Harrison's Reports (1931)

76 HARRISON’S REPORTS DO NOT ALLOW YOURSELF TO BE RUSHED INTO BUYING YOUR PICTURES EARLY Fred J. Harrington, Secretary of Motion Picture Theatre Owners of Western Pennsylvania, has sent to the members of his organization a circular cautioning them against buying their 1931-32 pictures early. Part of the circular reads as follows : “The needle brigade is just beginning . . . Within a short time you will see local exchange managers and salesmen going around town with a new sparkle in their eyes, a new spring in their steps. “Their conversations will be punctuated with ‘magnificent, superb, thrilling absolutely sure-fire, just a natural, etc.’ You will wonder what has come over them. The answer is easy. “The yearly allotment of sales-hooey has been rammed into them and they are now ready to go out and fight lions. Of course eventually it will wear off and then they will start talking rationally again. Meanwhile the exhibitor who gets all hot and bothered and rushes to buy will take it on the chin. “DON’T let them stampede you ! “DON’T buy in haste and repent! “DON’T sign a contract and then ask for an adjustment. Get the adjustment first ! “DON’T accept the promises of a salesman ; tell him to write it in the contract ! “DON’T sign a contract giving the exchange guarantee and percentage, and under no circumstances play percentage pictures on Saturday !” Wise words, indeed, and the kind that should be heeded by every exhibitor. Let me only add this : According to the press, there is going to be a deficit in the national treasury of more than a billion dollars ; the April 30 statement indicates a shortage of $1,135,000 for the fiscal year ending June 30 as a result of the sharp drop in the receipts. And there is an increase in the expenditures. This means that taxation may be increased. And it is hardly necessary for me to point out to you the consequences of such a step. There is perhaps no other way out ; if there is a shortage in our national accounts, we, the taxpayers, have to make it up. But where is the money coming from to enable each one of us to pay more taxes? We shall be compelled to cut our expenses to the bone. And amusement will be the first in line. Here is another thing to consider : The moving picture industry is in a very, very bad shape. Two of the companies are on the verge of bankruptcy as a result of past sins. One other, considered one of the biggest, is in a great embarassment as a result of the “top-heavy” overhead and of the many mistakes it made. Last year, and during part of the previous year, it bought theatres with part in cash and part in stock. But it guaranteed the stock at eighty, which was the market price at the time. The time limit has ended and it will be compelled to pay out $9,500,000 in making up the difference between the prevailing price and the guaranteed price. This company will be compelled to search every corner of its treasury to get together such a collosal amount for these times. And one of such “corners” will be production ; the sums appropriated will perhaps have to be cut down to one-half. With the production appropriations cut down, what will be the resultant quality of the pictures ? As to the other two companies, it is my opinion that they will “put together” their pictures ; they will not have money enough to make them even half-decent. You will be much safer in tying up with smaller companies this year. I am giving you straight, unadulterated facts for your guidance. Heed them or disregard them — just as you wish. But don’t cry on my shoulder next year if you should disregard them. Take it easy ! There is no need for haste in buying your 193 1 -32 pictures just because there is cut-throat competition among the big producers and are asking you to buy their pictures at once. If you are wise, you will “shop” more carefully this year than you have ever done in your life. THE OLD CONTRACT ILLEGAL Hon. J. Dickinson, judge of the United States District Court, for the Eastern District of Pennsylvania, handed down an opinion on April 28 declaring the old contract as non-existent. It was a case of Vitagraph vs. Theatre Realty Company, involving the sum of $13,13463. Mr. George Aarons, Secretary of M.P.T.O. of Eastern Pa., was counsel. The point raised by the defense was not that, because of the outlawing of arbitration, the contract became illegal May 9, 1931 and unforceable, but that the entire contract was illegal, as it grew out of a combination that was in violation of the Sherman Act. The Court upheld the exhibitor by ruling that he had no contract, on account of the fact that the socalled Standard Exhibition Contract was null and void by the policy of the law. At the time I received this information I received also a telegram from Messrs. Rice & Bettleheim, General Counsel for Blackhills Amusement Company, reading as follows: “May 1st District Court Judge James McNeney Eighth Judicial Circuit South Dakota overruled demurrer to answer alleging illegality of all contracts. Case United Artists versus Blackhills Amusement Company.” Heretofore, the exhibitors had only state court decisions against the contract ; now they have such decisions also from Federal Judges. Let us hope that the distributors will be brave enough to take their defeat gracefully, without any further trouble. They can blame no one but themselves for this state of affairs. HOW MUCH HAVE YOU RECEIVED OUT OF THE WARNER BROS. $15,000,000 ADJUSTMENTS? It became known at the Atlantic City convention of Warner Bros, that during the 1930-31 season the company gave the exhibitors, in adjustments, about $15,000,000. It is manifest that the Warner Bros, executives are trying to re-establish themselves in the good graces of the independent theatre owners; having treated them shamefully during the time they were at the top, they have come to find out, now that they are at the bottom, that good will is worth something. Though the gesture on the part of Warner Bros, executives is welcomed, I am sure, by every independent theatre owner, adjustments alone are not enough to re-establish the old friendship ; good pictures are necessary particularly at this time. THE UNITED ARTISTS SELLING PLAN The new United Artists contract contains the following provision (clause 4) : “The right to approve or reject by the Distributor, this application or any other application signed by the exhibitor at the same time, or any other time, is not dependent upon the approval or rejection by the Distributor of this application or any other application.” This means that it is futile for you to offer for some United Artists pictures prices you consider too high for you with the hope that the contract for the picture of a star you want will be approved ; for, according to this clause, one star is not obligated to approve her or his contract just because some other star felt that the prices you offered for his of her pictures are satisfactory. Because of the fact that United Artists is only a releasing organization, handling pictures that belong to different stars, or directors, this provision is not unfair ; it becomes unfair only if the United Artists salesman should lead you into believing that if you pay the prices he asked you for the pictures of stars you do not really want the contract for the picture of the star you want will be approved, for he knows that this is not correct. Have this in mind when you decide to buy pictures from United Artists. At this time let me again call your attention to the “substitution” clause (Ninth) : this clause gives United Artists the right to change stories, but not stars, or of prominent directors. For instance, if they sell you a Griffith picture with a promise that it will be founded on a certain well known book or play, United Artists has the right to deliver a picture founded on another story, so long as it is a Griffith picture. The same is true with the star pictures — they can deliver to you a picture founded on an entirely different story, so long as the star remains the same. TELEVISION IMPRACTICABLE? According to Motion Picture Herald Mr. John E. Otterson, president of Electrical Research Products, Inc., subsidiary of Western Electric, stated that television will not beconie a reality in our lifetime. That is exactly what this paper said in a series of articles printed in the issues of June 14, July 5, July 19, and August 9, last year. The editor of Motion Picture HeraJd could have saved himself of much trouble in trving to hunt up such information. All he had to do would be to read those articles ; he has them in his files.