The Film Daily (1920)

tM% DAILY Friday, August 13, 192 Franchise Analysis (Continued from Page 3) fully when they agreed to that condition in the sub-franchise agreement, and that they knew that not a mem ber in any of the 8,000 or more cities and towns remaining would be con fronted with any possible proposition of this kind. This course would only be adopted to establish definite ex hibition values for big special pic tures, and in so doing the publicity and general advertising in the 30 key cities would greatly intensify the value of any' such pictures to the subfranchise holders in all other zones in the country. Regarding Paragraph 8 Famous Players' Criticism — "After number eight, the contract is in small type, and the most important clauses against the exhibitor appear in smal type." First Nat'l's. Claim— Not even "small type" ? ? ? would be used if the reading matter was secret o. other than absolutely fair and just This inference in the criticism is worse than absurd. Regarding Paragraph Q Famous Players' Criticism— "Paragraph Nine says substantially that where they have an outside production and where the producer of this outside production insists upon percentage arrangements and approval of contract, that all that goes before in the contract counts for naught and these pictures will be sold on a basis approved by the producer. This means that the competition of a First National house in any town has as. much chance of getting these pictures as the First National house; or if it does not get the pictures, it can jack up fhe price to a point where the First National house can make no money. All of the good pictures which will be released on the First National program will be released by producers who are wise enough to in sist upon this provision, and the only pictures that will be released the other way are the pictures which will be of an inferior class, made by inferior directors, who require the fin ancing. In other words, where the exhibitors will be advancing all the money, they might get a break, but where they have anything like the Talmadges or Ray pictures, they will have to pay practically the same as though they had no franchise. This is the vital point of weakness in the whole contract." First NatTs. Claim— It is impracticable_for any producer to attempt to play more than two per cent, of the theaters in the United States and Can ada on a percentage basis. It is only the big key city houses which can give the producer a sufficient return on a percentage engagement to offset at a profit the great costs of exploitation, traveling representatives, and all other expensive factors attending percentage bookings, and this again reverts the main responsibility and the main contact with remotely possible percentage arrangements to the original members of First National Exhibitors' Circuit who own and hold franchises for a great majority of the particular clause in our sub-franchise agreement was written in purposely to avoid closing the door entirely to big special productions. We did not wish to put the entire membership in a position which would make the producer of a truly great picture look upon their theaters as entirely beyond the scope of the market awaiting his efforts. Furthermore, should Asso. First National Pictures contract, with any producer, for a big special picture on a straight percentage basis, this action automatically eliminates any responsibility to the franchise owners and gives them equal opportunity with all other exhibitors to obtain such a production through our offices on percentage, if they wish, at identically the same prices and on the be delivered in the future, are for(control vested in "one or two lea feited as liquidated damages. This is a very harsh clause against the exhibitor and I do not see how it could be upheld in a court proceeding." First Nat'l's. Claim — It has been the general practice of all companies to collect advance deposits. These other companies buy before they sell and therefore incur no specific liability in behalf of any exhibitor anywhere, whereas with Asso. First National when we contract for one or more productions we do so in behalf of every exhibitor member of the organization, and it cannot be considered fair or just to the other members when one member, equally in whose behalf film purchases have been made, suddenly defaults for one ers," and if anyone were fooli 1 enough to attempt to obtain such cc j trol, then* the entire members! j would react against such effort wi | consequent disaster not to the org ization but to the "one or two le ers" whom our critics create for poses of their own. Say Contract Is "All Company' Famous Players' Criticism — "Th are one or two other clauses. Or regard to the assignment, which very harsh on the exhibitor, and 1 contract as a whole is all compa nothing exhibitor. If we co same terms to which they would ba reason or another and expects that obliged to agree should any partic ular production of that kind be offered to them through some other agency. They are not obligated by their franchise agreement to book play or pay for a production which we might obtain on a straight percentage arrangement. Regarding Exhibition Values Famous Players' Criticism — "There is another vital point in regard to the contract, which seems to have been overlooked. For example, a picture might be a very great success in the North, like 'The Copperhead,' and be absolutely valueless in the South. Still if the exhibition value set by the company was high, the exhibitor would have to pay his proportion of the picture, although it would be valueless to him. Another point: In the event that a Philadelphia exhibitor were unable to play a picture on account of censorship, he would still have to his consequent failure to fulfill his portion of the responsibility shall be absorbed and paid for by his fellowmembers. This clause is neither harsh nor in any