Showmen's Trade Review (Oct-Dec 1949)

SHOWMEN'S TRADE REVIEW, November 19. 1949 13 See Warner Consent Decree Shaping; RKO to Ask for Divestiture Extension Warner Bros., and the Department of Justice seem to be moving closer toward a consent decree, usually well-informed sources in Washington, D. C, indicated this week. The sources pointed out that the Warner-Justice Department talks were continuing, indicating that neither side could be "far off as far as disagreement is concerned." RKO meanwhile was seeking a year's extension of the divestiture deadline, apparently on the grounds that it has been having difficulty with some joint owners. The Justice Department is said to be undecided on this. Week's Trust-Suit Demands Reach $18,124,000 Damages What is probably the all-time high record for damages demanded in motion picture industry anti-trust suits, was reached within a seven-day period this week when two suits alone filed in the New York federal court reached a total of $18,12 ,000. They are: 1) Suit for $9,120,000 filed by Max A. Cohen's three companies controlling the New Amsterdam Theatre against the eight majors and the RKO and Loew's circuits on the ground that the product split system used by the circuits had the practical effect of controlling what and when he booked for the New Amsterdam. 2) Suit for $9,000,000 by Metropolitan Playhouses and Skouras Theatres against RKO, seeking to compel the circuit to sell the interests it holds jointly with Metropolitan-Skouras in three New York and one New Jersey theatre. Max Cohen Sues For $9,124,000 Claiming that a product split system enforced by the RKO and Loew's circuits in New York, through alleged conspiracy with the eight major Not Dictating Admission Increases To Exhibitors, Montague Insists distributors was practically making the two circuits the arbiter of how he booked pictures for his Times Square area New Amsterdam Theatre, Max A. Cohen Thursday filed an anti-trust action in federal court for triple damages amounting to $9,124,000. Actual plaintiffs in the suit are three Cohencontrolled companies — Anco Amusement Corporation, Anco Enterprises and Anwell Amusement Corporation. Defendants are RKO and Loews theatre circuits, 20th Century-Fox, Paramount, Warner Bros., RKO, Loew's (MGM), Columbia, Universal and United Artists. A spokesman for Cohen's attorney declared that under the system, whereby RKO and Loew's theatres split product in New York, Cohen "couldn't select the pictures he wanted when he wanted them" for the New Amsterdam. This house, the spokesman explained, is not a neighborhood house but draws from all over New York due to its downtown location and for it to have to wait until either of the rival circuits booked pictures before it could get product was the basis of the suit. Formerly the Cohen house, it is said, played product after the circuits. Now it is playing day-and-date, but the system still deprives of freedom in selecting its bookings when wanted, the spokesman said. Paramount Wins Inspection Right In Brandt Suit Paramount this week apparently won a sweeping right to pre-trial examination of witnesses and inspection of all records in its $562,265 suit alleging film rental fraud against Harry Brandt, prominent New York circuit and buying combine head, as well as 122 other defendants said to be associated with Brandt. The right to inspect the records was granted by the New York State Supreme Court, which in New York is the court of first appeal and not the highest tribunal, and covers, apparently for the first time in such suits, the right to examine operating expenses. Legal circles thought that this might be because one of the methods charged by Paramount in perpetrating the alleged fraud was by exaggerating cost of operations. Suit was originally filed on Jan. 12, 1948. OSee STR, Jan. 17, 1948, P. 9) Big 3 May Ask S Years^ Time The Big 3 defendants — Warner Bros., 20th Century-Fox, Loew's (MGM) — in the Government anti-trust suit were reported ready with a proposed decree this week which would give them five years to put divorce into effect and which would provide for voluntary arbitration of intra-industry disputes. Filing of the Big 3 decree, which is largely a formality since they are fighting divorce and may appeal against divorce to the U. S. Supreme Court if they do not negotiate consent decrees, is considered more or less an action to comply with the three-judge statutory court's invitation to all parties in the suit to submit their versions of a decree. Such submitted decrees must embody a plan for divorce and divestiture, in addition to incorporating the trade practices which {Continued on Page 15) Columbia General Sales Manager A. Montague this week denied that his company was intimating to exhibitors that they must charge advanced admissions for "Jolson Sings Again" and reiterated his request that any evidence to the contrary be submitted to him by exhibitors. Montague's denial came in the face of a report made by a Theatre Owners of America committee which criticized the company's sales policies on the Jolson picture and concurred in the opinion of its counsel, Herman M. Levy, that the terms Columbia was asking for the feature were so high that they had the practical eflfect of com National Closes The National at Louisville, Ky., which made the headlines repeatedly when its operators, Fifth and Walnut Corporation claimed it could not get product and filed suit against the majors, closed this week. A spokesman for the owners declared the house had not been able to operate profitably on the product that was available. Fifth and Walnut is now asking the U. S. Supreme Court to review the adverse decision handed down against it by both a New York Federal Court and U. S. Circuit Court of Appeals. pelling exhibitors to raise their admissions. "The fact that no runs of 'Jolson Sings Again' have been observed at other than advanced admission prices is most persuasive to the belief that some policy designed to bring about such advance prices is in effect," Walter Reade, Jr., chairman of TOA's Distributor-Exhibitor Relations Committee, declared after a meeting of the committee had been held on the question of the "Jolson" rentals. Columbia's reply to this, through Attorney Lou Frohlich, was, in effect : "Nuts." "The exhibitors got the Government to get a decree that we can't fix admission prices, and the exhibitors can't fix our prices either," declared Frohlich vigorously. "We have the same privileges they have." More formally, Montague replied to the TOA protest : "We have never demanded, or have we authorized any employe of Columbia to even remotely suggest an exhibitor advance his admission price, and I vigorously deny any reports to the contrary and would appreciate any evidence available in substantiation of such reports." This was substantially the same reply Montague's office had issued to the National Allied {Continued on Page 10) Skouras Seeks To Oust RKO Metropolitan Playhouses and its subsidiarj', Skouras Theatres, this week sought a court order to compel RKO to sell them its interests in four jointly-owned New York area theatres. The court order is sought in an anti-trust suit asking triple damages amounting to $9,000,000 filed by the plaintiffs against the Radio-KeithOrpheum Corporation, RKO-Radio Pictures, Inc., and RKO Theatres. The suit involves the RKO-Skouras holdings in the Pelham and Castle Hill, in the Bronx, the Midway at Forest Hills, Long Island, and the RKO Proctor in Newark, N. J. Either Buy or Sell Under the terms of the consent decree which RKO reached with the Justice Department in the anti-trust suit, RKO may either buy full interest in the houses or may sell its interest to its partners or outsiders. The MetropolitanSkouras action arises over the allegation that RKO is refusing to sell to the plaintiffs. It seeks a court order which would not only prevent RKO from selling to anyone other than Metropolitan-Skouras but would order the defendant company to sell its interest to the plaintiffs. The basis for this request is the allegation that {Continued on Page 15)