Boxoffice (Oct-Dec 1940)

WOULD PERMIT MAJORS 3 -YEAR SPAN IN WHICH TO ACQUIRE THEATRES, 'PROTECT' INVESTMENTS (Continued from page 6) continued during a period of not less than three successive months; and (3) The distributor during such period has licensed the features requested by the complainant on the run requested by him to a theatre (sometimes hereinafter referred to as a circuit theatre) which was in competition with the theatre specified in the complaint and which was a component of a circuit of not less than 15 theatres or which was affiliated eithei by stock ownership, common ownership, common buying or otherwise with a circuit of not less than 15 theatres or the licenses for which were negotiated by a buying combine or common buying agent negotiating for not less than 15 theatres; and (4) The complainant’s theatre has not available to its features sufficient in nature and quantity to enable it to operate on the lun requested by the complainant; and (5) (a) Sul)sequent to July 20, 1935 and prior to July 20, 1940 the complainant operated the theatre specified in his complaint on the same run as or on an earlier run than that enjoyed by the circuit theatre specified in the complaint; or (b) Subsequent to July 20, 1940 and during the two consecutive motion ificture seasons (Footnote No. 23) immediately preceding the filing of the complaint, the complainant oi)erated the theatre specified in his complaint on the same run as or on an earlier run than that enjoyed by the circuit theatre specified in the complaint and during such period exhibited on such run substantially all the features released during such period by the distributor complained against; or (c) Subsequent to July 20, 1935 and iirior to July 20, 1940 the complainant demanded in writing (Footnote No. 24) features for the theatre specified in his complaint from the distributor complained against on the same run as or on an earlier run than that enjoyed by the circuit theatre specified in the complaint; or the complainant had filed with a Local Clearance and Zoning Board or a Local Grievance Board under the Code of Fair Competition for the Motion Picture Industry approved pursuant to the National Industrial Recovery Act such a complaint which was not finally disposed of by .‘^administrative decision under said Code prior to May 27. 1935; or (d) The complainant operated the theatre specified in his complaint for at least one year prior to the entry of this decree, and subseiiuent to July 20, 1935 and prior to July 20, 1940 a prior operator of said theatre had demanded in writing (Footnote No. 25) features from the distributor complained against on the same run as or on an earlier run than that enjoyed by the circuit theatre specified in the complaint; or the complainant had filed with a Local Clearance and Zoning Board or a Local Grievance Board under the Code of Fair Competition for the Motion Picture Industry approved pursuant to the National Industrial Recovery Act such a comi>laint which was not finally disposed of by administrative decision under said Code prior to May 27, 1935; and (6) Such refusal to license the exhibition of said features in the complainant’s theatre specified in his complaint was in fact because the theatre licensed to exhibit them on the run requested by the complainant was a circuit theatre. C. In determining whether tlie exhibitor’s complaint is established by the evidence, the arbitrator shall take into consideration, among other things, the following factors and accord to them the importance and weight to which each is entitled, regardless of the order in which they are listed: the terms, if any, offered in respect of each of the two competing theatres; the seating capacity of each of said theatres; the capacity of each for producing revenue for the distributor; the character, appearance and condition of each, including its furnishings, equip 22. A theatre shall not he deemed to liave replaced such an existing theatre unless erected in the same neighborhood as one which was destroyed or i>ermanently abandoned as a theatre, for the purpose of succeeding to its patronage, and with a seating capacity not more than 25 per cent greater than that of the theatre replaced. 23. A motion picture season means tlie iJcriod from September 1 of one year to August 31 of the next year. 24. Demands in writing shall be deemed to include complaints in writing to the Department of Justice. 25. See Footnote 24 to this Section. First Inkling Goes Back Three Months New York — First inkling of the ground to be covered in the consent decree was conveyed to the industry by BOXOFFICE with exclusive publication on July 27 of the first of the tentative proposals in the negotiations looking toward an out-ofcourt settlement of the government's antitrust suit against the majors. At that early stage, rules of arbitration and appeals had not been drawn up. But when they were, BOXOFFICE again was first by publishing the nextto-final draft on October 26. Between then and now, decree negotiations have been reported fully and, in many instances, ahead of contemporaries. But even with the official release by the department of justice of the October 25 proposals, some observers, and they are skeptics, cling to the opinion the final chapter has not yet been written. They point to the title sheet of the latest text which reads, "Draft of Proposals for Consent Decree." ■ U ment and conveniences; the location of each of said theatres: the character and extent of the area and population each serves; the competitive conditions in the area in wliicli they are located; tlieir comparative suitability (Footnote No. 2G) for exhibition of the distributor’s features on the run reciuested; the cliaracter and aldlity of the exliibitor operating each and his reputation generally in the industry and in the community for showmanshii), honesty and fair dealing; the policy under which each of the theatres has been operated and the policy under which the complainant proposes to operate his said theatre if he obtains the run requested; the financial responsildlity of the exhibitor operating each of said theatres; and the distributor’s prior relations with each of the two theatres involved and with their owners and operators and any equities arising therelrom. I.