way extreme. Every honorable man is prepared always to fulfill every obligation he incurs personally or through collective buying, and as a point of honor and legitimate protection, this very clause has been written into the franchise agreement to grant equal assurance to every member that they will not be compelled to pay the bills for a defaulting member. Regarding Cancellations Famous Players' Criticism — "After 1923, either party to this contract can cancel it as to the future. This simply means that for the next few rears the exhibitors are building up the First National institution, which ,vill be controlled from the inside, and pay for it under his contract, because I if at the end of five years it becomes he did not pay for it, there would be no way for the main office to make up this deficiency by charging more omewhere else." First Nat'l's Claim — Investigation of past releases by all companies shows conclusively that it is very rarely indeed that any picture has failed to have a general national appeal, but allowing that some productions might lack box office value, in a given section of the United States and that the necessity of paying the assessment would for the moment be only an even exchange of dollars proposition for the franchise owners and without definte profit, it is absolutely certain that there will be many other productions they will receive on franchise which will have a great appeal and which will show box office results to them very often in excess of what should be the average nominal return on the rental or assessment price for those pictures. The possibility of a picture failing to return a. profit in a territory is extremely remote, and indicates the extremes to which opposition agents are going to find points of attack against our franchise. Regarding Defaulting Members Famous Players' Criticism — "Under this contract a man might run along for a year and have advanced a great deal of money on productions to be ielivered in the future, and then mignt default under this agreement. In the 2 success all these exhibitor contracts will be cancelled as the exhibitors ,vill not be needed to finance the man two percent, of the theaters which a ! event that he does so, all the moneys producer can play a percentage. This I which he has put up on pictures to uiacture of motion pictures, and the entire thing re-vamped with control of the situation in the hands of one or two leaders ." First Nat'l's Claim — The Board of Directors and the Board of Voting Trustees for Asso. First National Pictures were elected by the entire^ membership. The Board of Voting' Trustees which will vote all stock, until 1923, remains in existence until that time, and if there are any exhibitors who can find any reason or excuse in the past record of any member of this Board which causes a doubt or the least tendency to doubt the integrity, honesty, loyalty -and complete confidence of any one or all of these members then the exhibitor or exhibitors who doubt should not tinder any circumstances consider a franchise. The above criticism charges that we might wish to cancel exhibitors, which is an asinine thought, because this would mean destruction of the organization through loss of its market and by the very terms of the contract Asso. First National Pictures would have to refund stock or its equivalent in cash to every exhibitor so cancelled. There certainly would be no intelli pence or business sense in devoting five years to perfecting a co-operative organization of exhibitors only to disrupt it after it had been throughly established. Moreover, members would not for an instant tolerate a and pare it with one of our own, easy to point out the advantages \ ours and the disadvantages of t one, particularly laying stress up the fact that the individual exhibi is buying an uncertain number of [ tures for an uncertain number years at an uncertain price; the pr however, to be set by the seller the time of delivery, the exhibi having financed the making of picture and only getting credit on rental for the amount he advanc WITHOUT INTEREST, or price being set upon a competi! t basis between the franchise hoi' and the houses who are trying to j up prices. This last sentence cov the whole situation in a nut-shell. First Nat'l's. Claim— The matter stock assignments to the Board Voting Trustees is covered to the hibitors by stock certificate recei The purpose of creating a Board Voting Trustees was to absolu : protect every member from the \ . strong possibility that if the was scattered in several thous i places, opponents of First Natir 1 could very readily buy their way D the organization, obtain a defi e voice in its affairs against the best terests of its members, and b g about countless difficulties lookim o the complete disruption of the orj iization. Again, the matter of c< idence in the members of the Boar if Voting Trustees becomes impor) t, and no exhibitors lacking con in them should consider member p by franchise. The phrase: "The itiact as a whole is all company d nothing exhibitor," is really la' iable, because Asso. First Nati al Pictures is composed entirely of <hibitors and no company. The : mander of the above criticism ispfj sv>ered in earlier paragraphs. In conclusion First National (fbJ ments on the criticism of Far is Players as follows: "Remember this! If other ncerns attacking our franchise plai id not fully believe that it is so l ctical, so absolutely fair and jusfo every exhibitor member, and so i>roughly valuable once the indiv lal exhibitor takes the time to stud analyze it carefully, they would jot waste a moment of their time oi nt penny of their money to criticize in any particular. They are not ho ng special sales meetings with di jissions hours long — as they are (HI about the First National fran is< plan — on any proposition which >S not have more than enough me: I insure its ultimate success. Rei m' ber that!"