Boxoffice (Apr-Jun 1939)

A Letter to Allied New York — The following letter, over the signature of W. F. Rodgers for the distributors joint committee, went to Col. H. A. Cole, president of Allied, with a copy of the new trade practice draft: “Please refer to my letter of December 1, 1938, under cover of which we sent you a memorandum prepared by us embodying the trade practice proposals resulting from the conferences between the distributors and various exhibitor groups representing most of the theatre operators throughout the country. That memorandum as revised by us has been the basis of further conferences, and your counsel was good enough to send our counsel a further revision which was discussed at conferences between our respective counsel. As a result we have prepared a new revised memorandum which we enclose herewith. “Our original memorandum called attention to the fact that various matters in connection with arbitration and arbitration machinery had not been fully discussed. In a subsequent conference when we discussed a revision of this memorandum, we handed you a proposed basis which we had prepared upon which arbitration machinery might be set up. Your counsel’s revision contained counter suggestions as to arbitration, which were discussed with our counsel. However, we have not yet completed a revision of the provisions with respect to arbitration machinery, and for that reason we again enclose the proposed basis for arbitration which we previously handed you. It is obvious that this is not complete and further elaboration will be necessary in the light of discussions and of your counsel’s suggestions, but we believe that the statements of principle contained in it and in the revised memorandum enclosed herewith will furnish the foundation for the arbitration machinery desired. “Since our discussions we have been notified by United Artists Corporation that it has withdrawn from participation in the conferences. “Following the same course as before, we are sending a copy of this letter and its enclosures to the Department of Justice in accordance with assurances of counsel that the Department would be kept informed of the results of our industry conferences. “If the accompanying revised memorandum substantially expresses your understanding of these proposals, we renew our previous suggestion that a joint conference be held with the Department of Justice at the earliest possible date for the purpose of obtaimng its approval of these proposals and of considering methods of putting them into effect.” Text of Draft (Continued from page 25) shall terminate and all rights thereto shall revert to the distributor and such exclusion shall be charged against the number of exclusions to which the exhibitor may be entitled, whether or not a new license agreement for the exhibition of such feature is subsequently entered into by such exhibitor. All disputes growing out of the exercise or attempted exercise by an exhibitor of the exclusion privilege provided for in this Section (1) shall be subject to arbitration. (2) Exclusion for cause. An exhibitor shall have the right, in addition to the exclusion privilege provided for in Section (1) above, to exclude from any license agreement any feature which may be locally offensive on moral, religious or racial grounds, provided he shall give the distributor written notice, not later than fourteen days after the conclusion of its first exhibition in the exchange territory in which the exhibitor is served, of his desire to exclude such feature, specifying the reasons therefor. Upon the exclusion of any feature under this provision, the license therefor shall terminate and all rights thereto shall revert to the distributor. Any dispute as to whether or not a feature is in fact so locally offensive shall be subject to arbitration. The arbitrators shall not, in deciding such question, take into consideration the decision of any arbitrators with respect to the same feature except only that they may do so if such decision concerns the same feature in the same local area in which exhibitor’s theatre is located. II. Trade Announcement Each distributor shall make a general trade announcement at or prior to the beginning of each of its seasons, containing such information as it may be practicable to give of all features completed or actually in production then intended for release during such season, it being understood that the completion of such features actually in production and the making of such other features which it is intended to produce are subject to the hazards and uncertainties of the business and they may not be completed or produced, as planned. III. Public Demand for Exceptional Feature If in any town or in any city, or section of a metropolitan city, an exhibitor shall request of a distributor the license for a run in any situation6 of a feature, having such an exceptional and outstanding appeal as to create a natural and spontaneous national public demand and for which there is a spontaneous and natural public demand in the town, city or section of the metropolitan city in which his theatre (s) is located, and which would not be shown in such town, city or section unless licensed for exhibition to exhibitor, and the distributor offers to exhibitor a greater number of features than exhibitor because his playing time will be so absorbed by previous commitments for features can without altering his operating policy reasonably exhibit in such situation, the distributor will then offer to such exhibitor such lesser number of features, including such requested feature, as may be agreed upon or, lacking such agreement, such number as may be determined by arbitration to be the maximum number of features which can reasonably be exhibited by exhibitor in such situation; provided that the distributor shall have 6“For a run in any situation” as defined in Section (1) of Article I, footnote 2. the right at any time before the arbitrators shall have made their award to offer or license all or any of its features to any other exhibitor. An exhibitor who has been a customer of a distributor and who has refused to contract for such distributor’s features for the situation involved shall have no right to attempt to use this Article to compel such distributor to license to him from time to time its outstanding feaures. Any dispute as to whether such requested feature is an “Exceptional Feature” as above described or as to the number of features which can reasonably be exhibited by exhibitor in such situation or as to whether exhibitor is so attempting to use this Article, shall be submitted to arbitration by exhibitor within fourteen days after the refusal by distributor to license to exhibitor the number of features requested by the exhibitor. IV. Preferred Playing Time (1) Flat rentals and guarantees. A distributor will not exercise the right to designate features for preferred playing (Continued on page 27) Concessions Limit Seen in Pact (Continued from page 25) mour, president of the Theatre Owners & Managers of the Rocky Mountain Region, and to Leo. F. Wolcott, president of the Allied ITO of Iowa and Nebraska. How BOXOFFICE Reported Growth of a Trade Pact New York — How Boxoffice reported transitions from the first proposals by the distributors’ negotiating committee (issue of December 10, 1938), to revised edition following general rejection by exhibitor bodies and also the initial arbitration proposals by majors (January 28, 1939), to Allied’s draft of a revision of the revised proposals submitted by distributors (February 18, 1939) to Trade Practice Code, Revision of March 30, 1939, (current issue). This is the key to those regular readers of Boxoffice who desire to make comparisons. At a glance, it is apparent changes have been made in the titles of various clauses, comparing the first distributor draft with the final one just made public. For instance, where the original reference to clause one was “Cancellation Privileges,” it is now known as “Exclusive Privilege.” Whereas clause three was formerly referred to as “Exhibitor’s Limited Playing Time,” it is now called “Public Demand for Exceptional Feature.” Number five, formerly known as “Runs and Existing Customers,” has been altered to “Some Run Available.” It is noted that the latest draft makes no reference to “Non-Theatrical Competition,” formerly clause nine, and “Boxoffice Statements,” originally clause 14. In their place, distributors have substituted a provision for “Regular Customer” and “Term,” the first being clause six and the latter clause 16 in the new draft. “Coercing Contracts,” which replaced “Acquiring Theatres” as clause 13 in distributor draft remains unchanged in character. 23 BOXOFFICE :: April 1, 1939