Boxoffice (Jul-Sep 1947)

MAJORS REPORT ON COMPLYING WITH PROVISIONS OF DECREE Pools, Joint Operations and Profit-Sharing Deals In Great Numbers Have Been Eliminated, But There Is No General Breaking Up of Circuits By J. M. JERAULD NEW YORK — Important ehanges have been made in major circuit theatre operations since the antitrust decree was handed down New Year’s eve, but there has been no general bi’eakup of circuits. None will be started pending the U.S. supreme court decision on appeals. Dozens of theatre pools, joint operations, profit-sharing arrangements and partnerships have been broken up in cities across the country, as these were found illegal by the U.S. statutory court. In the antitrust decision the defendant major theatre-owning companies — RKO, Paramount, Warners, Loew’s and 20th-Fox — were given six months within which to comply with practices found illegal. These included joint operation of competing theatres, profit-sharing arrangements that halted competition, leasing to other defendants, continuing to own houses unless the ownership is 95 per cent-or more. The defendants were given two years in which to dispose of houses not coming within the 95 per cent classification. Paramount reported that it had not started any negotiations for sale of its important partnership holdings because to do so before a final decision by the supreme court would endanger its investments. RKO has 22 corporations controlling 270 theatres on some of which negotiations have been started for separations, it was revealed. RKO has dropped ten agreements covering 45 theatres in five states. National Theatres Deals National Theatres (20th-Pox subsidiary) has ended 22 joint operations and six division-of-profit agreements. Most of the latter are in southern California. National Theatres also informed the court it has no present intention of selling theatres in which it has less than 95 per cent interest. It states that it will not disturb Evergreen States Theatres, controlled subsidiary in the northwest, and has no plans for buying or selling stock in 112 theatres in 44 cities and towns in eight states. Warner Bros, mentions only 82 theatres in nine states on which it has started negotiations for dissolution of partnerships. Two agreements, one of these on the Allen, Cleveland, and the other on the Felton, Philadelphia, have been reached. On the Felton, the arrangement is to dissolve the corporation now leading the theatre and give Warners a lease on the house, with court approval. All other Warner negotiations are stymied. The company is supposed to have 457 theatres. Loew’s says it will not sell theatres pending the supreme court decision. It has 29 houses which might be affected by the rule requiring 95 per cent ownership, 15 owned with independents and 13 other defendants. One of the joint ownerships, a 50-50 arrangement, is on the Orpheum, Denver. Paramount’s report — 163 pages — gives an idea of the complexity of an effort to meet the court’s requirement that 95 per cent ownership is essential to full control. The company is supposed to have more than 1,500 theatres in partnership and other arrangements. It was not required to make any report on theatres owned 95 per cent — and did not do so. It reported seven important groups of houses owned 95 per cent — Balaban & Katz, Minnesota Amusement Co., Intermountain Theatres, New England Theatres, Inc., Para mount-Nace, Paramount Theatres Corp. (three houses) and United Detroit Theatres. Most of the others are operated under 50 per cent partnership agreements with circuits. Below the circuit level there is a mass of small corporations, mostly partly owned by the circuits, some leases, and some houses owned in fee. Dozens of theatre sites are owned by the circuits and were listed in the report, presiunably to indicate that plans for building are in the offing. Some houses were reported under construction. Paramount Not to Sell Or Buy Pending Appeal Paramount, largest theatre operating concern in the United States, with an estimated 1,500 affiliated theatres, most of which are operated through partnerships, told the court that it did not intend to sell or buy theatres in which it does not already own a 95 per cent interest pending