Independent Exhibitors Film Bulletin (1952)

Film Profits Belie Doom Prophets Wha' hoppen? When the Department of Justice instituted its anti-trust action against the major film companies and demanded divorcement as the price for a decree, the industry heard dire warnings that the result of divestiture would be the destruction of the Big Five. It was said that these companies, bereft of their theatres, could never exist as film producing and distribution organizations alone. Profits, 'twas said, came only from theatre operations, not from film production. The facts are laughing at those prophecies of doom today. Four of the companies that have come to terms with the Government via consent decrees and have agreed to divorcement are thriving, with the film entity taking the long end of the stick, according to the profit statements. The recent financial reports from Loew's, Inc. and 20th Century-Fox provide the clincher. Loew's, last of the Big Five to come under the divorcement axe, in a proxy statement to stockholders which recorded profits over the past ten years, continued that trend — with a vengeance. In each of the past three years total profits before taxes have increased steadily and substantially even though theatre profits have declined Arbitration Talks Set For Mid-April Sessions The gears finally started to mesh. The No. 1 topic in the movie industry today — formation of an arbitration system — was set for conference between exhibitors and the film companies by the middle of April. If the distributors had any doubt about the exhibitors' eagerness to get an arbitration system started, it was quickly dispelled by the promptness with which the exhibitor organizations accepted MPAA president Eric Johnston's invitation to meet with the distributor representatives, chairmanned by Metro's William F. Rodgers. The MPAA's action followed by a few days Allied president Wilbur Snaper's blast at the distributors' "delaying" tactics in setting up the arbitration conferences. Johnston's letter sent on March 20, went to the presidents of five exhibitor organizations: Wilbur Snaper, Allied; Mitchell Wolfson, Theatre Owners of America; Edward X. Rugoff, Metropolitan Motion Picture Theatres Ass'n; Harry Brandt. Independent Theatre Owners Ass'n; H. V. (Rotus) Harvey. Western Theatre Owners. It asked that they name representatives to meet within 30 days with the distributors' sales managers' committee to "explore thoroughly" an arbitration system to present to their respective organizations and to the Department of Justice for approval. The two national exhibitor organizations, Allied and TOA, who had presented their arbitration proposals, immediately named their spokesman: Allied Snaper, Nathan APRIL 7, 1952 quite sharply. And for the first time since 1946, the film net surpassed the theatres take. In its breakdown of the figures contained in the proxy statement there are listed total profits before taxes, profits from theatre holdings in the U. S. and Canada, and "all other profits". While the latter designation covers Loew's income from radio stations, MGM radio attractions, MGM records, sale of accessories and sundry items, the bulk of this revenue, of course, was derived from film rentals. The trend from 1948 on is clearly indicated by the following figures, all before taxes: Profits from Loew's theatres for 1948 were $12,472,000, which with the company's LOSS METRO'S RODGERS The Doctor Said "No" Yamins of New England and general counsel A. F. Myers; TOA, Wolfson, S. H. Fabian and general counsel Herman Levy. 1TOA quickly followed suit with Harry Brandt and Max A. Cohen. Both MMPTA and WTA were due to name their representatives momentarily. Representing the distributors, in addition of $4,101,000 from all other sources brought the total net to $8,371,000. In 1949, the theatres maintained their level with $12,583,000, the loss from other sources was cut to $1,795,000, bringing the total profit up to $10,788,000. In 1950. the theatres dropped to $9,896,000, all other profits went into the black with $2,712,000, raising the total to $12,608,000. And in 1951, theatres dipped to $6,944,000, other income zoomed to $7,243,000, giving a total take before taxes of $14,187,000. Recapitulation of the ten-year period, with the first half giving the lion's share to the non-theatre activities, worked out to an even split of the total $201,837,000 earned before taxes. The theatres net was $100,978,000, all other income, $100,859,000. The 20th-Fox report published last week showed a total profit of $4,380,000, of which approximately half came from film operations. The division was revealed in a statement to stockholders by president Spyros P. Skouras, mailed with the company's annual financial report (Fox profit story elsewhere in News & Opinion). Skouras reported that $2,128,000 of the total net was film revenue and $2,180,000 was earned from theatre holdings, both after Federal taxes and all charges. to Rodgers, were 20th-Fox's Al Lichtman, RKO's Robert Mochrie and Columbia's Abe Montague. Serving as counsel are Paramount's Austin C. Keough, Warners' Robert W. Perkins and Universale Adolph Schimel. The film company representatives, with Rodgers at the helm, went into feverish preparations for the conference. Rodgers met with his committee the following day; Johnston, Paramount's A. W. Schwalberg and the MPAA's Joyce O'Hara and Ralph D. Hetzel, Jr., joined the confabs and set up Further meetings. The distributors' committee was due to present its own recommendations, in addition to reviewing the exhibitors' proposals. Rodgers Says 'No' To COMPO Post Despite 'Draft' Movement "Perhaps it is more important that Bill devote his efforts toward (the) establishment of a workable arbitration system for unless such a system is set up there may be no need for a COMPO." The quote above, which so aptly sums up the situation, is from Pete Harrison's trade paper. "Harrison's Reports". The "Bill" referred to, is, of course, William F. Rodgers, who pave an implacable "no" to pleas that he accept the presidency of the Council 'A Motion Picture Organizations despite one of the most fervent "draft" movements in the history of the business. The same reasons of health which forced Rodgers to relinquish his top distribution (Continued on Page 8)