>. If in any such arbitration the arbitrator finds (Footnote No. 27) for the complainant, he may enter an award against the distributor which shall not affect the license to exhibit any feature then under license to the circuit theatre but which shall prohibit such distributor from thereafter licensing its features for exhibition either in the circuit theatre specified in the com])laint on the run requested liy the complainant, or in the complainant's theatre specified in the complaint, on such run, otherwise than by a separate contract or agreement which shall not be a part of any contract or agreement for the licensing of features for exhibition in any other theatre or conditioned upon the licen.sing of features for exhibition in any other theatre. E. After a final award in favor of a complaining exhibitor has been made under this Section, such exhibitor may institute a further arbitration proceeding (to be held before the arbitrator who entered the original award, if available) upon the ground that such award has not been complied with in good faith by the distributor against which it was entered. If in any such proceeding the arbitrator shall find (Footnote No. 27) that the distril.)Utor has not complied in good faith with the original award, the arbitrator may award damages to the exhibitor for loss resulting from the distributor’s failure to comply with the original award but any such award of damages shall be purely compensatory. Any further arbitration luoceeding for an award of damages for violation of the original award 2(). In cMuisidering this fiutor in situations where the exhibitor eiistoiuaiiI.> exhibits feature.s in two <»r more theatres on the same run in the same situation as a unit by <'ontraoting for grou|)s of features on an “or” basis (i. e., for exhibition at one of two or more si>eeifie<l theatres) all of such theatres may be considered colleetively as a unit. 27. See Footnote 9 to Section IV. must be commenced within sixty days after such violation has occurred, by filing a statement specifying the facts constituting each alleged violation for which damages are sought and the exhibitor’s alleged damages resulting from each such alleged violation. No award of damages shall be made in any such proceeding for any violation of the original award not occurring within said sixty day period, but prior violations may, in any such proceeding, be considered by the arbitrator as evidence bearing upon the question of the distributor’s good faith. XI. (1) For a period of three years after the entry of the decree herein each of the consenting defendants will notify (Footnote No. 28) the Bel^artment of Justice immediately of any legally binding commitment for the acquisition by it of any additional theatre or theatres. (2) During such period each such defendant will also report (Footnote No. 1) to the Department of Justice on or before the tenth day of each month the changes in its theatre position, if any, that have occurred during the preceding month, as follows, together with a statement of the reasons for such changes: (a) Theatres contracted to be built, or under construction; (b) Theatres lost or disposed of; (c) Theatres acquired; (d) Interests in theatres acquired, with a statement of the nature and extent of such interests. (3) If upon receipt of such information the Department of Justice requests any such defendant to furnisli further information with respect to any of the above transactions in which it is involved, such defendant will make a reasonable effort to supply such information promptly. (4) No information furnished under subdivision (1), (2) or (3) hereof shall be divulged by any representative of the Department of Justice to any })erson other 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. (5) For a period of three years following the entry of this decree, no consenting defendant shall enter upon a general program of expanding its theatre holdings. Nothing herein shall prevent any such 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 subdivision (5) shall be only by application to the Court for injunctive relief against the consenting defendant complained against, which shall be limited to restraining the acquisition, or ordering the divestiture, of the theatres or interests therein, if any, about to be acquired, or acquired, in violation of this Section. xir. (a) If, prior to June 1, 1942, a decree shall not liave been entered against the defendants, United Artists Corporation, Universal Corporation and Columbia Pictures • Corporation, requiring each of them to trade show its features before licensing the same for exhibition. Section III of this decree, after said date, shall be inoperative and of no binding force and effect upon the consenting defendants, or any of them, except with respect to licenses entered into prior to September 1, 1942, for the exhibition of features released i)rior to such date and subsequent to August 31, 1941. (b) If, prior to June 1. 1942, a decree shall not have been entered against the defendants United Artists Corporation, Universal Corporation and Columbia Pictures Corporation, limiting the number of features which may be licensed in a single group, subdivision (a) of Section IV of this decree, after said date, shall be inoperative and of no binding force and effect upon the consenting defendants, or any of them, except with respect to licenses entered into prior to September 1, (Continued on page 12) 2S. The notifioiitioii and report shall include such coininitments and changes as ina.v have been made by corporations not parties to this decree which are controlletl by such defendant. They shall also include such coniinitinents or changes as may have been made by corporations in which such defendant owns a financial interest but which it does not control, if such defendant has received knowledge of such coininitments or changes. Kach defendant will reipiest such c(»rporations to notify it immediately of any such coinmitinent or change. BOXOFFICE :: November 2, 1940 11