The Exhibitor (Nov 1938-May 1939)

11a I * i >: WEEKEND HIGHLIGHTS WITHIN THE INDUSTRY JUDGE SIGNS RKO PLAN New York — Federal Judge William Bondy last week signed the amended plan’s approval order, thus bringing the RKO reorganization proceedings to and end. Creditors and stockholders who have accepted the Master’s Plan and their respective successors in interest have until February 4 to file notice of withdrawal. Otherwise, they shall be deemed to have accepted the approved plan. GAMES CLEANUP STARTS New York — New York City License Commissioner Paul Moss served notice last week that he will stop chance games on Staten Island, with the co-operation of theatremen. The campaign will include games in churches, fraternal organizations, etc. UA ADOPTS PLAN Los Angeles — Stockholders of United Artists adopted a reward for merit program known as "The Murray Silverstone Distribution Plan.” Plan gives to all United Artists producers, stockholders, independent producers alike, a reduction in distribution rates as box office value of their pictures increases. Plan is retroactive to January 1, 193 8. United Artists declared their current meeting the most harmonious and productive in history. From all producers and from all stockholders came enthusiastic, unanimous commendation of Silverstone. All the producers expressed themselves highly gratified. Said Silverstone: "This very flexible and equitable new distribution rating system is designed to give encouragement and support to all producers alike. Merit in film attractions will be the sole basis for increased financial advantages. Our company was founded on high ideals and impartial business policy. We not only wish to lend every encouragement to our present producers, but invite others with quality pictures to join our 'family’ on the same basis. We have no stepchildren at United Artists and our constant aim is not merely to maintain high production and distribution standards so long established, but to make advances in all phases of our business. We will not bring outsiders into our distribution system, preferring to promote and encourage those of our staff who, by performance, have earned more fitting recognition. "Our production program for the new season is still in the early stages of preparation, but there is already assurance (on the basis of pictures already finished or set for release during the first six months of 1939), that the business of the company will surpass any previous period in history. The immediate half year already compares most favorably with the entire twelve months of 1938 in business volume. There will be a decided increase in the number of pictures to be made this year, but the actual number is not determined.” James Roosevelt was elected Samuel Goldwyn’s director on the stockholders’ board, succeeding James Mulvey resigned. The others, all re-elected, were Mary Pickford, Dennis F. O’Brien representing Fairbanks, Charles Schwartz, representing Chaplain and Emanuel Silverstone, representing Korda. The executive group recognized the merit of Edward Small’s first two United Artists p ctures by voting an extension of his contract an additional three and a half years. LOEW’S EXECS WIN New York — Supreme Court Justice Louis A. Valente January 20 handed down a decision in the case of minority stockholders who had sued to enjoin profit-sharing contracts with 12 of its principal producers and executives. The decision approved profit-sharing and personal service contracts extending back to 1924 and exonerated the directors from all charges of fraud and mismanagement. In upholding the validity of past contracts the court pointed out that they had originally been made by the late Marcus Loew, had been approved by successive boards of directors, the majority of whom were disinterested and had the approval of the stockhplders, including stockholders who owned approximately 40 per cent, of the company’s common stock who had no interest whatever in the profit-sharing plan attacked by the minority stockholders. In his statement Justice Valente stated: "The evidence is replete with instances of lucrative offers received by these executives in an effort to lure them away from Loew’s, Inc., and I am convinced of the sincerity of Schenck’s testimony th t only way he kept his unique organization intact was by the payment of generous compensation. That this policy has been successful is indicated not only by the standing of the company and the profits which it has earned over the years, but by the testimony of every single witness, including that of the president of one of its chief competitors, who frankly stated that he would like to get this executive group for his own company and that their loss would be disastrous to Loew’s, Inc.” Regarding Nicholas M. Schenck, president, Justice Valente said: "In the last 10 years in which he has been the chief executive it must be conceded that his executive control has been of an exceptional character. So