Independent Exhibitors Film Bulletin (1956)

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FINANCIAL BULLETIN AUGUST 20, 1956 By Philip R. Ward THE TURNING OF THE CORNER (continued). Slowly but inexorably moviedom is rounding into profit-making form. Recent workouts have proved sensational. For instance : a) A report by Sindlinger & Co., amusement industry market analyists, asserts that attendance at motion picture theatres during the week ended July 28 totalled 82,399,000, the greatest single seven-day figure since Thanksgiving week, 1946. We appraise this estimate as being somewhat exaggerated, but even a figure of 70-75 million is mighty healthy. b) The Sindlinger report further reveals that overall July attendance ran just 2.2% under the same month's attendance one year ago. Considering the moribund circumstances which have invaded the industry in the interim, July 1956 attendance represents a noble achievement and a magnificent rally in the face of conditions immediately preceding the summer. c) In many sections of the nation, July's steadfast recovery was accomplished without aid of moviedom's quarterial patron saint, Old Sol, himself. According to information from U.S. weather agencies, most of the east, southeast, south-central and mid-central states shivered through the second most sub-normal July in 37 years. If the significance escapes you, be informed that industry pundits universally— this observer included — accept as gospel the canon that moviedom must make its profits when the fahrenheit is high. The point is therefore taken that perhaps the virtues of films rather than the virtues of climate have more than a little to do with controlling b.o. d) Encouraging to moviedom, too, is a condition far divorced from its control, namely the incisive reaction by top television critics to this summer's video fare. Incisive is possibly too mild; acrid is more like it. From Gould to Crosby to the national weeklies, friends all of the electronic tube, has poured forth an uncommon flow of spleen against what one commentator calls "a retrogression to the point of Holly-woodheadedness." With good puns we don't argue — besides a birch-like timber has been hesrd descending upon more than one cinema skull. We argue "retrogression." You're not witnessing retrogression, fellows, you're witnessing the strange form of progression that seizes an art medium after it has said everything it can say, do everything it can do. Perhaps TV's well is beginning to run dry. Like Hollywood before wide-screen, it rnust prospect after untaooed production resources. It is now, while TV's geo-physicists stake out new fields, that moviedom enjoys a fresh opportunity. O Such is the most farraginous of hopeful items to buttress our belief in a steadily improving economic status for the movie business. Taken together with tax relief on admissions up to 90c, the outlook brightens perceptibly. As aiways, most everything pivots on product, both in number and in fettle. Given its share of top-drawer merchandise, the industry can prosper; be it otherwise, the industry will slide. No law, moral or economic, supercedes that truth. It is irrevocable and absolute, and holds come rain, shine, revolution or Elvis Presley. O O BOND, RICHMAN & CO., a New York investment firm, has made out a searching case for Columbia Pictures ($22), which it considers vastly underpriced. In a forward to its survey, it states : "In a quarter of a century of growth, Columbia has grown from a small, insignificant film producer to a position of leadership in the industry. It now ranks as the fourth largest company in its field. Within 25 years, its gross annual revenues have soared by approximately 900%, whereas the income of the leader of the motion picture industry, Loew's, Inc., has risen only 36%. Nevertheless, Columbia common stock is selling for less than 5 times annual earnings, while Loew's commands a price which is 22 times annual earnings." Bond, Richman goes on to project Columbia prospects should that company catch up to the various financial ratios prevailing in the industry. "If Columbia common stock were to sell at a price 13 times earnings (the price-earnings ratio of competing equities) it would rise to a price of $57 "In order for Columbia's dividend of $2.15 to represent a yield of 5.6% of selling price (the dividend of competing equities) Columbia's common stock would need to rise to $38 "If Columbia shares were to sell at 104% of book value (the average selling price of competing equities is 104% of their book value) it would need to rise to a price of $29 "If Columbia common stock were to sell at a price which was 172% of its working capital equity per share (competing shares are selling at an average price which is 172% of working caoital equity) it would need to rise to a price of " $39" The average of the four above "target" figures is $40^. While Bond, Richman doesn't anticipate an immediate rise to this level, it feels that due recognition of Columbia's •"impressive progress", together with discovery of its undervaluation will eventually bring this company into line with representative shares in its field. Film BULLETIN August 20, 1956 Page 11