Boxoffice (Apr-Jun 1939)

ITOA in New Attack On Film Players Minneapolis — Lambasting film stars for indiscriminate radio appearances and urging them to make personal appearance tours, the ITOA of New York is off on another violent Hollywood attack. “Can Movie Stars Think?” is the caption of a full page article in the current issue of The Independent, ITOA’s house organ which was distributed widely at the Allied convention here. “The amazing aspect of motion picture stars is that that there are so many of them who don’t know the first thing about motion pictures. So infrequently do Hollywood stars evidence enough interest in the industry that pays them their salaries that when one of them does pronounce views on the business of making and exhibiting pictures, it is not only startling but gratifying,” the article states. The player referred to is Douglas Fairbanks jr., who is credited with having stated product is “watered to the point of becoming anaemic screen literature.” With that as a springboard, The Independent then starts going: “Hollywood is prone to regard the exhibitor as a necessary evil, good enough to sell pictures to as long as he behaves himself. So far as regarding him as an indispensable cog in the industry and endeavoring to aid him in putting over Hollywood’s product, that is as remote as a trip to Mars. “It would seem that the natural thing to do when reports of bad business at the boxoffice come drifting into Movieland would be for the stars among others to apply themselves in seeking a cause and then a solution. But such things as double features, chance games, giveaways, poor grosses, overwhelming criticism and cries of anguish of some 16,000 exhibitors seem not to concern them in the least. “When the picture leaves the studios — that is when our stars should do their best work. Every articulate person in Hollywood has a duty to the business he works for, especially when he gets several thousand a week. When exhibitors from coast (Continued on page 30-E) Allied Buying Pool Not Mentioned Minneapolis — Not a word on Allied's proposed national buying combine reached the floor of the convention. Neither was there a solitary mention made in open convention about any anticipated movement seeking to bring down film rentals. Robert J. O'Donnell, general manager of the Interstate Circuit who came here at the request of William F. Rodgers to answer persistent charges, years old, by Col. H. A. Cole that 23 theatres or more in Texas had been compelled to sell to circuits, never got a chance in the uproar on Thursday which resulted in severance of negotiations by distributors with Allied as a group. What Precipitated the Break (Continued from page 23) lowance of an enlarged cancellation privilege for unidentified pictures. The terms and conditions upon which a limited cancellation privilege is offered are calculated to permit of circumvention and evasion and, as we shall later point out, the indications are that the distributors are preparing to make use of the obvious loopholes in the proposals. The distributors made it plain at the outset that they were not willing to discuss the question of theatre divorcement and, consequently, the proposals contain no provision in reference thereto. The provision relating to the forcing of shorts, newsreels and trailers contains conditions and limitations which greatly impair the effectiveness thereof and which wo'uld enable the distributors to deprive an exhibitor of the right to arbitrate disputes arising thereunder by simply refusing to accept his application. The provision against designated playdates on flat rentals and guarantees as against percentage is utterly hollow and the provision for arbitrating the suitability of a particular percentage picture for preferred playing time conveys only the doubtful privilege of relieving the exhibitor of that picture in order that the distributor may designate another in its place. The proposal offers no relief from the increasing abuse of monopolizing all of the exhibitors’ preferred time, representing sometimes as much as 80 per cent of their total weekly revenue, with high percentage pictures. Provision is made for arbitrating clearance but this has been marred by the insistence of the distributors— contrary to assurances given your Negotiating Committee — that they shall have the right to designate one member of the board of arbitrators. In cases where the dispute is between an affiliated theatre and an independent theatre, this participation by the distributors would throw the board out of balance. Selling away from an established customer is made arbitrable but the many conditions attached to the provision make it easy of evasion and of value only in case the distributor acts in utmost good faith. The same comment is pertinent with respect to the provision that some run shall be made available to an exhibitor applying therefor. The “right to buy,” as contended for by Allied and as sought by the Government in the pending suit against the Griffith Circuit and others, is not mentioned in the proposals. Overbuying is arbitrable so far as the number of pictures is concerned; no authority is given the boards to apportion the product on the basis of quality, thus guaranteeing the offending exhibitor his choice of the better features and leaving for the complainant nothing but culls. Lack of avaliability of prints is not provided for. Arbitration of contract disputes would not be helpful on this as the distributors have so carefully protected themselves in their contracts against demands for prints. The provision relating to coercion in the selling of pictures contains terms and conditions similar to those included in the provision with respect to the forcing of short subjects which greatly impair its usefulness. 