Motion Picture Herald (Nov-Dec 1948)

RKO AND U. S. SIGN DECREE, PLANNING SEPARATE CIRCUIT FOUR MAJORS FACE COURT MONDA Y ON DIVORCEMENT At mid-week it was almost certain that there would be no consent decree for Loew's, Paramount, Twentieth Century-Fox or Warner Brothers — that attorneys for these four companies would have to bustle into the New York District Court on Foley Square Monday and do their best arguing to keep the approximately 1,400 theatres the Department of Justice wants to take away from them. With hearings on the Paramount anti-trust suit scheduled to resume Monday, only 20th-Fox, at mid-week, appeared to be still negotiating with the Department. Reports from Washington had it that James F. Byrnes, 20th-Fox counsel, had plans for further conferences with Attorney General Tom Clark — possibly for a separate consent decree. With Truman's unexpected winning of the presidential election, there will be no change in the Government's anti-trust policy. The Department of Justice's arguments for divestiture on Monday will be just as fervid as in pre-election days. Company May Buy Partner Interests in 30 Houses; Hughes to Sell Stock Washington Bureau The New York District Court will be asked Monday to enter a consent decree for RKO in the Paramount, et al, anti-trust suit. The decree will call for RKO to separate completely its production-distribution interests from its exhibition interests and for RKO to dispose of its interest in 241 theatres held jointly with independents and to either sell out its stock in 30 more jointlyheld houses or to buy out those partners. This decree was approved last Friday at an RKO board of directors meeting in Hollywood and by the Department of Justice on Monday. The decree, according to a statement from the RKO directors, "is contingent upon the stockholders' approval within 90 days of a plan of reorganization which will create two new companies, one to hold the RKO theatres and the other to hold its production and distribution assets, both owned by the existing stockholders." The two companies would each be bound by the decision of the Supreme Court handed down in the Paramount suit early last May. The distribution company would be bound by further decisions of the New York District Court affecting Columbia, Universal, and United Artists, and the exhibition company would be bound by the requirement that all future theatre purchases are to be subject to thp approval of the New York District Court. The 30 houses which RKO could buy or sell could be added to those approximately 100 RKO theatres wholly owned by the company. These would make up the new RKO circuits. Howard Hughes, who six months ago acquired a controlling 24 per cent interest in RKO from Atlas Corp., has agreed, according to the Department, to sell out his interest in either the production-distribution or exhibition end of the business within one year of entry of the decree, but minor stockholders could, and probably would, hold stock in both companies. Mr. Hughes is expected to sell his theatre company stock. RKO Directors Accept Odium's Resignation Prior to its final action on the decree last Friday, the RKO board accepted the resignation of Mr. Odium, RKO board chairman, and of Harry M. Durning and L. Boyd Hatch, all directors of Atlas. Mr. Hughes and Noah Dietrich, vice-president of the Hughes Tool Co., were elected to fill two of the vacancies. The chairmanship was not filled. The decree provides that in the event that RKO acquires the interests of their coowners in all the theatres owned or operated by the Trenton-New Brunswick Theatres Co., Trenton, N. J., RKO shall dispose of all interest in one Trenton first run. It further provides that RKO shall dispose, to independents, interests in two downtown Cincinnati houses one year from date of entry of the consent decree by the New York District Court. Signing the decree for the Government were Herbert A. Bergson, Robert L. Wright, Sigmund Tinger and George H. Davis, Jr. ; for RKO, William J. Donovan, Gordon REFUSE GOLDMAN DIVORCE PLEA The Philadelphia District Court Monday refused to order Warner Brothers and 10 other major producers and distributors to divest themselves of motion picture theatres in the Philadelphia area. Rejecting a plea of William Goldman, independent Philadelphia exhibitor, Federal District Judge William Kirkpatrick also rejected an alternative Goldman petition that the defendants be restrained from cross-licensing their product. These rulings do not in any way affect a December, 1946, decision of the court in which Judge Kirkpatrick ordered that films be distributed on a competitive bidding basis and that Mr. Goldman be awarded treble damages of $375,000. This award was upheld by the Supreme Court in a decision handed down early last May. Youngman and Ralstone I. Irvine. Mr. Irvine also signed for Mr. Hughes. In New York Tuesday, Ned E. Depinet, president, issued a statement to his employees in which he stated that RKO as a producer-distributor and the theatre company will continue their "respective operations largely as in the past." "Fortunately," he said, "these units have always operated more or less independently. We have had a picture company and a theatre company and, with few exceptions, our employees have worked either for one or the other. For that reason the separation to be undertaken will be a relatively simple one," Mr. Depinet said. The decree calls for an agreement on the part of RKO not to buy or continue to own any houses with independents. Those jointly-owned theatres, as listed by the Department of Justice, follow: Academy, New York, N. Y. ; Ace, Ozone Park, N. Y. ; Alba, Brooklyn, N. Y. ; Albany, New Brunswick, N. J.; Alden, Jamaica, N. Y. ; Alhambra, Brooklyn, N. Y. ; Ambassador, Brooklyn, N. Y. ; Apollo, jersey City, N. J. ; Astoria, Queens, N. Y. ; Bay, Bay City, Mich.; Bayside, Bayside, N. Y.; Benson, Brooklyn, N. Y.; Beverly, Brooklyn, N. Y. ; Big Rapids, Big Rapids, Mich.; Bijou, Battle Creek, Mich.; Biltmore, Brooklyn, N. Y.; Boulevard, Jackson Heights, N. Y.; Broad, Trenton, N. J.; Broadway, Astoria, Queens, N. Y.; Broadway, Haverstraw, N. Y. ; Broadway, Nyack, N. Y.; Bronxville, Bronxville, N. Y. ; Brook, Bound Brook, N. J.; Brunswick, Trenton, N. J. Caldwell, St. Joseph, Mich.; Cameo, Ossining, N. Y. ; Capitol, Brooklyn, N. Y.; Capitol, Flint, Mich.; Capitol, Jackson, Mich.; Capitol, Jersey City, N. J.; Capitol, Kalamazoo, Mich.; Capitol, Lansing, Mich.; Capitol, Owosso, Mich. ; Capitol, Portchester, N. Y. ; Capitol, Trenton, N. J. ; Carroll, Brooklyn, N. Y. ; Casino, Ozone Park, N. Y. ; Castle Hill, Bronx, N. Y.; Center, Bay City, Mich.; Center, Cadilac, Mich.; Center, Grand Rapids, Mich.; Center, Holland, Mich.; Center, Ionia, Mich.; Center, Ludington, Mich; Center Owosso, Mich.; Center, Saginaw, Mich.; Center, Willow Run, Mich.; Center, South Haven, Mich.; Claridge, Brooklyn, N. Y.; Clinton( Brooklyn, N. Y.; Colonial, Brooklyn, N. Y. ; Colonial, Holland, Mich.; Colony, Brooklyn, N. Y. ; Commodore, Brooklyn, N. Y., Congress, Brooklyn, N. Y. ; Corona, Corona, N. Y. ; Cove, Glen Cove, N. Y. ; Crescent, Astoria, Queens, N. Y. ; Cross Bay, Ozone Park, N. Y. ; Crosswell, Adrian, Mich. ; Crotona, Bronx, N. Y.; Culver, Brooklyn, N. Y. Dawn, Flint, Mich.; Delia, Flint, Mich.; Demond, {Continued on following page) MOTION PICTURE HERALD, NOVEMBER 6, 1948 13