Boxoffice (Jul-Sep 1939)

Gov't Hooks Up 1st Run Need With Suit Against Crescent Nashville — Although the Crescent suit is similar in many respects to the Schine action, the government presented an entirely new angle here when it stated that for an exhibitor to operate successfully in Crescent towns he must be able to get a “first, second or some run” from at least thi'ee or more major distributors. Naming Crescent Amusement, Lyric Amusement Co., Strand Enterprises, Cumberland Amusement Co., the New Strand Company, Rockwood Amusement Co., Cherokee Amusement Co., Kentucky Amusement, Muscle Shoals Theatres, Inc., as corporate defendants, the suit charges these defendants “have been able to take over operation of numerous theatres and keep other theatres closed in said Crescent towns during the past five years by virtue of their control. The Schine case covers a 10-year period. Individuals Named Individuals named in the action include Anthony (“Tony”) Sudekum, president of Crescent, Lyric, Strand, Cumberland, Enterprises and Muscle Shoals. R. E. Baulch, secretary and director of Crescent, Lyric, Strand, Enterprises, and is a director of Cumberland. Kermit C. Stengel, president and director of Cherokee and Kentucky Amusement, and an officer and director of Muscle Shoals. Louis Rosenbaiun, vice-president and director of Muscle Shoals. According to the complaint. Crescent operates in Brownsville, Clarksville, Cleveland, Columbia. Dyersburg. Greenville. Lebanon, Maryville, Morristown Murfreesboro, Paris, Springfield, Union City, Madisonville, and Nashville in Tennessee: in Bowling Green, Earlington and Hopkinsville, Ky., and in Alabama City, Decatur and Gasden, Ala. Lyric operates in Huntsville, Ala. New Strand in Kingsport, Tenn. Cumberland in Tullahoma, Dayton, Rogersville, Crossville, Winchester, McMinnville, Sparta, South Pittsburgh, Pulaski, Fayetteville and Franklin, Tenn. Strand in Ridgley, Ripley, Trenton, Tiptonville, and Philadelphia, Tenn.; Darkins, Marked Tree, Earl and Le Panto, Ark.; Kosciuski, Lexington, Louisville, Morehead, Itla Bema and Durant, Miss., and Clinton, Ky. Rockwood in Rockwood. Tracy City, Coal Creek, Manchester, and Huntington, Tenn., and Guthrie, Ky. Muscle Shoals in Athens, Florence, Tuscumbia and Sheffield, Ala. All Majors Defendants All major companies are defendants. Exclusive privileges of clearance and selectivity in towns where Crescent operates are among the charges. Another is the preventing of exhibitors from getting first class product, forcing rejected pictures on them and also requiring competitors to “maintain admission prices for such pictures higher than those warranted by quality” of product; preventing other ex hibitors from getting first or second run clearance. Further, it is charged, “independent exhibitors have been induced to sell their theatres to defendant exhibitors under the threat, express or implied, that if they refused to sell, defendant exhibitors would open competing theatres in the same town and prevent independent exhibitors from procuring desirable pictures. In a number of instances, independent exhibitors attempting to compete with defendant exhibitors have found it impossible to procure sufficient pictures to keep their theatres operating. In addition, defendant exhibitors have lowered admission prices, given away large sums of money as prizes and operate some of their theatres at a loss with the purpose and effect of driving their competitors out of business and giving defendant exhibitors a monopoly in the exhibition of motion pictures in the area in which they operate. By use of such tactics, defendant exhibitors have forced a large number of independent exhibitors in Tennessee, Kentucky, Alabama, Mississippi and Arkansas out of the motion picture business and, unless restrained and enjoined by the court, will continue to do so in the future until they have a complete control in the motion picture exhibition business in the areas in which they operate.” B<SK and Majors Assemble Data for Chicago Suit Chicago — Tlie attorneys for the major film companies and B&K are getting data ready again for the resumption of the government’s consent-decree case against them. Hearings are due to start again on September 6. When the case — which charges Barney Balaban, B&K and all of the majors except Columbia with violating the 1932 consent decree — was adjourned the early part of July, the government had concluded its preliminary arguments. Robert Wright and Seymour Simon, government attorneys on the case, have been working on the justice department’s antitrust case in Oklahoma, but are expected here shortly. Former Judge Edgar Eldredge, appointed by Judge Charles Woodward, is hearing testimony and evidence as a master in chancery, and is expected to be on the bench when the case is resumed two days after Labor Day. Attorneys for the film companies and B&K are working with the exchange branch managers, getting data which they will use in presenting their defense when the case resumes. New Deposition Date for Sam Meyers Is Set Chic ACC — Deposition of Sam Meyers in Frank Ford’s anti-trust suit against Meyers, B&K and the major companies was set for Friday (August 25). 'The matter has been postponed many times and it was thought might be postponed again. Trade Definitions A La Washington Nashville — The government, in its suit against Crescent, has its own definition for certain familiar industry terms. Eight are explained as follows: “First run exhibition in a town is the initial exhibition of a motion picture in that town with first run clearance. “Second run exhibition in a town is the exhibition of a motion picture with second run clearance, which has previously been shown in that town. “A first run theatre is a motion picture theatre which customarily exhibits first class pictures first run. “A second run theatre is a motion picture theatre which customarily exhibits first class pictures on second run. “Feature pictures are motion pictures five or more reels in length.” [Columbia, in its answer to the government, states that, as a rule, feature pictures within recent years are anywhere from five to 10 reels in length, whereas prior to 1928 features were as a rule five reels in length with few exceptions. It is also explained it is not uncommon for a producer to make 100,000 feet of film, which is subsequently edited and cut down to 10 reels and oftentimes less. 'This information is contained in papers filed in the New York federal court.] “Clearance is protection against competition granted to an exhibitor by agreement with a distributor which limits the terms on which the distributor may license films to other competitive exhibitors. “First run clearance is the protection customarily given a first run theatre by a distributor of feature pictures against competition resulting from the subsequent exhibition of its feature pictures at other theatres in the same town. Said protection generally takes the form of an agreement by the distributor covering a period of one year or more, during which it agrees not to license its features for exhibition at other theatres in the same town until a specified period has elapsed after the conclusion of their exhibition in the first run theatre and further agrees not to license said pictures to said other theatres unless said other theatres maintain a specified minimum admission price. “Second run clearance is the protection given a second run theatre by a distributor of feature motion pictures against competition resulting from the exhibition of its feature pictures at other theatres in the same town subsequent to the second lun. Said protection generaJjy takes the form of an agreement similar to that described in the preceding paragraph.” David Loew Not Making Any on UA '39-'40 List New York — David L. Loew will not produce on UA’s 1939-40 program, he said during his stay here. He added he is not set on his first vehicle or the star. He came on from the coast by car and plans to leave Wednesday for Hollywood via the same route. 32 BOXOFFICE :: August 26, 1939