Broadcasting Telecasting (Jan-Mar 1960)

other companies he headed — Mutual Broadcasting System, Bon Ami Co. and United Dye & Chemical Corp. (currently known as Chemoil Industries Inc.). Mr. Guterma, as an outgrowth of his Mutual stewardship, was indicted by a federal grand jury last fall for failing to register as an agent of the Dominican Republic. He also faces a civil suit in Washington, initiated by the Dominicans for recovery of $750,000 allegedly paid by that government to Mr. Guterma in return for favorable broadcasts on Mutual news programs. MBS was absolved of complicity with Mr. Guterma in the Dominican case by U.S. Referee Asa Herzog last October. Mr. Guterma's association with Mutual begain in September 1958 when Hal Roach Studios, a subsidiary of the Scranton Lace Co., of which Mr. Guterma was board chairman, purchased Mutual. In February 1959, when Mr. Guterma became embroiled in a series of legal actions, he _ PROGRAMMING _ resigned his posts with all companies. Hal Roach Jr. gave Robert F. Hurleigh, now MBS president, an option to buy the network, and Mr. Hurleigh arranged for the sale of the network to a group headed by Malcolm Smith Jr. and Richard Davimos. Following a financial reorganization, the network was re-sold to industrialists Albert Gregory McCarthy Jr. and Chester Ferguson, who now own MBS. Mutual is not involved in any of the legal actions against Mr. Guterma. boxer and his manager, Constantine (Cus) D'Amato. An affidavit submitted to the court charged there was a "master monopoly plan (signed in May or June of 1958), the clear objective of which was to enable the two companies to exercise complete control over the management, live gate and valuable ancillary rights (i.e., tv, radio and motion pictures) to the promoting of world heavyweight championships." The affidavit claims the alleged conspiracy violates not only the state's Donnelly Act and general corporation law but also the laws, rules and regulations of the New York State Athletic Commission. Irving B. Kahn, TelePrompTer president, categorically denied the allegations, calling the charges "entirely groundless." He withheld further comment. A spokesman said the two corporations have 20 days to reply to the complaint, which was served last Tuesday (Jan. 26). It is understood that the state may begin proceedings 21 days after the complaint is served. A TelePrompTer official said that about 15% of the company's revenue in 1959 resulted from its participation in the heavyweight bouts. The overwhelming portion of its business derives from closed-circuit telecasts for industrial organizations, he said. The affidavit filed in court named Mr. Kahn, Mr. D'Amato and William P. Rosensohn, former TelePrompTer executive turned fight promotor, as the main agents of the alleged conspiracy. The "master monopoly plan," according to the affidavit, had three successive stages: • Mr. D'Amato was said to have "embarked on a course of continuing control of heavyweight championship contests through the use of subservient promotors and managers foisted by him on the challengers desiring to contend for the title." • Movie, radio and tv rights were said to have been "taken out of normal promotional and competitive channels, and manipulated solely for the mutual benefit of the D'Amato-Patterson and THEATRE GROUP TO BUY FILMS $30 million to be raised to purchase post-48 films for theatres and television A theatre exhibitor-backed investment group is setting its sights on raising $30 million in preparation for the purchase of television and theatrical reissue rights to the post1948 film libraries, totalling about 2,000 features. Ben Marcus, president of Wisconsin Allied Chain, reported last week that his company has become an investor in Motion Pictures Investors Inc. and meetings are being arranged with major film companies. He refused to say which companies are being approached or the names of persons representing MPI, but it is reported that Mr. Marcus and Walter Reade Jr., president of MPI and of Walter Reade theatres, will be the prime negotiators. Three Money Sources • Mr. Marcus told a news conference that MPI hopes to raise $30 million through various sources — $2 million from exhibitors, $3 million from public subscription and another $25 million from underwriters. He said that MPI hopes to convince underwriters of the soundness of the transaction by citing the success of past theatrical reissues, such as "Shane," "Samson and Delilah" and others. He acknowledged that the $30 milion would be "just a start." Other funds equired would be raised through reissues and tv sales. He expressed optimism about theatrical distributors' participation in the MPI project. He pointed out that once MPI obtained theatre and tv rights, it would arrange for reissue through the various selling companies. Accordingly, Mr. Marcus added, distributors would obtain not only funds paid for the rights but also a distribution fee of 30 to 35%. Mr. Marcus said that not all the post48 films would have theatrical re-issue value. "Perhaps only eight or ten from each company." He said MPI would make its own arrangements for distribution of the product to tv. In this connection, Mr. Reade indi cated last week that tv distribution of post-48 films probably would be handled by tv film distributors. He added that MPI did not intend to go into that phase of the business. This remark touched off speculation that MPI might seek financial support from tv distributors to reach its $30 million objective. Mr. Reade said the thought this was "a good idea" as tv distributors have a stake in the post-48 features, too. Mr. Marcus said sale of MPI stock to exhibitors has "accelerated tremendously" since the group announced it would attempt to obtain rights to post48 films. MPI was set up originally to invest in film company stock so that it would have a voice in policies of the firms. MPI officials concede that talks already held with film companies have been "exploratory" and "vague" since film organizations are uncertain of the move they should take with respect to post-48 films. N.Y. seeks dissolution of TelePrompTer The New York State Attorney General was granted permission last Monday (Jan. 25) to start legal actions aimed at dissolving TelePrompTer Corp., New York closed-circuit tv company, and Floyd Patterson Enterprises Ltd., New York, for attempting to exercise "monopolistic control" of last June's heavyweight championship bout between Floyd Patterson and Ingemar Johansson. An order was obtained from New York State Supreme Court Justice Samuel H. Hofstadter, permitting the state to begin legal proceedings to void the state charters of the two companies. TelePrompTer operated the closed-circuit tv showing of the bout. Patterson Enterprises is owned jointly by the BROADCASTING, February 1, 1960 79