Boxoffice (Jan-Mar 1940)

DISCUSS END OF SUIT BY U. S. LAW WITH MODIFIED, OR COMPROMISE, NEELY ANGLES Basis of Constant Talks Now Going on With Commerce Dept. New York — If the government suit against the majors, some or all of them, is at all settled, in all probability the procedure will take the form of a statute in the nature of a modified or compromised Neely bill without direct supervision of the government but under which no theatre divorcement would be provided. Boxoffice learns such is the basis on which negotiations are being carried forward constantly now with the department of commerce. This means a consent decree, as such, is out. It also tends to substantiate the frequent inside reports published by Boxoffice that, under no circumstances, would the theatre-operating majors go for divorcement. However, the proposed plan is far from completion. It is acknowledged much has yet to be done to finish the task by May 1 which is the trial date for which the department of justice is shooting. But every effort is being exerted for an agreement, in principle if not in language, by that date. Highlights of the tentative draft, some of them touched upon last week, are these; although changes are easily and well within the realm of possibility: 1— Features to be sold in blocks of five with all members of each block completed and trade shown in each territory before release. 2. — Cancellations only on the ground specific attractions are held objectionable locally. 3 — No forcing of shorts, newsreels or trailers. 4 — Local arbitration, in the main, to be made up of one-man boards. He is to be an outsider without film affiliation and is to be selected by agreement between distributor and exhibitor. 5. — Establishment of overbuying, clearance and the right to sell established customers as specific subjects for arbitration. How the government, on this basis, will withdraw its suit and “save face” with its potential witnesses, including exhibitors and independent producers who have registered complaints and signed affidavits to back up those complaints, is one of the angles reputedly still very much up in the air. Likewise, it would be of no direct concern to those majors who may go for the settlement procedure. According to current calculations, the proposed plan would be entertained as a counter proposal to the Neely bill. Again, the method may take the form of amendments to that proposed measure. But in any event, there is now expected to be a bill, or a statute, designed to become the law of the land. Whether three or four of the majors de termine against the general proposal is of luke-warm interest to those interests who approve the present outline. These groups, all of them exhibitors as well as producers and distributors, take the view that, if the proposals are worked out and ultimately embodied in statute form, the entire industry will have to operate under its provisions, including companies so far not consulted like Republic, Monogram and not excepting the state righters. Regardless of this approach, however, some circles already express their conviction that the group-of-five plan will be the formula to replace the proposals set up in the Neely bill, but carrying with it the exhibitor privilege of buying more than five at a time if he so desires. Cancellations No Thom In a sort of recognition of the sweeping change which this plan would bring about in the industry’s long-functioning full-line selling formula, a compromise involving cancellations is presumed acceptable to the government. In limited sales, it is reputedly felt the need for cancellations will recede. At least, several of the distributors, parties to the deliberations, privately express the view cancellations would provide no pressing problem. The suggestion, as it applies to the nonforcing of shorts, newsreels and trailers, stands hard and fast by the original trade practice plan, the one which Thurman Arnold unceremoniously kicked out some time ago. Insofar as shorts enter, the understanding is they may be sold in blocks, split up into units or variously disposed of, so long as no compulsion is attached to — Photos by Cosmo-Sileo their sale. This in-general formula is believed designed to apply to newsreels and trailers as well. While the proposed form of arbitration, in the main, would set up solo boards in each key city, it is possible, although not yet established, that more than one outsider may be utilized in some areas, dependent upon local conditions. Panels would be drawn in each city and from them selections made mutually by distributors and exhibitors. Arbitrators may be former judges, lawyers, local business men in good repute and even men professionally engaged in arbitration work. It is fixed, on the other hand, that selections could not have a financial or direct interest in the industry. It is being recalled now that distributors figured the impartial, or neutral, member of the arbitration boards proposed under the trade practice plan would have been the deciding factor anyway. Provided the appointed individual is a man of unquestioned integrity and so long as he is mutually selected by disputants, the argument currently advanced is boards with distributor and exhibitor members are not essential. Details as to length of office is relatively minor. For each appointee, however, to retain his post permanently is not remote. The problems of overbuying, clearance and the right to sell the established customer appear to rate consideration along lines etched in the code. Interested distributors are concerned over the right to sell, having passed through a number of (Continued on page 19) They Moved Mightily Behind the Scenes — Above, left, is Nicholas M. Schenck, •president of Loew’s, Inc. Flanking him is Harry M. Warner, president of Warner Brothers Pictures, Inc. They are the two individuals who, above all others, mustered their influence behind the currently -in-work negotiations looking toward a settlement of the government suit through the medium of the department of commerce. 4 BOXOFFICE :: March 30, 1940