Independent Exhibitors Film Bulletin (1962)

FINANCIAL REPORT Rackmil Predicts Big Year; Questioned on MCA Merger Long-awaited word that a merger between Decca Records (Universal parent) and MCA is in the offing, and disclosure that both U and Decca are headed for vastly improved fiscal years, the latter the "biggest" in its history, were highlights of annual meetings of the two companies last week in New York. Chiefly on the strength of Universal theatrical product, which he said "it can be assumed will do great business," President Milton R. Rackmil predicted a better year for the film company and the best yet for Decca. Decca's first quarter, ended March 30, hit record earnings (estimated) of $2,137,000 ($1.65 per share), compared to $963,815 (75c) in the similar span a year ago. It looms as a long stride toward surpassing the highest yearly Decca figures: $5,524,757 ($4.29) in I960. At the Universal session, Rackmil offered a "conservative estimate" that the firm would finish the first half of the current fiscal term (April 28) with earnings of $3,400,000 ($3.75) —13 per cent better than U's entire previous year, and far ahead of the $1,835,000 ($1.98) in the first half of last year. In revealing developments in his talks with MCA, Rackmil noted: "It became increasingly evident that since the activities of the respective companies are not competitive, their integration would be highly beneficial to each of the operating companies. There would be no overlapping. Instead there could and would be greater development and use of talent and personnel in all phases of phonograph record, motion picture and tele mi ion. There .ire \arious possibiljJ xhange of MCA stock for DecJ now. The next step is for MCA tal vision production and distrib ties, one of which is an exch< stock. That is where we are now. 1 he next step is tor mla to submit its offer. My guess is that it is imminent and may be any day." Both meetings were enlivened by the demand of Aldo Sand, Buffalo stock analyst and attorney, that U and Deed merge "outright" to correct the poor treatment the former! stockholders allegedly now are getting. In reply, Rackmil said there "is no intention to merge Decca and Universal." Sand, who reportedly represents in excess of 25,000 Decca shares, and over 10,000 shares of Universal, threatened to sue should therl be a "misuse of Decca stock in the event of a merger will MCA." On this basis, Rackmil refused to answer charges made by the Buffalo shareholder at the Decca session in the aftea noon. Sand told Film BULLETIN that he intends to pursue his position on the grounds it is logical and advantageous to stodJ holders of both companies. Another prominent questioner was Walter Reade, Jr., prea-l dent of Reade Theatres, who asked Rackmil if he was certaa that the MCA-Decca tie-up would be legal. Rackmil replied there had been "no exploration of this" and none was con templated "until an offer by MCA is made. We have nothing to explore until we have a deal." Reade implied that the Department of Justice might block the intended merger. Movies Decline en Masse, As Market Slump Continues Movie stocks declined sharply en masse, in line with the gen erally depressed situation that culminated at deadline in th biggest break in New York Exchange prices in over six month! Of the eighteen cinema issues covered, 16 were down over the ( Continued on Page 16 Market Analysts See Movie Shares Sound* Veraina on Strong tonue-btMck The present depressed state of motion picture stocks generally is due to "outside" conditions, rather than to any particular factors within the industry. This considered opinion was conveyed to Film BULLETIN last week by several prominent security analysts specializing in the movie market. "We find no basic disenchantment with movie shares", declared Robert P. Bingaman, Jr., of Hayden, Stone & Co. "They have merely been carried down with the tide." David Bell, of Gruss & Co. expressed the view that movie stocks "generally are oversold". He predicted the possibility of a rally in the very near future. "We see the likelihood of a fairly good rise from present levels, if only for technical reasons." "The motion picture industry is very much alive and will improve", in the opinion of Fred Anschel, analyst for Shearson, Hammill & Co. A rally is imminent, he said, and suggested that "an investor can do very well in certain film industry issues if he studies them carefully." Another spokesman for a prominent brokerage firm blamed the overall market decline for the sell-off in movie shares. "Despite 20th-Fox's troubles and M-G-M's temporary setback, the industry is in very healthy condition as compared to a few years back", he said. "Any on5 of the film companies can turn a profit of millions with a single attraction these days. While that might be construed as speculative thinking, those who observe movie production closely are aware of a very imposing array of 'blockbusters' being readied for distribution within the next six months, and almost every one of the important companies has one or more of these big shows in its program. Of course, the investor must analyze each outfit individually, but I think the whole industry is on a pretty solid foundation. And I mean to include those theatre companies that have spun off their marginal operations and gone in for some sound diversifications." John D'Alessandro, of Pershing & Co. declared that Wall Street generally is bullish about movie issues. In discussing specific issues, he pointed out Decca (Universal) and United Artists as favorable prospects. While the former's pending merger with MCA offers Decca shareholders a lagniappe, Mr. D'Alessandro took the view that the basic strength of this issue resides in Universale strong lineup of films. He is giving United Artists a closer look as "an improving outfit that can be recom (Continued on Page 19) Page 10 Film BULLETIN April 16, 1962