Boxoffice (Jul-Sep 1940)

Thealre Acquisition Procedure Mapped (Continued from preceding page) than a duly authorized representative of the department of justice, except in the course of legal proceedings to which the United States is a party or as otherwise required by law. (4) — For a period of three years following the entry of this decree, no defendant shall enter upon a general program of expanding its theatre holdings. Nothing herein shall prevent any defendant from acquiring theatres or interests therein to protect its investment or its competitive position or for ordinary purposes of its business. Proceedings based on a violation of this sub-paragraph 4 of section 8 shall be only by application to the Court for injunctive relief against the corporate defendant complained against, which shall be limited to restraining the acquisition of or ordering the divestiture of the theatres or interests therein, if any, about to be acquired or acquired in violation of this section. 9. Escape Clause. At any time after June 1, 1942, any defendant may move to vacate the provisions of sections 1, 2a and 2b of this decree by filing an application under oath stating that during any consecutive nine months period preceding the filing of such application either (1) two or more distributors of motion picture films operating on a national exchange basis have leased their feature motion pictures* other than in accordance with the provisions of sections 1 and 2a of this decree or (2) 45 or more feature motion picture films have been leased other than in accordance with the provisions of sections 1 and 2a hereof. The petitioner and the other defendants who have signed the decree shall be served with notice of the filing of such application. Upon such application, the Court shall enter an order relieving the defendants of further compliance with the provisions of sections 1, 2a and 2b of this decree but not before August 31, 1942 unless within 60 days after service of such application the petitioner shall establish to the satisfaction of the court that during said nine months period (1) more than 72 per cent of the total gross income from licenses for the exhibition of motion pictures in the United States, excluding the gross income of State rights exchanges, has been derived from pictures leased by the defendants bound by this decree; and (2) the applicant distributor’s percentage of the total gross income from licenses for the exhibition of motion pictures in the United States distributed by it and by all distributors not bound by this decree, excluding State rights exchanges, has not decreased more than 5 per cent of the percentage which such distributor’s total revenues for the calendar years 1937, 1938 and 1939 is to the total for said three years of such distributor’s revenue and the revenue of all distributors not bound by this decree, excluding State rights exchanges. Each distributor subject to this decree agrees that upon the request of the department of justice it will furnish promptly all information and data which reasonably is required for the purpose of this paragraph. ^“Feature motion pictures” as used in this section shall not include "Westerns” and "Foreigns.” Arbitration Machinery, (a) — Selection of Neutral Arbitrators. — A panel of not less than 10 neutral arbitrators for each exchange district shall be designated by the American Arbitration Association. Neutral arbitrators shall not have any past or present connection with the production, distribution or exhibition of motion pictures nor any interest in any theatre, as either landlord, lessor or otherwise. The neutral arbitrators shall be paid at the rate of $ per diem when hearing a case. (b) — Arbitration Appeal Board — There shall be an arbitration appeal board consisting of three members appointed by the Court, each of whom shall be a person of known impartiality and distinction. One member shall be designated by the Court as chairman of the board. The jurisdiction of the board shall be to hear and determine appeals. Members of the appeal board shall be compensated on an annual basis. The chairman shall be paid $ Other board members shall be paid $ The Appeal Board shall sit and its offices shall be located in Washington, D. C. (c) — Arbitration Procedure — An exhibitor who has the right to arbitrate under any of the provisions of this decree may require the distributor to arbitrate the controversy , giving notice to the Secretary of the Arbitration Board located within his district. The parties to the controversy shall mutually agree upon a neutral arbitrator from the panel established for the exchange district in which the theatre of the complaining exhibitor is located. If the parties cannot agree on the choice of a neutral arbitrator from the panel within a reasonable time, the American Arbitration Association shall select a neutral arbitrator from the panel. Ten Arbitrators for Each Exchange Area (d) — Costs of Arbitration — The arbitrator shall award costs against either party or apportion them among the parties as he may deem proper. Costs shall be limited to the arbitrator’s fee and the filing fee. (e) — Administration of Arbitration Machinery— The maintenance and functioning of the arbitration offices and personnel in each exchange district shall be under the jurisdiction of the American Arbitration Association. Among the responsibilities of the American Arbitration Associar tion, it shall have the duty of budgeting the cost of operating the arbitration machinery, renting and maintaining offices, engaging personnel, etc. The American Arbitration Association shall prepare a budget setting forth the maximum annual cost of the arbitration machinery, which shall be submitted to the department of justice for its approval. Any increase in the amounts so fixed shall be made only after a majority of the companies have approved, except that the Court may, on the application of the petitioner, order such an increase if it finds that such increase is necessary for the effective operation of the arbitration machinery. (f) — Financing — The cost of the arbitration machinery shall be met out of a fund made up of (1) per cent of the gross receipts of each distributor and (2) a reasonable filing fee for each arbitration proceeding to be paid by the party filing the complaint. BOXOFFICE : : August 10, 1940 17