Motion Picture Herald (Apr-Jun 1931)

April 4. 19 3 1 MOTION PICTURE HERALD 9 WALL ST. BECOMES A PICTURE CRITIC WITH AN EAGLE-EYE ON BOX OFFICE Building a Strong Wall Around the Heavy Axe When a certain well-known secondstring organization decided many weeks ago to cut down overhead by firing 40 of Its field sales staff, an unusual piece of strategy was launched to prevent adverse criticism, to bolster morale of the remaining personnel and to halt the inevitable discussion of "bad times." Here's how it was done: Advertisements were widely circulated in the trade press appealing for scores of "good salesmen." The "rub," of course, appears within the quotes. Ironically enough, the same advertisement also asked exhibitors to "join us in this fight against unemployment." "BUY NOW! Keep these men happily employed," theatre owners were told. And all, accompanied by grand and glorious gestures, while the axe was swinging right and left to trim the payroll $4,000 weekly. Plenty of Action Slated for Annuo Meeting of Pothe Loud squawks by stockholders voicing disapproval of Pathe's sale to RKO are expected at the annual meeting of Pathe Exchange, Inc., on April 28, when the combined forces of minority holders may take further steps to push court action asking damages which the minority group claim it suffered as a result of the sale. There now is pending a $20,000,000 suit, filed by Lena Vincent, and a petition to all stockholders may gain added backers to her cause. Will J. J. Franklin Sell Out to Brother? Los Angeles — Recent decision of J. J. Franklin to quit the Hughes-Franklin circuit and launch a theatre unit of his own has set insiders wondering over the possibility of an "understanding" between "J. J." and his brother, Harold, whereby the former would acquire a bulk of theatre properties on his own and then sell out to the H-F interests, with which he has been connected since its inception last year. Financial Lords Turn Severely Critical and Place Onus for Certain Unfavorable Earnings Statennents as Much on Inferior Quality of Films as Other Causes By THE ANALYST Although the motion picture business came through the depression of 1930 in comparatively better shape than most other industries, a survey of earnings of leading film companies for that year and a checkup on estimates for the immediate future reveals that Wall Street more than ever is watching the quality of output as one of the main factors in determining future income of motion picture companies. — Moreover, a roundup of financial opinion shows that the street is proving to be a severe critic and in most instances places the onus for some recent unfavorable earnings estimates as much on inferior pictures as on other factors such as declines in theatre attendance, increases in capitalization, higher costs, etc. The consensus is that the favorable earnings records shown by leading companies in 1930 were made largely in the early part of that year when the novelty of the talking screen had not yet worn off and that if favorable comparisons with 1930 are to be made now the producers will have to toe the line in offering a consistently better product to the public. Fox Tells Mgrs. To Hove Spunk, Cease Worrying Old man fear, apparently, has been sewing the seed of discontent in the minds of certain Fox circuit managers and others who were recently promoted. The house chiefs are said to have felt they are being "put on the spot" by promotion. The home office heard about the yarns and the following order is the result : "We think it's about time that some of the men who work for the organization be told a thing or two about what is known as 'guts.' "The old gag about not knowning whether your job is good until you have read your morning mail doesn't apply to Fox Theatres Corporation. It seems strange, after so many demonstrations of the humane attitude of our new management, that this should have to be explained to anybody on the payroll. "Still, it must be explained. "Suspicious of Advancements" "Lately there have been an extraordinary number of promotions and it has been our observation that not a few of the men who have been promoted were suspicious that their advancements were due to improper motives. Some suspected that they had not made good with the men whose departments or divisions they were leaving. Others have felt that in going to new jobs they were being 'put on the spot.' Still others indicated timidity about leaving familiar surroundings and going to new ones. "We can understand from what the motion picture business has been why such suspicions have existed in this and other organizations in the past, but we can't account for them in our organization as it is conducted today. We believe that there have been sufficient demonstrations of the kindliness with which this organization has been run. We believe that it has been sufficiently demonstrated that we require manpower— man-power jvhich must be developed from our ranks. Therefore, we cannot understand the lack of mettle that some of the men who have been promoted seem to show." Theatre Attendance Better Current estimates on individual companies are divided, but most of them are on the downside. In fact, only one major unit. RKO, is expected to show as much for the first quarter this year as for the corresponding period of 1930. The "Street" is dubious or noncommital about the results to be shown by the other companies for the period, while the balance of the year, according to present opinion, will depend largely on the quality of pictures, as attendance is expected to show up better with improvement in general business. Already one of the statistical services notes that picture attendance, which has been running about 10 to 15 per cent below a year ago, shows signs of betterment and, again touching the quality angle, this service goes on to say that "the low level of purchasing power had its effect on motion picture box office receipts during a period when the quality of pictures was below normal, but with increasing optimism in general business, the public is apparently again turning to the movies for entertainment." Turning to individual companies, RKO is conceded in financial circles to be in a favorable earnings position just now. The company more than doubled its net in 1930, reporting for the year net income of $3,385,628. or $1.45 a share, against $1,669,564, or 92 cents a share in 1929, and its acquisition of Pathe and interest in "Radio City" are expected to be reflected by improved earnings. Paramount, which for 1930 reported a record net of $18,370,000, compared with $15,544,544 for 1929, is in some quarters not expected to show for the first quarter (Continued on page 41)