settlement of the case in the supreme court. To do so, it stated, could result in losses, because of the possibility that complete divorcement might be ordered. Details of theatres owned 95 per cent were not given. It pointed out that the New York statutory court decision allowed two years in which to make whatever changes are required. The listings presented to the court show seven important groups of theatres already 95 per cent owned. These are: Balaban & Katz, with the exception of 11 subsidiaries operating 18 theatres, and one subsidiary operating one house; Intermountain Theatres, Inc., with the exception of four subsidiaries operating seven theatres; Minnesota Amusement Co., operating 71 theatres; New England Theatres, Inc., except partly owned subsidiaries operating 17 theatres; Paramount-Nace, except two subsidiaries operating two theatres; Paramount Pictures Theatres Corp., operating two theatres at Newburgh, N. Y., and one-half of the Rivoli Theatre, N. Y., which is jointly operated with United Artists Theatres Corp.; United Detroit Theatres, except three subsidiaries operating four theatres. One group — Florida Inland Theatres, operating 16 houses, is 90.45 per cent owned. Publix Banford (North Carolina), operating eight houses, is 75 per cent owned. Hollywood Amusement Enterprises (Florida) is 64 per cent owned with three houses; Birmingham Theatre Operating Co., with six houses, is 60 per cent owned; Western Massachusetts Theatres, Inc., with 19 houses, is 52 per cent owned; Dominion Theatres, West Virginia, with 14 houses, 51 per cent owned. Thirty-eight companies are 50 per cent owned, and one is 25 per cent owned. Under the general listing of Florida Operations it was revealed that these theatres are operated by Clearwater Enterprises, Inc., 22.2 owned, three theatres; Florida Inland Theatres, Inc., 90.45 per cent owned, 16 theatres; Hollywood Amusements, Inc., 64.28 per cent owned, three houses; Tivoli Operating Corp., 100 per cent owned, one theatre. Paramount's Florida Sale Paramount recently sold 13 theatres to Frank Rogers, B. B. Garner and M. C. TaUey all of its stock in 13 theatres in Eau Gallle, Melbourne, Cocoa, Winterhaven, Tallahassee, Lake Wales, Eustis, Mount Dora and Unitella, but has an agreement, which has been postponed to 1950, for the purpose of all their interests in Florida Coastal Theatres, Florida Inland Theatres, Clearwater Enterprises and Hollywood Amusements, Inc., subject to the approval of the court. Alabama Theatres, Inc., 26; Drive-In Theatre, South Carolina; Eton Amusement Corp. and Elizabethton 'Theatres, Inc. (Tennessee), two; Greenwood Theatres, South Carolina, three; Johnson City Enterprises, Tennessee, two; North Carolina Theatres, Inc., 72; Arkansas Amusement Corp., nine; Augusta Amusements Corp. Georgia, fiye; Robert Lucas Theatres, Inc., and United Theatres, Inc., Georgia, 35; Central States Theatres Corp. (A. H. Blank), 37; Tri-States Theatres Corp. (Blank), 37; J. H. Cooper Operations, Nebraska and Colorado, seven; Essex Amusement Corp., Newark and Paterson, N. J., three; Interstate Theatres, Inc. and subsidiaries, 91; Texas Consolidated Theatres, Inc., 92; Jefferson Amusement Co. and subsidiaries, 71; Maine and New Hampshire Theatres Co. and subsidiaries, 25; Malco Theatres, Inc., 54; Publix Netoco Theatres Corp. and subsidiaries in New England, 47; Notopolous Operations, Pennsylvania, two; Paramount Hollywood Theatre Corp., Hollywood and Beverly Hills, Two; Paramount-Richards Theatres, Inc., 81; Penncom Corp. (Comerford), Pennsylvania, 69; Public Wheeling 'Theatre Corp., one; Strahan Theatre Corp , Yonkers, N. Y., one. In Buffalo, the report shows, Buffalo Theatres, Inc., with 13 theatres, is jointly owned with Loew’s, Inc., Paramount has 43 per cent of the common and 50 per cent of the preferred. Loew’s, Inc., has the same, and each has 50 per cent of the voting rights. RKO Has Ended 10 Pools Covering 45 Theatres RKO has ended ten pools covering 45 theatres in five states. The company also has sold out or swapped ownership or leases for seven theatres. In addition, it has sold its interests in two corporations operating seven other theatres. It has holdings below the 95 (Continued on page 10) 8 BOXOmCE :: July 5, 1947