may be excluded, fractions of onehalf or more shall be counted as one and fractions of less than one-half shall not be counted. In computing the average of the license fees for all features contracted for the license fees of features based in whole or in part on a percentage of the gross receipts of exhibition shall be included at the average of the license fees of all the distributor’s features of the preceding motion picture season which were exhibited upon a percentage basis for the same run in such situation. If none of the distributor’s features was so exhibited during the preceding season, then such average of license fees shall be agreed upon by the distributor and the exhibitor and included in the license agreement. For the purpose of determining the rights of exclusion of an exhibitor hereunder, so-called “Westerns” (as such term is understood in the motion picture industry),3 reissues and foreigns (except such as may have been produced outside of the United States in the English language by an American producer or distributor or subsidiary thereof) shall not be included in the number of features of lAn exhibitor contracting1 for a portion of distributor’s features shall be deemed to have contracted for “all of the feature motion pictures offered” if the distributor shall have offered only such portion to exhibitor. 2An exhibitor shall be deemed to have contracted “for a run in any situation” if he contracts for the right to exhibit each feature for a particular run either at a specified theatre or upon an “or” basis, i. e., at one of two or more specified theatres. 30nly “Westerns” which are not of the usual character and type of, and are inexpensively produced as compared with, the distributor’s general line of features for the particular season in question. fered or contracted for as above provided, but shall be deemed to have been offered in separate groups and, if contracted for, the features in each such group shall be subject to exclusion on the basis set forth above and, if included with other features in the same license agreement, shall be separately listed. The right of an exhibitor to exercise his exclusion privilege herein provided for shall be subject to the following terms and conditions : (a) a first run exhibitor shall give the distributor written notice with respect to each feature he elects to exclude within fourteen days after the mailing by distributor of the first notice of availability thereof; any other exhibitor shall give such notice within fourteen days after the close of the first exhibition of such feature in the city or town in which his theatre is located or the mailing of the notice of availability thereof, whichever is later, provided that if such feature is not exhibited on a prior run in such city or town and notice of availability shall have been previously mailed to such exhibitor, the distributor shall mail to such exhibitor a new notice of availability thereof and notice of exhibitor’s election to exclude such feature shall be given within fourteen days after the mailing of such new notice; (b) the exhibitor shall not, at the time of giving such written notice, be in material default under the license agreement4; (c) exclusions shall be made proportionately among the several price brackets provided for in the license agreement5; but any number of exclusions to which an exhibitor is entitled may be made from the lowest price bracket; (d) if any exhibitor, having the right to do so, fails to exclude one or more features from higher brackets, he shall, for each such feature, have the right to exclude one feature from the lowest bracket; provided, however, that if at the time there are no unplayed available features in the lowest bracket, he may exclude a feature from the next lowest bracket. Upon the exclusion of any feature under this Section (1), the license therefor (Continued on page 26) 4Without limiting the generality of the term “material default,” an exhibitor shall in any event be deemed so to be in material default if, at the time of giving notice of exclusion, he has failed to pay the license fee due for any feature theretofore exhibited by him or if, at such time, he has failed reasonably to perform the license agreement with respect to the playing of features theretofore made available to him thereunder. 5ExampIe: If the agreement licenses forty-eight features, of which eight are in the highest bracket, twelve are in the next to highest bracket, sixteen in the next to lowest bracket, and the remaining twelve in the lowest bracket, and, if the exhibitor has the right to exclude ten per cent, (five features), then not more than one feature may be eliminated from the highest bracket, not more than one from the next to highest bracket, not more than two from the next to lowest bracket, and the remaining one feature from the lowest bracket; or all five or any lesser number may be eliminated from the lowest bracket. 25