Canadian Moving Picture Digest (Jun 19, 1948)

RAY LEWIS EDITOR AND PUBLISHER FILM BLDG. 277 Victoria St. TORONTO THIRTY-THIRD YEAR OF TORONTO, CANADA Vol. 40, No. 8 CANADIAN MOVING PICTURE 260 PUBLICATION 1915-48 June 19th, 1948 Can Paramount Sell Its Theatres To F-P? AMOUS PLAYERS Canadian Corporation is a subsidiary company of Paramount Pictures and is composed of partner-affiliates, and wholly-owned Famous Players theatres. Paramount is not involved, as a theatre circuit, in a foreign country, in the Divestiture Decree, at preseni being determined by the U.S. Federal Government, following the decision of the U.S. Supreme Court. Since a layman cannot give a legal opinion, we must confine ourselves within the limits of the law and remain within the law in any opinion we hold. The Divestiture proceedings involve five major companies, which are producer-distributor-exhibitor companies, and the Federal Government of the United States is dealing with the question of Divestiture, in relation to the operations of the defendants within the United States only. At the present time there is what is termed a status quo; the defendants are not permitted to sell, or to buy theatres, either to their partner-affiliates, or from their partner-affil— iates, nor are the defendants permitted to sell to any outside interests until the Federal Government arrives at a final decision in respect to its proposed decree. It may be that the status quo relates itself only to the United States, and does not reach into countries, which are termed foreign and in which the defendants may have subsidiary affiliated theatre circuits, and producer-distributing companies. We will deal with Canada, since Canada is closest to the United States, and we have in mind the Famous Players Canadian Corporation, a Paramount subsidiary company, and the various distributing companies which are operated by the respective Defendants in Canada. We do not know whether Famous Players Canadian Corporation would be interested in purchasing the theatre holdings, in the United States, of the Paramount company. We do not know whether Famous Players has sufficient finance to make such a purchase; whether payment would have to be made in American dollars; whether our Foreign Exchange Control Board would permit the necessary export of such dollars, but if Divestiture becomes operative, in a final decree, we do believe that it would be more advantageous for Paramount, Warners, Loew's, 20th Century-Fox, R-K-O Radio to sell their theatre holdings to their Canadian companies. We do believe that such sales would bring millions of American Dollars into Canada. and would be a most profitable venture for Canda, which our Government should encourage. Sufficient American dollars, for operational expenses, would necessarily remain in the United States, but the profits, less the payment of taxes, would come to the Canadian companies which would be in control. It may be that there are other countries to be considered, but since Canada is part of the North American Continent, and such a friendly and close neighbor, Canada should receive preference in a consideration of Divestiture. It all sounds fantastic, but no more fantastic than the recent Howard Hughes deal for R-K-O-Radio, whereby he purchased control of this company. It is no more fantastic than the Divestiture decree, should it become a final and obligatory decree. Your editor sees an Open Door into Canada, should the defendants involved in the Divestiture proceedings, be compelled to sell theatre noldings, and as a shareholder and a partner of Famous I would approve such a deal. —EDITOR. PUBLISHED BY CANADIAN MOVING PICTURE DIGEST COMPANY LIMITED 277 VICTORIA STREET TORONTO