many other large concerns in the business went through reorganization or suffered other losses and passed through crises. Loew’s, in the worst period of depression, paid its dividends. "There is the undisputed evidence as to the scale of wages in the industry generally, the scarcity of talent to fill positions of producers and executives, and the intense competition among the companies for their services.” Justice Valente’s opinion adds a statement as to the importance of accountants in our business life today coupled with the admonition that they should be alert to ascertain and correct any improper practices which they may find to exist in the case of any corporations whose books they audit. After pointing out that there was no evidence that any accounting practice had been adopted merely in order to increase the profit paid under the profit sharing contracts and that the accounting practices were sound, the court held that four of the executives and the Thalberg estate should have their accounts with the corporation readjusted as to the items involving the Ohio and Chippewa Theatres in 1934, and the amounts paid to the Thalberg Estate since 193 6. The 1934 items, the opinion pointed out, resulted from a failure of the accountants, through legal misunderstanding, to subtract for profit sharing purposes the book loss which resulted from a reorganization of the Ohio and Chippewa Theatre properties. The other items resulted from not treating as a profit sharing loss the amounts paid to the Thalberg Estate in settlement of its claims against the corporation. As to these items, the court poined out, the company had made a mistake of law. The court said: "The other claims by the plaintiffs that the profitsharing account should be restated because of alleged improper accounting made in the computation of the corporate profits, are not well taken. There is nothing to show that there was a failure in the method of keepisg the accounts to conform to sound accounting practice in the industry.” Nicholas M. Schenck, president of the company, said: "I am, of course, delighted that the court has exonerated our board of directors, and that the profitsharing contracts have been approved. I can only repeat what I said in my letter to the stockholders on December 30, 1937, that 'I have no hesitancy in saying to the stockholders that, in my opinion, the approval of these contracts will be in the best interests of the company and its stockholders. I feel sure that none of our executives would desire to retain any money which they had received through mistake of law. However, we will have to be guided by counsel as to the correctness of the decision on that point.” GEORGE FELT PASSES Philadelphia — George T. Felt, pioneer exhibitor of Philadelphia, died January 22. He and his brothers were well known for many years in the business, and they built several of the city’s larger houses. WEEKEND PREVIEWS Coast previews included: Columbia’s "The Lone Wolf Spy Hunt,” with Warren William, Ida Lupino, Rita Hayworth (67m.), a better than average melodrama; RKO’s "Beauty For the Asking,” with Lucille Ball, Patric Knowles, Donald Woods (64m.), just a dualler; Universal’s "Code of the Streets,” with Harry Carey, Frankie Thomas, Little Tough Guys (70m.), a good top dualler, with the Tough Guys better than usual; Warners’ "Nancy Drew Reporter,” with Bonita Granville, John Litel (67m.), the best yet in th’ series; Paramount’s "Persons in Hiding,” with Lynne Overman, Patricia Morison, J. Carrol Naish (69m.), a surefire meller. Reports on new pictures, as relayed to the Jay Emanuel Publications, included the following: THE BEACHCOMBER (Paramount): At New York’s Rivoli, in its fourth week, did about $17,000 on the third week. DISBARRED (Paramount): At New York’s Criterion, did "fair business.” THE GREAT MAN VOTES (RKO-Radio): At New York’s Radio City Music Hall, with a stage show, did $49,000 from Friday through Sunday. JESSE JAMES (20th Century-Fox): At New York’s Roxy, with a stage show did the streettopping business, with $3 6,009 from Friday through Sunday. First 10 days take was $112,319, with 243,0 59 customers — the second best business in the history of the theatre. (First: "Alexander’s Ragtime Band.”) THE LADY VANISHES (20th Century-Fox— GB) : At New York’s Globe, did a good $7,500 week. NEWSBOYS HOME (Universal): At New York’s Central, did "big business.” PACIFIC LINER (RKO-Radio): At New York’s Rialto, did "big business.” PYGMALION (Metro): At New York’s Astor, did an estimated $1 5,000 on the seventh week, went into the eighth. THE SHINING HOUR (Metro): At New York’s Capitol, business was "just good.” THEY MADE ME A CRIMINAL (Warners): At New York’s Strand, with Leo Reisman and orchestra, did $31,000 from Friday through Sunday. ZAZA (Paramount): At New York’s Paramount, with Benny Goodman and orchestra, for the third week, did about $30,000 on the week. Band is generally credited for the draw. WEEKEND GROSSES January 25, 193?