Independent Exhibitors Film Bulletin (1948)

News tBnd Opinian (Continued from Pasr ri ) making franchise deals with affiliated theatres, discriminatory licensing and those findings of the Supreme' Court which could be enforced. Although it was obviously not the purpose of the high court ruling that tiie defandants' make further theatre acquisitions, this is now possible since the Supreme Court lifted the District Court ban on additional theatre buying, ordering the Court to ascertain which theatres had been acquired in violation of the Sherman Act. Indications that the hearings next fall would be another protracted series were apparent from some of the defandant's counsels arguments. Paramount attorney Whitney North Seymour said that the only way to establish legality of theatre holdings would be to examine each situation individually; John W. Davis, of Loew's, claimed that it was the Government's job to submit a list of joint theatre ownerships in an attempt to establish of legality. Most pessimistic of all was Judge Hand, who c implained : '"Tiiis looks like it will take longer than our natural lives," and expressed doubt t!iat anotlier judge could be persuaded to sit on the case if it lives up to its promise to last as long as it appears — "even if he's young,"' he added. Wright, however, felt that the hearings w'ould not go on interminably, since the Government doesn't propose to offer witnesses nor does it "visualize the necessity of ruling on new factual issues." Boosts Arbitration Judge Hand disputed Wrigiit's contention that an injunction is the solution to the interim conduct of the defendants. He leaned rather toward continuation of the arbitration svstem. But Wright argued, ''We must start afresh." pointing to evidence tending to show discrimination despite the arbitration system. Warner counsel Judge Joseph y[. Proskauer took issue with the Government's attitude that it had sustained a victory in the Supreme Court. He felt tiiat the hearings might be prejudiced if conducted in an atmosphere "that we sustained a blow from the Supreme Court and Mr. Wright is here solely to reap the harvest-" The case must be decided on merit of facts as oresented in the District Court, he declared. Former Secretary of State James F. Byrnes represented 20th Century-Fox ; Louis Frohlich, Columbia and Thomas Turner Cooke, Universal. Balaban Sees Divestiture, Plans Capital Adjustment Bowing to the inevitable. Paramount president Barney Balaban prepared the company stockholders for the shock of divestiture. .Addressing the company's first stockholders meeting since the recent Supreme Court decision, Balaban told questioning shareholders that the decision "will force transformations within the industry" in which Paramount will be involved. "I do not know what the outcome will be," he added, "but I believe that our theatre interests will be reduced with a corresponding reduction of our ultimate earning power." The answer to divestiture, financially, Balaban suggested, would be a shrinking of Paramount's capital structure adaptable "to the assets and earning power that are left." In reply to queries, he said that earning power would not decrease in proportion to the loss of theatre revenues, since the company, in all probability, would receive a higher return in film rentals. In this, he affirmed the belief of 20th Century Fox prcxy Spyros P. Skouras. who, a couple of weeks ago, ripped of¥ the horrible mask which had been affixed to divestiture. Theatre Values High Balaban also feels tliat the company would PARAMOUNT'S BALABAN Preparing for Divestiture realize a much higher return on theatres which they might be required to sell than the original purchase price, because of inflated real estate values. He told the stockholders that Paramount would retain as many of their theatres as possible and where theatres must be sold, would attempt to hold on to the leases. Company balance sheets do not reveal the "true" value of Paramount theatre holdings, he added, because they are listed at the original 1932-35 "bankruptcy level." Referring to the company's 1947. profits, second higliest in Paramount's history (1946 was tups), Balaban blamed the drop from '46 on "the forbidding twins" — higher costs and diminished volume of business. Theatre earnings, he said, "have held up much better" than production-distribution income, principally because costs in the latter division were proportionally higher. High-Cost Inventory He stressed the importance of both inventory ar^d costs on the company's financial condition, n(.ting that pictures currpntly in release were produced at high cost. However, a film company "must have inventory which is adequate to ensure an even flow of product." Every effort to control cost without damaging quality is being made, he told the stockholders. As for the foreign situation, Balaban termed the British attitude "so narrow" and use of frozen funds in Britain "so hedg'ed and restricted" that the company cannot count on this source as a means of "bolstering our dollar resources." He charged that the British government had not acted in good faith with the establishment of the 45 per cent quota. E-L'S YOUNGSTEIN PR a Job for Specialists Let Public Relations Men Do The PR Job — Youngstein Public relations is the province of advertising and publicity men. The reason why the motion picture industry's public relations is "one of the worst butchered jobs in history" is the refusal of the industry leaders to utilize "the brains and talents of the men and women who, o:i a day-to-day working basis, really make the public relations of our industry." Max E. Youngstein, Eagle Lion vice-president in charge of advertising, was addressing the .Associated ^lotion Picture .Advertisers on tiie occasion of his induction into the presidency last Thursday. In a hard-hitting speech. Youngstein blamed the advertising-publicity people, too for allowing the industry's toppers to follow the line of reasoning : "When a picture is a success, it is because it is a great picture : when it is a failure, it is because the campaign stinks The new AMP.A president pledged the manpower of the organization "on the basis of a day-to-day job all year around" to cooperate with the Johnston office and with all exhibitor groups to promote an improvement in public lelations. Majors, WB Circuit Malce First Payment To Goldman Eight words and eight figures — "Pav to the order of William Goldman exactly $472,581.14" — closed the first phase of William Goldman's anti-trust action against the eight majors and the W'arner Bros, theatre circuit. The check received by the Philadelphia independent theatreman was broken down as follows: $375,000 triple damages: S32.,397.54 accrued interest: $65,183.60 counsel fees. William .A. Gray is the attorney for Goldman. Still pending is an "$8,400,000 treble damages suit, based directh on the first action, which charged withholding of first-run product by the majors from Goldman's Erlanger Theatre from 1940 to 1942. The pending suit seeks compensation for the j-ears 1942-46. There was a report last week that the defendants were making overtures for a settlement of the whopping' $8 million case, but inquiry at the Goldman office brought the reply : "We're not talking to anyone about a settlement." Hearings on this suit are slated to start in October before L^. S. District Judge Kirkpatrick. 25% All-Dualiers MPAA Survey Shows — One-quarter of the nation's theatres showonly double features. — Three-quarters of New York's theatres are exclusively dual billers. — .A little over one-third of the country's theatres have a single feature policy. — -These were some of the facts gleand from a survey conducted by the Research Department of the Motion Picture Ass'n of America. The figures were determined from replies to questionnaires sent throughout the country in its national theatre survey last April. Other double feature statistics: — 36.2 per cent show combination single and dual bills. — New York, New Haven, Los Angeles and Detroit lead in theatres showing double fea JUNE 21, 1948 7