Independent Exhibitors Film Bulletin (1956)

-9 FINANCIAL BULLETIN JUNE 25, 1 9 5 4 By Philip R. Ward UPSWING IN FILM BUSINESS. All available signposts point to a sharp up-turn in movie grosses beginning by July 4. It is now generally agreed that mediocre product, plus the absence of normal springlike weather conditions combined to deflate boxoffice over the past three months. Expressions of confidence began ranging over the entire dimensions of moviedom in the past week and even in the stock market film securities indicated evidence of perking up over their early June levels. It is now the consensus of informed industry leaders that the recession has scraped bottom, that seasonably hot weather together with a group of some 12 top-drawer films will lift summer business to normal, perhaps above normal levels. 0 BALANCE SHEET ANALYSIS OF MOVIEDOM. Let's for the moment close our eyes and imagine Hollywood's premiere picture maker is up for sale. Yep, the whole works — sound stages, equipment, properties, inventories, contracts. It's a venerable studio, rooted in the seedings of the industry, managed by capable folk, possessed of an enviable dividend and profits record. Of late, like most crafters of film product, it has had its troubles. Now let's project ourselves a bit further and imagine (in the name of literary license) we've been asked to join a select and esoteric little band of movie angels anxious to take control. Along with other individuals invited to participate, we are huddled around a great cherry-maple meeting table at one of the Waldorf's numberless conference rooms. The leaders of the discussion turn to the balance sheets. Now the accountants tell us the balance sheet is a financial representation of a company's position at one given point in time. Today, late June 1956, is for moviedom a critical point in time. So critical, indeed, it gives rise to the following colloquy: "I tell you they're asking too much, too much, too much. Past performances don't count for beans today and nobody knows it better than they do. Why do they want out? Answer that before you justify their price." Thus explodes the banking spokesman to our clique. Keen, hard-nosed, practical, he is less interested in last year's figures than in this year's facts. "Walter, we're talking assets, not earnings. I submit that in terms of the balance sheet entries the value is there." This is the promotor speaking, the wheeler-dealer who organized the syndicate and he is not one to be easily denied. He continues: "Assess the bricks and mortar; assess the backlogs; assess the properties. You talk about justification. I say we can justify every dollar we spend by turning around tomorrow and realizing every cent of equity in resale. That's my yardstick. Does my property have a market? I say it does." The money man counlB "I'm not here to purchase for liquidation. I'm here to H sider an earnings potential. I say this enterprise it witlH that potential. I say this enterprise is without enterprM Where do you stand, Mr. Investor? Forget figures, ifl the banker, forget past performance; forget equiB Ponder potential. Ponder the deeper balance sheet enlB reflected across the breadth of Hollywood's bo<B Ponder the intrinsic debits and credits and give us )M answer. You've got the dough. Investment opportunifl run rampant across the economy. Would you go HcB wood? Survey the following balance sheet and givejj your answer. It's entries, in our judgment, represent e sum and substance of moviedom's major assets and lial • ties today : DEBITS: 1) Absence of confidence. 2) Absence of excitment. 3) Absence of good taste. 4) Absence of risk-taking temperament. 5) Absence of a dynamic, unfolding technology. 6) Absence of recruitment of fresh, young talent at m.-l agement and production levels. 7) Over-exaggerated opinion of competition, especi;p; TV. CREDITS: 1) Basic appeals of the medium, uppermost of whiclsi its existence as the least expensive, most gratifying en • tainment experience outside of the home. 2) Historic resiliency of filmdom; i.e., the oft-repeal ability to snap back from the lip of oblivion. 3) Genius of improvisation and showmanship, attribusi so lacking in competitive media. 4) The Hollywood legend, which perpetuates the indi4 try as an enduring American institution. 5) Volatile stock market history, which establishes 1 dustry shares as forever interesting to bearers of rl capital. 6) Inherent ability to tell a story more adequately tl any communicative media yet engineered by man. 7) Rise of leisure time, an economic condition play J expressly into Hollywood's hands — provided its leads show the patience to hold out — and a factor expressly cl trary to TV's ambitions. Would you buy in? We would !