Independent Exhibitors Film Bulletin (1963)

FINANCIAL REPORT "HAPPY ENDING" FOR HOLLYWOOD Control of Production Costs Seen Stabilizing Film Industry Stabilization of production costs on a businesslike level is the principal issue facing the film industry, says The Value Line in its current analysis, and if it can conquer this problem, "a oncepat Hollywood happy ending might be in the making." The investment survey, published by Arnold Bernhard & Co., recites the history of the industry's problems following the 1948 anti-trust decision and the subsequent development of television as its most formidable competitor. While some of the earlier "blockbuster" films gave movie business a counter weapon against TV, the runaway costs induced by reckless, extravagant competition for talent and story properties brought certain of the film companies to the brink of ruin. Citing "Cleopatra" and "Mutiny on the Bounty" as prime examples, Value Line says "the grossly uneconomic manner in which studios subsequently pursued the 'blockbuster' panacea soon destroyed its essentia! validity." It is now becoming apparent, the analysis reports, that the film companies recognize the need to practice sensible controls over production costs. If this is accomplished Value Line believes the industry "can look forward with some justifiable confidence toward immediately ensuing years", based on the following factors: "Average weekly movies attendance, boosted by a growing teenage and young married population has been trending irregularly upward from 39 million in 1958 to probably 43 million this year. "Box office receipts have simultaneously advanced sharply to over $1.4 billion, doubtless bolstered by higher admission charges. "Equally important, additional construction of indoor theatres has been occurring in recent years * * * New construction of indoor movie theatres by objective, independent businessmen is, in our opinion, significant in direct proportion to its magnitude and persistence. "The quality of the Hollywood movie, according to most leading critics, continues to improve year-by-year. While somewhat ■j intangible and totally subjective, such critical judgment exerts | an influence on a meaningful segment of the movie-going public. "Movie producers and distributors have not only survived f television, but — led by Warner Bros. Pictures — learned how to exploit this medium through profitbale TV program production and syndication, and lucrative sale or rental of old feature movies. Today all major Hollywood movies studios have impor|i tant television interests, and judged by prevailing trends, will have enlarged these interests handsomely by the 1966-68 period. "*■*** The fruition of MCA-controlled Universal Pictures' plans to produce feature length movies for NBC-TV, and National -;| General Corporation's attempt to draw people into theatres via the projection of closed-circuit color TV programs on movie house screens could well hasten this once unimaginable marri|f | age of Hollywood and television. "Finally, we believe that the recent court decision permitting Uj National General Corporation to combine motion picture pro1, duction and theatre operations for a 3-year trial period augurs well for the possible eventual return of Hollywood producers lj and distributors to the exhibitor level. "Thus, far from being 'out', Hollywood appears to have been 1 1 only knocked down. Now on one knee — Hollywood may indeed JU be in the process of arising to a weakened but formidable battle h stance." Allied Artists Shows $2.7 Million Loss A surprisingly high loss, $2,747,549 net, was reported by Allied Artists for the fiscal year ended June 29 1963. This is equal, after payment of preferred dividends, to $2.97 per share on the 931,608 common shares outstanding. The loss in 1962 was $1,580,000, $1.73 per share. (Film BULLETIN had estimated in its Aug. 5 issue that the company would show a loss this year 'in excess of $2 million".) Gross income amounted to $18,001,988, compared to $14,434,872 for 1962. AA president Steve Broidy informed the stockholders that the loss was "caused by the failure of a number of pictures to return their cost, due to sharp changes in market tastes." This made it necessary, he stated, to write off approximately $1,000,000 "in order to state the inventory at realizable values." An additional $572,000 of unabsorbed studio overhead was charged off. A further adjustment placed $376,000 in reserve to cover a claim of the Internal Revenue Service for additional income taxes for the years 1949-57. This is being contested by the company. Broidy said "55 Days at Peking", the Samuel Bronston production, "is fully expected to rapidly return our negative cost advances, yielding a very substantial distribution income." He also expressed the view that "Soldier in the Rain", starring Jackie Gleason and Steve McQueen, "will contribute importantly to this year's results". FILM & THEATRE STOCKS Close Close Film Companies 9/26/63 10/10/63 Chang ALLIED ARTISTS .... 23/g % ALLIED ARTISTS (Pfd.) .... 7% 7% CINERAMA ...I6I/4 151/4 -1 COLUMBIA .,..24% 24 % COLUMBIA (Pfd.) ...821/4 83 + 3/4 DECCA ...451/2 45V2 DISNEY 42 453/g + 3% FILM WAYS . . . . 63/4 73/8 + % MCA ...631/4 603/8 -2% MCA (Pfd.) .38% 383/4 % M-G-M ...3iy4 301/2 3/4 PARAMOUNT ....48% 473/4 % SCREEN GEMS ...21% 201/4 -1% 20TH-FOX 3iy4 33% + 1% UNITED ARTISTS ....19i/2 22 + 21/2 WARNER BROS 14 133/4 !/4 Theatre Companies AB-PT .30% 291/4 -1% LOEW'S ...I8V4 171/2 % NATIONAL GENERAL ... 9% 93/8 % STANLEY WARNER 24i/2 24% + % TRANS-LUX ....13% 12 -1% (Allied Artists, Cinerama, Screen Gems, Trans-Lux, American Exchange; all others on New York Stock Exchange.) * * * 9/26/63 10/10/63 Over-the-counter Hid Asked Bid Asked COMMONWEALTH OF P.R. . . . 6V4 7% 6 6% GENERAL DRIVE-IN 91/4 10% 9% 10% MAGNA PICTURES 13/4 2% 11/2 1% MEDALLION PICTURES 12 13% 133/4 14% SEVEN ARTS 7% 8 7% 8V4 UA THEATRES IOI/4 IP/4 IO1/4 11% USIVERSAL 66 71V2 66 70% WALTER READE-STERLING 2% 3 2% 3 WOMETCO 311/4 333/4 35 37% ( Quotations courtesy Nation al Assn. Securities Dealers Inc.) Film BULLETIN October 14, 1963 Page 3