Boxoffice (Apr-Jun 1939)

ASK ARBITRATION, RE-ALLOCATIONS AIRING, OTHERWISE N. Y. INDT'TS APPROVE DRAFT ITOA Takes Categorical Stand Against Quartet Of "Obstacles" New York — The ITOA feels the trade practice draft is “a step in the right direction,” but withholds formal ratification until four “essential issues” are ironed out, the organization states in The Independent, its official publication. Three of the issues revolve about arbitration; the fourth seeks insertion of a clause dealing with re-allocation of pictures. A satisfactory restatement of these “matters” in the proposed code “is the sine qua non of participation by the ITOA in the code,” the article states. A literal translation of the Latin goes: “without which not, something absolutely necessary.” This is the ITOA’s position on the first point which it desires revised. “The code provides for arbitration in specific instances as enumerated, and likewise provides in article 14, section 1, that any claim by either party to a license agreement that the other party has breached any provision thereof shall be subject to arbitration. “However,” it adds, “article five, subdivision A, and article 14, subdivision four, specifically exempt from arbitration the question of license fees or others terms or conditions upon which motion pictures may be licensed by a distributor to an exhibitor. We suggest that unless the phrase ‘other terms or conditions’ is clarified a great deal of confusion will arise as to exactly what is the subject of arbitration.” Arbitration Without Exception The organization, on this point, takes the position it is “unqualifiedly opposed to any code which does not make every dispute of whatsoever nature or description the subject of arbitration. Failing that, the code must be greatly amplified ... To permit exceptions would only continue the present tendency to resort to the courts. We see no reason for any exceptions.” Holding “that in principle, the machinery of arbitration is satisfactory with one exception,” the ITOA goes on to its second point, herein described. “While exhibitor associations are to choose the general panel, the code provides that the neutral panel is to be mutually agreed upon by the distributors and exhibitor interests. This means that in the choice of the all-important neutral panel, affiliated exhibitors will have an equal voice with independent exhibitors. We believe it cannot be contradicted that the choice of a neutral panel by distributor representatives is a sufficient protection to affiliated distributors and that only independent exhibitors should have a voice in the choice of the neutral panel. Only in this manner can the neutral panel fairly represent the industry on behalf of exhibitors.” Point three seeks to revise the clause dealing with liquidated damages. It goes: “Article 14, subdivision one, provides that, in the event of a breach of the contract by a distributor, arbitrators are restricted to awarding as damages the amount fixed as liquidated damages in the license contract. This merely perpetuates the present unfair provision of the standard contract,” the article states. “When an exhibitor breaches a contract, the damages of the distributor can usually, if not in all cases, be specifically and adequately determined. On the other hand, a breach by a distributor, especially when arising from the failure of the distributor to deliver a picture, results in damages far and above the amount of the license fee. The arbitrators should be permitted to compensate an exhibitor adequately for any breach by a distributor since the liquidated damages as fixed in the standard contracts unreasonably limit such damages.” The fourth point which the ITOA wants “overcome” deals with re-allocations. “We feel,” says the article, “that the code Detroit — Affiliated circuit men here decline to comment on the trade practice code, feeling statements should come from New York. Thus far, the pact meets with favorable comment from leading exhibitors questioned, but there is a general disinclination to decline comment for publication on the ground more time is necessary to appraise the provisions in detail. However, Ray Moon, general manager of Mutual Theatres, local cooperative booking group, thinks this: “The pact looks like a sincere effort in the direction of solving some of the industry’s problems. It remains to be seen, of course, whether it will do it or not. “From preliminary study, it looks like a very big improvement over the existing situation. It looks particularly good on the cancellation business, and the score charge, which has been one of the exhibitors biggest worries for years. “Divorce of short subjects and newsreels from the features in selling, if they really mean it, is perhaps the biggest benefit for the exhibitor in the whole pact. “I think exhibitors will welcome the whole pact idea wholeheartedly.” The pact gets a cold reception from David M. Idzal, managing director of the Fox. He thinks: “The principal difficulty in arriving at A Rigid Maintenance of Film Classifications Is a Demand should prohibit a distributor from reallocating pictures for any reason such as re-designating a B picture or, as sometimes happened in the past, even a C picture as an A picture. Once classified, such designation should stand.” The four “obstacles” referred to “must be overcome if the code is to mean anything,” the organization feels. “We volunteer our efforts in any fashion that may be requested of us to iron out any differences that exist as a result of these suggestions and, as in the past, will continue to be reasonable in arriving at a happy solution.” Although the ITOA holds that “some of the language is inadequate” in other portions of the proposed code, “the statement of the principle is the more important requisite.” Informed of the position taken by the (Continued on page 58-G) such a pact is that what applies in one city won’t apply in another. For instance, Detroit has no zoning plan — other cities do. I’m not in favor of the pact, because you can’t set up anything on a national basis that will apply to every local situation. “The time spent in developing it has not been wasted, however, because real progress has been made toward an understanding, even though it cannot be placed precisely in words. We know the pact won’t work out, because it is full of loopholes to begin with. Too much is a matter of interpretation. What do specific terms in the pact mean, for instance? Different trade authorities can give different answers. “There were a lot of things in the industry that were wrong — such as forcing the exhibitor to buy shorts along with features, and score charges. But they eliminate score charges and raise film rental. Is that fair trade? On the other hand, the average independent exhibitor doesn’t know what is back of a film production. But when a circuit buys pictures, it is usually represented by experienced men who have an understanding of production. “After all, are there any real independents? The ‘independent’ is usually a member of some trade association group anyway.” Trade Practice Pact Draws Mixed Reaction in Detroit 52 BOXOFFICE :: April 15, 1939