Showmen's Trade Review (Oct-Dec 1948)

SHOWMEN'S TRADE REVIEW, October 9, 1948 II Gov't Will Ask For Divorce (Continued from Page 5) theatre or from acquiring any other theatres without court approval. 3) Restrained from making agreements which would prevent an exhibitor from acquiring a theatre and from voting stock or in any way controlling theatres which the defendants have been ordered to dispose. 4) Ordered to divest themselves of theatres held in partnership with partners who are not defendants in the suit. (Illustration: Paramount's partnership with Texas Interstate, the latter of which is not a defendant, in contradistinction to a situation say where Paramount and Loew's, both of which are defendants, have interests in theatres.) The party to whom the theatre is sold must not be involved in the suit, or be affiliated with any of the defendants in the suit. And Furthermore, the Government asks that the Big 5 be : 1) Ordered to furnish within one year from the date of judgment a plan whereby they would divorce their exhibition interest from distribution and production. This plan is to be carried out in five years. 2) Ordered to furnish within one year from judgment date, plans for divestiture of theatres not previously covered by proposals. Cross Licensing The Government also makes two requests on cross-licensing which would prevent any one of the defendants from licensing more than 50 per cent of the product he releases within a six-month period to theatres in which another defendant has an interest. These proposals apply to locations where the defendants enjoy "closed towns" and where they control the firstruns. The cross-licensing ban would be for a five-year period. Other phases of the Government proposals, which also affect the Little 3 — Universal, United Artists, Columbia — as well as the Big 5 are : 1) A ban against franchises excepting where they are made to enable an independent exhibitor to compete with an affiliated exhibitor. 2) A ban against discriminatory trade practices — kickbacks, moveovers, extended runs, roadshows, etc. The Little 3 will be on hand against a remote contingency that the statutory court might come up with some new sales proposals to replace the competitive bidding which the U. S. Supreme Court knocked out when it reviewed the case. During this appeal to the Supreme Court, United Artists lost in its effort to legalize roadshows. Universal won a limited franchise privilege when the high court reversed the lower court's ban against this form of selling. Columbia won the right to sell pictures in blocks provided it did not condition the sale of one picture upon the purchase of another. Hence little action is expected from the Little 3's corner and it shapes up as a divorcedivestiture fight in which the Big 5 will slug it out. , Wonder A few observers late this week were wondering whether the Government proposals are as fatal as the Big 5 think. Part of this wonder arose from the report that some of the Big 5 Now It's a Bank The Federal Reserve Board this week set Oct. 12 as the date for public hearings on anti-trust charges against the Transamerica Corporation (Giannini interests) giant financial organization which has been prominent in him financing. The charges are based on the claim that Transamerica headed by Amadeo P. Giannini, through its Bank of America National Trust ana Savings Association, had achieved a "credit monopoly" through placing directors on the boards of tne bank in its huge chain. The chain has 516 branches in California and other western states and resources estimated at better than $5,000,000,000. The charges are the first such filed by the Federal Keserve Board under powers assigned it by the anti-trust laws and were reported to have been under consideration tor two»years. had discussed a consent decree this week in Washington. No official word was available on the subject but Paramount and 2Uth-.box were said to be less opposed to divorcing exhibition from distribution, provided they would not have to break up their theatre chains. Warner Bros, was said to be undecided with Loew's and RKO fighting for their theatres. Not in Sight At the moment no consent decree seemed in sight. 1 he persistence with which reports on this subject recur is probably based on Washington talk that the Government is sticking to divorce and divestiture only because Robert L. Wright, special assistant to the Attorney General, who has led the Government fight the whole way, is adamant on the subject. Others in the Department might favor a solution which would require less legal combat. Observers were also speculating on a new clause in the Government proposals which legal sources said was merely routine. The clause reads : "At any time after three years from the entry of .this judgment any defendant which has submitted a plan pursuant to paragraph (1) of Section iv (regarding divorce of exhibition from distribution) of this judgment may petition the court to suspend the effective date of such plan or the taking of any steps to effectuate it upon the ground that actual divestiture of theatre interests during such period has made such plan unnecessary, in whole or in part, to provide adequate competition in the distribution and exhibition of films. Upon the filing, in good faith, of such a petition, an appropriate order suspending execution of the plan shall issue as of course and be in effect until the court shall have heard and determined the merits of the petition. The court may thereafter enter an order revoking, modifying, or affirming said plan, in whole or in part, or substituting such other relief as may be warranted by its findings as to the competitive conditions then prevailing in the industry." 1,415 Theatres The questions of divorce, divestiture and cross-licensing which will affect approximately 1,415 theatres are returned to the statutory court by virtue of the U. S. Supreme Court ruling in its appeal. When the case is heard on these phases it will be before Circuit Court of Appeals Judge Augustus N. Hand, Federal Judge Henry L. Goddard and Federal Judge Alfred Coxe, the last of whom replaces Federal Judge John Bright, who died while the case was being appealed. Judge Ponders Ascap Objection (Continued from Page 5) Milton Weisman, attorney for the exhibitor plaintiffs. Weisman also opposed unsuccessfully efforts of" Songwriter Milton Agar and Publisher Chappel, Inc., to intervene in the suit because their interests were involved. The judge permitted their intervention. In his argument against some findings of fact and conclusion at law which Judge Leibell had reached, Ascap's Patterson asked that the language be clarified so that the judge's rule applied only to public performing rights on filmsynchronized music and hot to the entire field of Ascap's licensing — such as radio stations, night clubs, dance halls, etc. Civil Action He pointed to the fact that the situation before the court was a civil action and not one inaugurated under the anti-trust laws by the Attorney General on behalf of the public and questioned because of this whether the court had the right to order Ascap to divest itself of the public performance rights on film synchronized music and whether its members could be ordered to issue their public performance rights only to producers. "We have," Patterson declared, "been unable to find any private case where divestiture or partial dissolution has been ordered," adding : that if divestiture were necessary it should come as a request from the Attorney General. To Cause Confusion Patterson further pointed out that through composer-publisher contracts, the copyright was frequently vested in the publisher and should the court order public performance rights to go to the copyright holder, it would cause untold litigation until it was determined who actually should have these rights. Judge Leibell commented on the view that a private case was not entitled to the same broad scope of relief as a public case brought by the Attorney General. At one time he interrupted Weisman's argument to remark: "I am concerned with this : Has the court gone too far in ordering divestiture? The court wants to be sure first that it is right." The Nomand Appeal Under Advisement The U. S. Circuit Court of Appeals in Boston Tuesday reserved decision on an appeal by Exhibitor A. B. Momand to set aside a ruling by a federal court which deprived him of damages in an anti-trust suit against the majors. The judge had reversed a jury finding for the plaintiff. RTQMR Elects Woman For the first time in history, an exhibitors' association has elected a woman as president, Cleveland reports. Last week the Akron Theatre Owners and Managers Association elected Mrs. Helen Smith as president to succeed Max Federhar who refused to take the office again. Mrs. Smith, owner of the Majestic, in her new office follows in the footsteps of her husband, the late Weary Smith, who was active in all industry and civic affairs. At the election meeting Roy L. Russell, owner of the Russell Theatre, Millersburg, spoke on the state tax situation as it affects theatres and on Caravan.