Independent Exhibitors Film Bulletin (Sep 1935 - Aug 1936)

WEDNESDAY, MAY 6, 193 6 5 Settlement of St. Louis Case Held Complete Victory for Gov't and F & M PLAINTIFFS WIN CONTROL OF THEATRE KENNEDY NAMED SITUATION; GET PRODUCT FOR 10 YEARS PARA "ADVISER" The protracted litigation brought by the Government against Warners, RKO and Paramount for allegedly engaging in a monopoly conspiracy to "freeze out" Fanchon & Marco in St. Louis has finally ended in an out-of-court settlement, effected last Thursday, when Federal Judge John C. Knox signed the stipulation which had been agreed to by all parties concerned, including representatives of the Department of Justice. The terms of the settlement represent what is undoubtedly a complete victory for the plaintiffs. Apparently convinced that the Government would pursue the case relentlessly from every possible angle until the defendants capitulated and that their legal bill, which is understood to have reached the million dollar mark already, would reach grave proportions, officials of the three film companies conceded terms that surprised everyone. GET THEATRES, FILM . . . F & M assume control of 20 theatres hitherto operated by Warner Bros, in St. Louis. This eliminates Warners from the theatre field there entirely. In addition, they obtain 10 year franchises on all Warner and RKO product. Paramount, while refusing to agree to an actual franchise, obligated themselves not to refuse to sell F & M during the same period for any other reason than price differences. The conditions take effect immediately, F & M taking over the Warner houses and the film companies selling them product for the balance of the current season. The terms on which F & M acquire the Warner theatres are regarded as very reasonable. GOV'T POSITION . . . Speculation is rife on what the Government's position will be in the future as regards the film industry. Hundreds of complaints from exhibitors throughout the country have been filed with the Department of Justice and film and theatre men are wondering how the Department will dispose of them. The satisfactory settlement from the plaintiffs' viewpoint of the St. Louis case is almost certain to lead to louder demands from other complaints for similar handling of their cases. Decision must be made either to pigeon-hole them or take action and a jittery situation will prevail in the industry until the Government makes up its mind. CONN. INDIE UNIT MAY JOIN ALLIED New Haven. — Although no formal invitation has yet been extended to them, the recently organized Independent Theatre Owners, group which broke away from the M.P.T.O. as a protest against its connection with the M.P.T.O. A. is understood to be planning to join the national independent exhibs' organization. Nathan Yamins, president of Allied, addressed the unit two weeks ago and is believed to have held an informal discussion with the leaders at that time. The Connecticut indies will be asked to attend the annual Allied convention at Cleveland, May 3-5, to watch the body in action, it was stated by Yamins. TO CUT COSTS . . . Joseph P. Kennedy's experience in the fields of finance and film business will be utilized by Paramount in an effort to correct the mismanagement that has sent the company's production costs up and the quality of the product down. Kennedy, former head of the Securities & Exchange Commission, was appointed last Friday by the board of directors "for the purpose of making a survey" of the muddled production situation and "to report and make recommendations," according to the statement issued by the board. He bears the title of "special adviser." In his statement, Kennedy declared, in part: "I have been called into the situation by the unanimous vote of the directors and officers to give such help as I may to a company that has a great potentiality, but which recently has had rough sledding." In his role, which is equivalent to "a committee of survey and policy," Kennedy will investigate the company's failings and recommend changes as he sees fit. ZUKOR BACK IN . . . While there was no intimation that any changes will be made in the authority of the present officials, it is regarded in many circles as certain that Adolph Zukor has regained his old supremacy, at least in the production branch, and that Kennedy's appointment virtually spells the demise of John Otterson's influence in shaping Paramounts future policies. It has been almost since the beginning of Otterson's tenure as president last year that studio costs started to mount, without any improvement in the quality of the product. In recent months, Zukor has assumed charge of production and a slight betterment was shown. Otterson came to the company from Electrical Research, to whom Paramount was heavily indebted, at the time the company was reorganized last Spring. Kenned)' headed F. B. O. Pictures, later going to Pathe. He recently prepared a plan for recapitalizing the Radio Corp. of America. Kennedy IVSay Engineer Para-RKO Merger Special to FILM BULLETIN HOLLYWOOD, May 5. — Informed persons view revival of the oft-reported, but lately dormant, merger negotiations between Paramount and RKO as a corollary to Joseph P. Kennedy's new connection with the former company. Kennedy is regarded as the man who could engineer the consolidation and, of even greater importance, avoid a possible tangle with the Federal Government when the projected merger is ready to be consummated.