Motion Picture Herald (Oct-Dec 1956)

MOTION PICTURE HERALD MARTIN QUIGLEY, Editor-in-Chief and Publisher Vol. 205, No. I MARTIN QUIGLEY, JR., Editor October 6, 1956 Dollars for Refurbishing THE decision of the Small Business Administration to make conventional theatres eligible for U.S. Government loans is welcome news. It is important not only for exhibitors but also for producers and distributors that any local barriers to remodeling and reequipping of theatres be eliminated in this fashion. Now monies are available, even up to $250,000, for reasonable loans either directly from the Small Business Administration or with the joint financing of a bank and the SBA. It is anticipated that most theatre loan applications will be for relatively small amounts. The loans may run for a maximum of 10 years and the interest rate is six per cent on direct SBA loans. On those in which a bank participates the bank sets the length of the loan and the interest but those maximums prevail. In order to be eligible for a SBA loan a theatre must prove that it makes a substantial contribution to the economy of its community. Statements from spokesmen of the SBA have made it clear that they believe most theatres will qualify without difficulty under that test. Theatres employ local people and they bring into business areas customers for local merchants. The location of a drive-in, outside the community and often away from business districts, is one of the factors that continues to make drive-in theatres ineligible for SBA loans. IT is impossible to know how many theatres recently have sought loans for equipping and refurbishing and have had the requests rejected by local banks. Financial writers have reported that money is “tight” and bank interest rates high. It is good for the industry that theatres are now placed on a par with other small businesses so far as access to loans is concerned. This action of the SBA, which resulted from the prodding of the Senate Small Business Committee, should stimulate exhibitors into reexamining their physical plants. In order to compete in today’s leisure time market the theatre must be an attractive and comfortable place. It must also have excellent equipment. This includes seats, screen, projection, sound and everything else necessary for picture enjoyment. Producers and distributors have a substantial stake in this matter. If pictures are not exhibited under the best circumstances possible in each community, grosses are bound to suffer and the necessary increase in attendance will be difficult to achieve. Therefore, it is strongly recommended that distributors take into account amortization of remodeling, reequipping and redecorating expenses in setting rental deals. In the long run it is the producer-distributor who has most to gain by helping the theatres keep up with the times. At present in some places multi-million dollar films are being exhibited under deplorable conditions. And it is not always the exhibitor who is to blame. Both producer-distributors and exhibitors share the responsibility. Where film rentals are so high that theatres are deteriorating physically, everyone is a loser. ■ ■ ■ Decree Revision IT IS inevitable that the cries which have arisen suggesting amendments of the consent decrees in the Paramount Case will increase in intensity. Many do not agree that the standards of industry practice established by those decrees were the best ones for the welfare of all branches of the industry. But whether those standards were the correct ones or not now is largely an academic issue. Conditions have altered substantially since the decrees were signed. Revision, sooner or later, is in the best interest of both exhibitors and producer-distributors. By revision is not meant attempts of the Department of Justice to make provisions ever stricter. It borders on the ridiculous for the Department of Justice to be considering seeking amendment barring feature film production by the American Broadcasting-Paramount Theatres company. Exhibitors have long looked for additional sources of features. The revisions which should be studied include the IATSE resolution unanimously passed at its convention that producers be allowed to have an interest in exhibition; the elimination of the ban on block booking and the encouragement of practices which have decreased clearances and multiplied simultaneous runs to the economic disadvantage of the exhibitor and to the inconvenience of the public. ■ ■ ■ Rank Operating Statistics THE Rank Organization’s 1956 annual report is one of the most interesting and most attractively presented publications issued by a film company on either side of the Atlantic. It gives statistics not only on the various components of the Rank Organization but also on the British industry as a whole. Some of the charts in the 90-page booklet are of great value to exhibitors everywhere. Many will like to compare their increases in theatre operating costs with those of the Rank group: With 1939 as 100 on the scale, in 1956 costs rose to a record 310 — up 24 points in a year. The comparison of the split in box office receipts between 1939 and 1956 is revealing: the entertainment tax is up from 2s. 8d. to 6s. 4d; the producer-distributor’s share is down from 6s7d. to 4s. 8d. and the exhibitor’s share dropped from 10s. 9d. to 8s. 6d. This shows conclusively the importance of admission tax relief. Another group illustrates that the cost of building a theatre in 1939 was the equivalent of $64 a seat and now is $294. The cost of furnishing a theatre has risen from $11 a seat in 1939 to $42. — Martin Quigley, Jr.