2. The proposals as drafted do not conform to representations made during the negotiations. In Chicago, November, 1938, after the distributors had outlined to your Committee the nature and extent of the concessions they were willing to grant, they announced that they would undertake the task of reducing the same to writing as they wanted the proposals to be stated in simple, understandable language without the complications characteristic of lawyers’ productions. The following are some of the instances in which the proposals as thus drafted materially depart from the representations made during the negotiations. (The following references are to the draft dated June 10, 1939). Preamble, never discussed, appeared for the first time in the March 30 draft. The significance of this innovation, and its probable effect on the efforts of exhibitors to secure additional relief, will be discussed later in this report. Page 3, subparagraph (d), providing that cancellations not exercised in top brackets shall be relegated to the lowest bracket. This was never mentioned in the negotiations and appeared for the first time in the draft submitted to us on January 16. Page 5, III, “Public demand for exceptional pictures.’’ Nullifying conditions appeared for the first time in the March 30 draft of proposals. Page 5, III, second paragraph. Entirely new limiting clause, never discussed with your Committee and appearing for the first time in the March 30 draft. Page 7, V (a), “Not arbitrable,” appears for the first time in the March 30 draft. Page 9, VII, second paragraph. Was not discussed with your Comjmittee, appeared for the first time in the March 30 draft and, as above pointed out, materially affects the effectiveness of the provision against the forcing of shorts. Page 11, XIII, second paragraph. New, nullifying and not discussed. Page 12, (iii), clause imposing greater burden of proof on complaining exhibitor than is imposed on a complaining distributor was never discussed with your Committee. Page 12 (2). Clearance. Clause recognizing propriety of clearance, whether legally or illegally imposed, was included without consultation, is new, and extremely dangerous. Page 13 (3). Overbuying. Form was never discussed. Page 14 (XV). “Agreement to Arbitrate.” Neither this nor other arbitration features were ever discussed in the Negotiations, except with reference to clearance. Numerous suggestions made by the General Counsel are included in the latest draft, but the adoptions and rejections of his suggestions were not discussed even with him. Pages 15-16 (XVII) — Term. No discussion. The references to the effect on the Code of possible legislation was never discussed and is out of line with assurances given in reference to the Neely Bill. Page 20 (3). Disputes relating to clearance. Contrary to all discussions during the negotiations, as above pointed out, and appeared for the first time in the March 30 draft. In order to appreciate the significance of these changes, most of which appeared for the first time in the March 30 draft, it should be remembered that your Committee had no contact with Mr. Rodgers’ group after January 16; that the distributors produced nothing in the way of a revised draft between January 16 and March 30, and this in spite of the fact that it was published in the trade press and generally known that the authority of the Allied Committee would lapse on March 1. The foregoing fully vindicates the position taken by Allied on December 1 and restated on numerous occasions since then that it would not take final action on the proposals until it had a complete program which the distributors would pronounce final. 3. Reports of steps being taken to circumvent the provisions of the Code. While your Committee does not take the position that in this matter the prospects for the future must be judged solely by the experiences of the past, they feel that as an introduction to what follows they may properly refer to matters that occurred under the NRA Code. During our negotiations the assertion was made by a member of the Committee that in order to defeat the cancellation privilege allowed by ' the NRA Code the distributors deliberately padded their blocks with low cost “cheaters” in order that the exhibitors would exhaust their cancellation privilege thereon. This was confirmed by one of the distributor group. And certainly it is well known that the practice of selling shorts on the weekly payment plan was devised to defeat the NRA provision against forcing shorts except in proportion to the number of features licensed. From reports received from credible exhibitor informants in various parts of the United States your Committee is convinced that the following practices are now being employed by some at least of the major distributing companies which are advocating approval of the proposals by the exhibitors: — (a) Requiring exhibitors to negotiate for and license short subjects before they will even discuss selling their features. (b) Shorts are being forced. (c) Foreign pictures are being forced. (d) Despite business conditions now prevailing, price of flat rental pictures raised and number of percentage pictures increased to offset possible loss through exercise by exhibitors of the cancellation privilege. (e) Special inducements offered in price and terms for waiver of the cancellation privilege. (f) Waiving of guarantees and selling on straight percentage in order to secure preferred playing time. (g) Score charges being added to all flat rentals for 1939-1940. In addition, distributors are increasing film rentals to equal the amount of the score charge formerly paid on percentage pictures. (h) National allocations discontinued, thus retarding free use of cancellation and restricting same to the lowest price bracket. Based on the statement made by a principal executive of one of the major distributors at the open forum yesterday, your Committee must conclude that the purpose of the distributors is to exact increased rentals which will compensate for any possible loss under the proposals. That being so, the effect of the Code on the exhibitors will be to compel them to pay more money than last year for fewer pictures; or, stated differently, to require the exhibitors to pay in full for all pictures cancelled under the privilege granted. 4. Acceptance of the proposals would jeopardize prospects of exhibitors for additional relief. At the very first interview which Messrs. Yamins and Myers had with Mr. Rodgers on the subject of the negotiations, about the middle of September, 1938, the question was posed, “Will participation on our part mean that we will be precluded from seeking passage of the Neely Bill?” They were told that the negotiations would have no bearing on the Neely Bill or the Government suits, except as the experience might bring about better (Continued on next page) BOXOFFICE :: June 17, 1939 30-C