Boxoffice (Jul-Sep 1940)

MAJORS SEEK TO HAVE APPEAL BOARD UNDER DECREE MAINTAIN HEADQUARTERS IN NEW YORK Clam-Like Is the Way New York — Nobody will admit to anything. Those who ought to know, when they talk at all, say they don't believe it. But persistent continues the report that a lightning-like washup of the government suit may develop out ol Washington's desire to clean up the situation, forget about it and turn to other matters, chief among them, perhaps, the cross-patent situation which is delaying the national defense program. To this end, the understanding is the government is willing to bend as far back as it reasonably can by way of meeting objections of various defendant distributors on the theory this attitude will hasten an accord among the sued companies. From such an accord, the anticipation is there would stem a decree acceptable to all hands. This, in turn, sets up the hypothesis that a decree could be worked out to embrace the "Little 3" as well as the "Big 5." However and insofar as any comment is concerned, there isn't any. This circumstance embraces those who, by their high posts and otherwise, are, or ought to be, aware of what is happening, but also it includes those who think they know, but may not. One angle heard in New York during the week was an unconfirmed report the President had written Attorney General Robert Jackson a letter suggesting, and perhaps urging, an attitude on the part of the department of justice which would permit an adjudication of the issues on mutually satisfactory ground. ■ >J Also Consider Rotation Plan; Government Set For Capital Locale New York — Every effort will be made by distributor counsel before any consent decree is signed by the five majors to have the appeal board of three, under the arbitration setup, sit in New York instead of Washington, as proposed in the August 3 document. Lawyers contend that 35 per cent of the country’s revenue is derived from New York, the New England states, Washington and Philadelphia, hence, an appeal board should be quartered in New York, the focal point of these operations. There is also under consideration by the majors a plan to rotate the appeal board, if necessary, to such cities as Chicago and other points where a plethora of appeals originate and for convenience to exhibitors and distributors in those areas. An Earlier Desire Attorneys for the film companies have previously sought to have the seat of operations of the appeal board shifted to New York, but such governmental figures as A. H. Feller and Paul Williams have insisted on Washington. These men have told distributors point blank they want to keep it out of range of home office operations. Washington is also handy for Allied which has its headquarters in that city. Abram F. Myers, general counsel, resides there. In the changeover of sales operations, if and when the selling plan in groups of five goes into effect, an M-G-M spokesman states it will cost his company at least $500,000 in additional selling costs and bookkeeping charges work. This spokesman declares each of the other four companies figure on the identical amount and more as additional expenditures. Salesmen would have to make more trips to the field, it is stated, and when pictures Keni Expects Consent Dicker to Continue New York — Text of the cryptic statement issued by 20th Century-Fox follows: "The board of directors of 20th Century-Fox today (August 13) considered drafts of the more important sections of the proposed consent decree in the pending anti-trust suit (U. S. versus Paramount, et al.). S. R. Kent, president of the company, stated that he expected that negotiations with the government would continue and that the company would have no public statement to make until the matter was finally disposed of, one way or the other." are sold in blocks of five that means for each five pictures a separate contract must be written. Regardless of how many groups of five an exhibitor buys in one negotiation, the fact remains that a company selling 50 pictures would have 10 contracts to work on whertas in the past he may have had one. Also a salesman may have to visit exhibitors three or four times after the theatre operator sees the pictures in order to sell them. At any rate, there is no violent objection to this in face of the amount of money to be saved on legal fees in the event the suit is settled. See Huge Cost In other words, it is pointed out, rough estimates computed legal fees for the five major companies would run $5,000,000 or better, if the case w'ent to trial, then appealed in the various courts until a supreme court decision w'as handed dowm. This figure, as against the approximate $2,500,000 it would cost the same distributors to change over on new sales policies, at least represents a saving of $2,500,000. In times as these, it is held, these savings could very well be regarded as a profit. Reports that pressure was being brought to bear in an effort to get a quick decree are denied by all counsel. Col. William J. Donovan of Donovan, Leisure, Lumbard and Newton is said to have used his political influence to hasten a signing of the decree. His trip abroad on government business, plus his recent weekend visit with President Roosevelt gave credence to the rumors, but his associates and colleagues adamantly deny he has had anything to do with the all-industry suit since he went to Europe several weeks ago. Replacing Donovan in negotiations on the decree are his partners O. C. Doering and R. R. Irvine with John Howley of his office and William Zimmerman of the RKO home office sitting in. There have been no meetings at the Bar Association Building by the major attor neys since the August 3 draft was completed. None is contemplated unless something develops which requires immediate attention. To quote one attorney, “We are sitting quietly on the August 3 draft,” It is known Austin C. Keough, vicepresident and general counsel for Paramount, and Richard E. Dwight of Dwight, Harris, Koegel & Caskey, representing 20thFox, spent the weekend in Washington in connection with changes in the escape clause. On Tuesday afternoon 20th-Fox board met and discussed the revived escape clause, but took no action. After the meeting, Dwight told Boxoffice the other companies have been in touch with him on the changes and that he saw no objection by them “when anything is more favorable to them.” However, important counsel at M-G-M and RKO refute this, adding they had not seen or heard of the revised escape clause, Dwight indicated further changes would be made in the questionable clause before (Continued on page 18) 0 ...... Skouras Strong for Decree Settlement New York — Spyros Skouras, operating head of National Theatres, exhibition arm of 20th Century-Fox, is serving as a sort of one-man committee urging all and sundry involved in the government antitrust suit to reach an agreement on a decree and then accept it as a quick means out of the litigation. His arguments include the cost if the case goes to trial, the time element and the lack of any assurance over trial outcome. The situation is interesting in view of the objections over decree proposals and acceptance raised by the National's associated distributing company. VI ^ 4 BOXOFFICE :: August 17, 1940