Broadcasting Telecasting (Oct-Dec 1962)

Final curtain falls on block booking U.S. SUPREME COURT UPHOLDS ORDER BANNING FILM SALES DEVICE Broadcasters now have a green light to choose among feature films offered for tv showing. The U. S. Supreme Court last week unanimously ruled that six distributors of pre1948 films for tv violated the Sherman Act when they forced tv stations to take packages containing films they didn't want. The court not only prohibited block booking; it added more stringent provisions to a lower court's proposed judgment to prevent the practice. The decision, announced Monday, was notable in three other respects: It was the first written by freshman Justice Arthur J. Goldberg; it was the first decision of the court's new term, and it came only 20 days after the case was argued (Broadcasting, Oct. 22). Supreme Court decisions usually come three or more months after argument. Last week's ruling brings to a close a government antitrust suit against six feature film movie distributors, brought in 1957. That suit resulted in a guilty verdict by federal Judge Archie O. Dawson of the U. S. District Court in New York in 1961. He found the defendants had violated the antitrust laws. Judge Dawson proposed not only to forbid block booking and tie-in practices, but also to require distributors to put a price on individual films. The movie distributors appealed that verdict as well as some of the provi growth of Archer Productions, producers of radio and television programs and commercials, now owned by Mr. Ferguson and with which Mr. Heller was formerly associated. The two firms will operate as separate entities. Besides producing radio and tv commercials for advertisers and agencies, the new firm will offer its programming services to stations direct as a package. (Programming aids, comedy and promotion materials, where needed, and disc jockey and personality talent on request). It will also create an image type of station-community identification similar to those now being serviced by the firm to more than 35 outlets. On order only, they are from five seconds to IV2 minutes in length and consist of from a small jazz combo to huge orchestra. Mr. Heller was program director of Golden West Stations (KMPC Hollywood, KSFO San Francisco, KEX Portland, KVI Seattle) before organizing his new firm which is being retained by the stations on a consultant basis. Mr. Ferguson was an orchestrator for name singers. sions of the judgment. The government also appealed the judgment, holding it was not strong enough. The distributors affected: Loew's Inc. (MGM features), Associated Artists Productions Inc. (Warner Bros.), C&C Super Corp. (RKO), National Telefilm Assoc. (20th Century-Fox), Screen Gems Inc. (Columbia) and United Artists Corp. (independent productions). Horrible Example ■ In discussing the illegal contracts, Justice Goldberg illustrated the practice by citing the experience of WTOP-TV Washington, D. C. WTOP-TV paid $118,800 for 99 AAP features, but had to take some "dogs" to get some good films. "To get 'Treasure of the Sierra Madre,' 'Casablanca,' 'Johnny Belinda,' 'Sergeant York' and 'The Man Who Came to Dinner,' " Justice Goldberg said, "WTOP also had to take such films as 'Nancy Drew, Troubleshooter,' 'Tugboat Annie Sails Again,' 'Kid Nightingale,' 'Gorilla Man' and 'Tear Gas Squad.' " Because the films are all copyrighted, Justice Goldberg said, "the requisite economic power is presumed." He thus answered an argument that since the films were only a small part of the tv stations' programming, the seller's dominance of the market must be shown before a tie-in practice can be ruled Screen Gems net up, though gross is down The net income of Screen Gems Inc. for the fiscal year ended June 30 amounted to a record high of $3,466,294 ($1.37 a share) compared with $2,665,371 ($1.05 a share) for the previous fiscal year, it was announced last week by A. Schneider, president. The record income was despite a decline in gross to $52,188,900 for $55,821,052 in fiscal 1961. The company's consolidated statement showed that in the 1962 fiscal year, Columbia Pictures Corp. and affiliated companies were paid $5,961,698, while in the 1961 fiscal year Columbia was paid $10,328,401. Columbia Pictures holds 89% of Screen Gems stock. Jerome Hyams, executive vice president and general manager of Screen Gems, noted that the outlook for the 1963 fiscal year is promising. He said contracts for film programs to be delivered in fiscal 1963 amount to $25.1 million, 15% higher than at the end of the previous year. In addition, Mr. illegal in such cases. "Moreover, there can be no question in this case," Justice Goldberg said, "of the adverse effects on free competition resulting from appellants' illegal block booking contracts. Television stations forced by appellants to take unwanted films were denied access to films marketed by other distributors who, in turn, where foreclosed from selling the stations." Nor can there be any question as to the substantiality of the commerce involved. The 25 contracts found to have been illegally block booked involved payments to appellants ranging from $60,800 in the case of Screen Gems to over $2.5 million in the case of Associated Artists. A substantial portion of the licensing fees represented the cost of the inferior films which the stations were required to accept. "These anticompetitive consequences are an apt illustration of the reasons underlying our recognition that the mere presence of competing substitutes for the tying product, here taking the form of other programming material as well as other feature films, is insufficient to destroy the legal, and indeed the economic, distinctiveness of the copyrighted product. ..." Paramount Decree ■ Answering the argument that the 1948 Paramount case (which held block booking in theatrical exhibition to be illegal) does not apply Hyams said, SG has a record number of 534 half-hours and 132 hour programs for re-run release. Screen Gems owns WAPA-TV San Juan, P. R., and through WAPA-TV holds one-third interest in WOLE-TV Aguadilla, P. R. Screen Gems bought the San Juan properties last April for $1.5 million. The company also is buying KCPX-AM-FM-TV Salt Lake City from Columbia Pictures for approximately $2.5 million. Columbia Pictures bought the Salt Lake City stations in 1959 for $3.1 million. Screen Gems also owns the Cellomatic Corp. (audio-visual products) and is associated with a local group in seeking a tv license for Sydney, Australia. In a notice of the annual stockholders meeting to be held Nov. 27 in New York, the following aggregate renumeration of officers was listed: A. Schneider, president, $52,000; Leo Jaffe, chairman of finance committee and first vice president, $30,083.17; Jerome Hyams, executive vice president and general manager, $52,000; and the following vice presidents — William Do^ zier, $54,960; John H. Mitchell, $55, €2 (PROGRAMMING) BROADCASTING, November 12, 1962