The Canadian Independent (Feb 1, 1938)

Feb, 1, 1988 THe CANADIAN: UN /SCUED FOR THE BENEFIT OF Wes /NDEPENDENT THEATRE OWNERS SS ie aR RIE RARER RET Se DENDENT™ PATRONIZE THE ADVERTISERS WHO MAINTAIN IT. 772 CANADIAN LICENSE AGREEMENT REVIEWED By Harold Kay and Ben Ulster (Press Com. ITA) CANCELLATION When an exhibitor buys a contract, he buys a pig in a poke. He doesn’t know how big the pig is going to be, whether he’ll be black or white, fat or lean. In fact he knows nothing about the animal. He has to buy him blind, undertake to pay a definite price for him, and leave the outcome in the lap of the Gods or to the tender mercies of an _ arbitration board. Now the fellow selling the pig, the distributor, he is not quite so soft-headed. Faith, he knows, has no place in business. And good business practice dictates that he get the ultimate protection for himself in all transactions. He reminds us of the big meat packer who boasted that his plant was so efficient that everything but the squeal of the pig is made use of. The film distributor goes him one better in efficiency. His pig doesn’t even waste the squeal, it is the exhibitor generally who does the squealing, and it does him as much good as the last shrill protest does the animal lead to the slaughter. _ The Crack in the Slaughterhouse Door In a previous article on the Canadian License Agreement we treated the “if available” clause, the clause that lets the distributor out of delivering what he sells if he so chooses. Now we are concerned with the slight crack in the door left open for the _ exhibitor. This erack is called ‘“cancellation.’’: Not all exhibitors get the cancellation privilege. EXHIBITORS BUYING ON CONTRACT SHOULD DEMAND A REASONABLE CANCELLATION PRIVILEGE AND TAKE MEANS TO PROTECT THAT PRIVILEGE. We will try to point out some of the pitfalls along the road of securing an effective cancellation clause, and make a few suggestions as to how you may put your foot in the crack left open to hold that slim advantage. Often the door is slammed shut in the exhibitor’s face at the first step he makes to use the cancellation privilege. Cancellation Pro Rata In the first place, where cancellation of a definite number of pictures is agreed on at the time of the sale, let us say six pictures are allowed out of forty, the exhibitor should make certain that the cancellation privilege is operative throughout the contract. Often the wording of the clause is such that the exhibitor can begin to use the privilege only after he has accepted a certain number of pictures. This often results in defeating the purpose of the clause ‘entirely, thus: If the buyer cannot cancel a picture until he has used thirty of the forty pictures bought, and only thirty pictures are released by that exchange, he has had no opportunity to use his power of cancellation and never will have. This, by the way, is a device frequently used by exchanges to nulify the privilege of exhibitors to cancel pictures. Drained Product Value The privilege to cancel a portion of a contract is very essential to the successful management of a motion picture theatre. If an exhibitor must buy blind, with the product designated only by means of a series of numbers, he may be fairly certain that a portion of that product may not be suitable as to subject matter or price for his particular needs. If he is bound by his contract to play all of the product of that exchange, he finds himself at times, trying to sell goods not wanted by his particular customers, at a price that means a loss to his business. This is particularly true of neighborhood theatres where the district is serviced also by first and second-run theatres playing the same pictures, If a_ successful feature or special picture is given extended running time in a previous house, the value of that product is almost completely drained. If the exhibitor of a subsequent house is forced by his contract to buy this picture at a high price, despite his own judgment, he is in a position that no other retail merchant finds himself in. No other wholesale merchant has the right to force the purchase of high-priced goods on a small merchant who cannot gainfully market that class of product. Most MGM contracts are bought without the cancellation privilege, (except by circuits that can demand advantageous terms.) Now, MGM _ product is the lifeblood of any theatre, and it must be had if the exhibitor is to give his patrons a wellrounded program of entertainment. But even MGM occasionally shoots a blank and exhibitors who have a no-cancellation contract are forced to pay for producers’ mistakes. Nobody should have had to play ‘General Spanky’ contract or no contract. Cancellation of Lower Categories When cancellation is being granted, the privilege is confined to product in the lower categories of price only. Generally a number of the pictures designated to the lowest category are not delivered, and of those delivered in the next-lowest category, a number may be cancelled, therefore an exhibitor finds himself paying, on the average more for his | product than he figures when averaging the entire schedule of prices. It is well for him to take this into consideration so that he will know in advance that his average picture cost will be higher than appears at the time of purchase. Term of Contract There is one right with respect to cancellation that the exhibitor has, that few exhibitors are aware of. And it may mea::,™money in in your pockets to dig this. Picture contracts are bought and sold for one year in spite of the fact that some contracts provide an 18-month period in which delivery may be made. Now, delays in releasing often force the exhibitor to go into the open market for product to fill in gaps in his program. Frequently, after such purchases are made, exchanges will make avail(Continued on Page 4) New and Re-Built Theatre Chairs Vv Alterations, repairing, recovering, remodelling, upholstering. Stage Curtains & Drapes, Slip Covers. Bring your seating problems to us. Your chairs remodelled with new 36 De Luxe No. 200 Canadian Made. spring ‘AERO’ cushions and ‘RUBBER EZE’ arm rests. ASK US. Canadian Theatre Chair Co. | 277 VICTORIA ST. TORONTO, ONT.