Boxoffice (Apr-Jun 1939)

CODE STILL AVAILABLE TO ALLIED MEN AS INDIVTODALS, DESPITE MINNEAPOLIS SPLIT For the Distributors— S,M Full personnel of the distributors sub -negotiating committee on trade practices, photographed for Boxoffici: on the convention floor at Minneapolis. Left to right, W. F. Rodgers, Gradwell L. Sears and Abe Montague. What Precipitated the Break Minneapolis — This is the text of the report made by Allied’s code negotiating committee to the organization’s board of directors. It was the direct cause of the split between that group and the distributors’ negotiating committee on trade practice formulation: The Board of Directors of Allied States Association on June 13 unanimously approved the informal report of the Negotiating Committee recommending rejection of the proposed Trade Practice Code and Rules of Arbitration and directed the Committee to prepare a detailed written report which would serve as the basis of a recommendation by the Board of Directors to the Tenth Annual Convention of the Association now being held. This report is submitted to the Board in compliance with its direction. The grounds on which the Committee recommended rejection of the proposals were: (1) They do not provide an effective remedy for the major abuses of which Allied States Association has complained and for the correction of which it has waged a long, aggressive and increasingly successful campaign; (2) the proposals as drafted and submitted by the distributors do not fully and accurately reflect the substance of the negotiations and representations made by the distributors in the course thereof; (3) reports coming from many sections of the country show convincingly if not, indeed, conclusively, that the distributors already are taking steps to circumvent and nullify the moderate concessions offered; and (4) acceptance of the proposals, particularly in view of the preamble thereto, would handicap the exhibitors in seeking further relief from oppressive and monopolistic trade practices, would hinder the Government in the prosecution of pending actions under the anti-trust laws and would supply the distributors with additional ammunition with which to combat the Neely Bill and other remedial legislation. These points will be discussed in the order in which they have been enumerated. 1. The proposals do not afford an effective remedy for major abuses. These major abuses were enumerated in a memorandum presented by the Negotiating Committee to the Distributors' Committee on October 27, 1938, and are as follows: (a) Compulsory block booking and blind selling; (b) ownership and operation of theatres by the producer-distributors; (c) forcing of shorts, newsreels and trailers; (d) designated playdates; (e) unreasonable clearance; (f) selling away from an established customer; (g) the "right to buy;” (h) overbuying; (i) lack of availability of prints; (j) coercion in the selling of pictures. The distributors’ proposals carried out in good faith would mitigate the evils of compulsory block booking by granting a graduated cancellation privilege based on the average film rentals paid. They would not abolish compulsory block booking; on the contrary, they would perpetuate it by requiring that an exhibitor, in order to secure the right to cancel, m.ust contract for all of the feature pictures offered him at one time. The proposals provide no remedy whatever for blind selling, the distributors having rejected all suggestions by your Committee for the identification of pictures in the contracts and for the al (Continued on page 30-C) For Allied — “Sifrord studio W. A. Steffes, Allied convention chairman, urging Minneapolis conventioneers to remember distributor representatives who spoke were guests entitled to courtesy as well as a hearing. Col. H. A. Cole, Allied president, seated. Distributors Are Charged With Evasion and Bad Faith in a Report Minneapolis — The seven code-formulating majors on Thursday broke off all negotiations with Allied as a group, but will offer the pact and seek to line up Allied men as individual theatre operators. The blow-off developed late Thursday afternoon following the delivery of a lengthy report by Col. H. A. Cole in which the negotiating distributors were charged with evasion, bad faith and the introduction of new and hitherto undiscussed provisions and phrases in the latest draft delivered to Allied leaders here Tuesday. It was the climax of the Allied convention, but not unexpected by those distributors present, including a number of top-ranking men from New York. What was unexpected and a “shock,” as William F. Rodgers, chairman of the distributors’ subcommittee on negotiations put it, was the nature of the report, the ground it covered and the manner of presentation which Rodgers, having taken the floor for a second time, declared impugned his integrity for the first time in his career, and the integrity of other distributors on the formulating committee as well. Draft Approved Earlier The negotiating committee had submitted its report to Allied’s board on Tuesday and at that time was unanimously approved. This was before any of the distributor representatives, including Gradwell L. Sears of Warner, Abe Montague of Columbia, and Rodgers of M-G-M had addressed the convention on various phases of the pact. Prior to the reading, however. Cole said the report had been withheld for final consideration of Allied’s board until the open forum had ended. In other words, having been approved on Tuesday, according to Cole, it was again approved on Thursday. There was no explanation offered as to what machinery might have been utilized if, in its second deliberation, the unanimous approval voted two days earlier was to undergo change for any reason. The report cited four reasons for rejection of the code: “1 — They do not provide an effective remedy for the major abuses of which Allied States Association has complained and for the correction of which it has waged a long, aggressive and increasingly successful campaign. “2 — The proposals, as drafted and submitted by the distributors, do not fully and accurately reflect the substance of the negotiations and representations made by the distributors in the course thereof; “3 — Reports coming from many sections of the country show convincingly if not, (Continued on next page) BOXOFFICE :: June 17, 1939 E 23