Independent Exhibitors Film Bulletin (1963)

DARRYL F. ZANUCK FINANCIAL APPRAISAL The Outlook for 20th-Fox In the 'Cleopatra' Era The excitement over the premiere of "Cleopatra" was not confined to the public and the critics alone; it was just as keenly observed by the financial community. This appraisal of 20th CenturyFox's financial picture within the frame of its $38 million blockbuster is for those readers contemplating the company as an investment. By PHILIP R. WARD Without dismissing one jot of the impact Cleopatra will have upon the earnings of 20th Century-Fox during the next two or three (and more) years, let it be stated immediately that we do not regard this film as crucial to the company's stability Undoubtedly, the degree of success the film enjoys (there is no point in discussing possibility of failure) will influence strongly 20th's intermediate, and even long term, earnings. The company's current position already has been handsomely enhanced to the extent of some $20 million in advance payments by 70-odd theatres throughout the world. But other factors beyond this one huge venture must be considered in any perspicacious appraisal of 20th Century's future. The importance of Cleopatra has been duly noted by Wall Street and estimated to an overriding degree. Last year it anticipated the total demise of 20th Century-Fox at the lovely hand of the Queen of the Nile, and the stock sank to a low of near 15. Bolstered by the quiet confidence and business-like management of the new president, Darryl F. Zanuck, the buyers got back in and early this month the shares were valued on one trading day at $37. As the Cleopatra premiere approached, the Wall Streeters acted as nervous as an ingenue facing her opening night debut. On Monday, June 10, the day before the film was first revealed to the critics, 20th stock was quite active and closed up ll/g. Tuseday was a day of anxious waiting and little change. June 12th, folowing the press previews (undoubtedly attended by representatives of many important Wall Street firms), came the deluge. The stock sold off two points on volume of over 58,000 shares, and the decline continued, down a total of six points to $29 on June 20. Apparently, brokers and investors were frightened by several unfavorable reviews: the Herald Tribune's acidulous Judith Crist called the picture "a monumental mouse"; one of the wire services was unkind; Time and Newsweek were cool. Wall Street paid more attention to the ripple of pans than to the flood of praise, including a rave review by the highly respected and influential Bosley Crowther of the New York Times. Had the financial crowd troubled to checked the effect of the reviews on ticket sales at theatres, they would have relaxed. We checked. Within a week after the critics had their say we phoned six premiere theatres — RKO Pantages (Los Angeles), Music Hall (Boston), Warner (Washington), Loew's Ohio (Cleveland), Stanley (Philadelphia), and the Rivoli (New York) — and each reported a sharp increase in advance sales for Cleopatra. This information apparently percolated through the Wall Street grapevine: on Friday (21st) the price of 20thFox jumped iy8. We predict the rise will continue, subject to the vagaries of the general market. This opinion is not based, however, solely on the undisputed drawing power of Cleopatra, which, incidentally, has been enhanced, we believe, by the post-preview scissoring of some 22 minutes from the lagging second half. Our optimism about the company's future derives even more from other factors, principally its management. In Darryl Zanuck, 20th Century boasts the most knowledgeable and experienced film man heading any film company. In his less than one year as president he has also displayed first-rate executive acumen. The chaotic condition of the studio was quickly remedied by shutting it down for a while, cutting off the waste, then reopening it when a production program was blueprinted. Under the management of young Richard Zanuck, a competent movie maker in his own right, and under the watchful eye of DFZ, we look for the 20thFox studio to be one of the front-rank sources of film supply within a year. Other economies were effected to help the company show a profit of $2,292,945 for the first quarter of the current year on gross revenues that declined by over $9 million from 1962's first three months. The key element in the improved earnings situation is Zanuck's war epic, The Longest Day. This superb film was a powerful grosser in its lengthy roadshow runs, and now we hear glowing reports from theatres which are just starting to show it for extended general release engagements. We venture the opinion that The Longest Day will be the biggest grossing film of the summer and fall months. On this assumption, plus the income from Cleopatra and the boxoffice potential of two other forthcoming releases — The Leopard (Burt Lancaster, Claudia Cardinale), winner of the Cannes Film Festival award, and Condemned of Altona (Sophia Loren, Maxmillian Schell, Fredric March, Robert Wagner) — it appears safe to predict that 1963 will mark an astounding turn-about in the fortunes of 20th Century-Fox. With much of the enormous cost of Cleopatra written off, a $17 million loan from Chase Manhattan Bank paid off since Zanuck took over, and a juicy $20 million tax loss carry-forward at hand to offset income taxes for the tiexl few years, prospects look bright, indeed. 20th Century-Fox is very much a live film company . Film BULLETIN June 24, 1943 Page 9