Independent Exhibitors Film Bulletin (1963)

FINANCIAL REPORT Advice To Investors: Product Is the Key; Witness Paramount The volatile, chameleon-like character of motion picture business puzzles and sometimes distresses our friends in Wall Street. They find it difficult to comprehend the swift changes taking place in the fortunes of movie companies from year to year, and even from quarter to quarter. Paramount Pictures is a case in point. Once endowed with gilt-edge status in the speculative world of film shares, Paramount has fallen into a slump in brokerage house esteem. This was never more apparent than in a recent telephone inquiry put to Film BULLETIN by a New York investment firm surveying film prospects in the months ahead. When Paramount was cited as one of the best prospects for the second half of the year, the researcher said, "We regard investment dollars as quite safe, of course," said he, "but is there really sufficient strength there to restore earnings to the level of their better years? Can the reversal take place that fast?" This is characteristic of those who evaluate this business in terms of the orthodox tools of security analysis. Movie business is not so much a business or an industry as it is a function of showmanship and promotion on a picture-to-picture basis — each picture a fiscal entity in itself. In showing its first loss in 25 years in 1962, Paramount remained long on its traditional good fiscal management, but short on the showmanship entities. For this reason, perhaps, its loss was less severe than it might have been. This summer, the company has the best all-around product of any distributor. President Barney Balaban told the annual meeting on June 4 that he anticipated a "very improved" second half. Agreed. Earnings should be exceptionally good, one of the best six months for Paramount in many years. The strong grosses of "Come Blow Your Horn," "Hud," "Donovan's Reef" and "The Nutty Professor" support this view. It just goes to prove once again that product is the key. And right now Paramount has got it. UA Theatres, 7 Arts Feel Sting Of Dissident Stockholder Groups Disaffected stockholders in the past week set the waters to bubbling, if not to boiling, on two corporate fronts. In each case, the insurgents are deep in shares, steeped in wealth and heavy in fellow dissidents. For the present, at least, they do not appear to be deep enough. Maxwell Cummings is leading an attack upon United Artists Theatre Circuit, Inc., which promises to erupt into a bloodletting proxy struggle by time of the annual meeting in December — and perhaps sooner. Cummings, a director of U.A. Theatres, together with his associates has established a group known as The Stockholders' Committee for Better Management of United Artists Theatre Circuit, Inc. This body has petitioned the theatre chain for a special shareholders' meeting to be called August 20 to consider replacing 11 of the company's 12 directors. The dissident committee has named six candidates of its own so far. The nominees are Billy Wilder, motion picture director; Walter Reade, chairman and chief executive officer of Walter ReadeSterling, Inc.; Jerome K. Ohrbach, recently resigned as president of Ohrbach, Inc., the New York department store; Nathan M. Ohrbach, chairman of Ohrbach, Inc.; Lester Osterman, Broadway theatre owner and producer; Joseph H. Flom, a New York attorney. A letter soliciting proxies from shareholders, mailed in early August, makes the following charges against management: downtrend in earnings, culminating in loss from operation for last fiscal year; a nine year dividend hiatus; a minus working capital position; deterioration in the market value of the company's stock. As of this time, the complexion of the U.A. Theatres board would appear to forestall the granting of a special shareholders' meeting — and hence a postponement of the showdown until the December meeting. Moreover, there is some doubt that the dissidents control as many shares as reported. The annual meeting of Seven Arts Productions, Ltd. revolved into a merry flap as management came under fire for buying a 20% interest in a land development company in Grand Bahama Island. Angered minority interests, led by counsel for major stockholder M. Mac Schwebel, blasted the transaction, contending the company would be better off by expanding its resources within the entertainment industry. Louis Chesler, a Canadian and chairman of Seven Arts, owns an 8% interest in Grand Bahama Development Corp. Management prevailed, but the acrimony that marked the tumultous meeting left wounds that may fester into more corporate difficulties. These were the first cases of organized shareholder opposition to management in the movie industry in a number of years. FILM & THEATRE STOCKS Film Companies Close Close 7/18/63 8/1/63 Change ALLIED ARTISTS ■ ■ 3% 2% ~ % ALLIED ARTISTS (Pd.) ... 91/4 93/8 + % CINERAMA 14 133/4 % COLUMBIA .24% 233/4 Vl COLUMBIA (Pfd.) -.823/8 81% 7/8 DECCA ...45% 45% DISNEY ...38i/8 383/4 + % FILM WAYS ■■• 7% 6% % MCA 55 543/4 % MCA (Pfd.) ...36% 36% % M-G-M ...28% 281/z PARAMOUNT 39i/2 433/8 +3% SCREEN GEMS ...211/4 2iy8 % 20TH-FOX ...28V2 293/8 + Vi UNITED ARTISTS ...24% 231/8 -1% WARNER BROS ...13% 131/8 3/4 Theatre Companies * * * AB-PT ...29% 29 % LOEW'S ...18% 183/g NATIONAL GENERAL ...11% 11% STANLEY WARNER ...21% 2IV4 ~ % TRANS-LUX ...Hi/4 A sfe 12% + 1% (Allied Artists, Cinerama, Screen Gems, Trans-Lux, American Exchange; all others on New York Stock Exchange.) v 9 9 7/18/63 8/1/63 Over-the-counter Bid Asked Bid Asked COMMONWEALTH OF P.R. .... 6% 7% 63/8 7y4 GENERAL DRIVE-IN ... .103/g 11% 10 n MAGNA PICTURES .... 21/4 2% 2% 25/8 MEDALLION PICTURES .... 83/4 93/4 83/4 93/4 SEVEN ARTS .... 7% 8% 73/4 8% UA THEATRES 12 131/8 131/4 143/8 UNIVERSAL No quotation 63 68 1/2 WALTER READE-STERLING . ■ • 23/4 3i/4 25/8 3 WOMETCO ....24i/2 261/4 24 25% ( Quotations courtesy National Assn. Securities Dealers, Inc.) Page 10 Film BULLETIN August 5, 1963