Harrison's Reports (1932)

52 HARRISON’S REPORTS March 26, 1932 basis on assurances by Metro that such policy was fixed national one; therefore, be it “resolved, That this convention call upon Metro GoldwynMayer to correct this injustice by refunding to those exhibitors who have been so overcharged the difference between the price they paid as a result of these representations and the price charged elsewhere and to rewright the remainder of the contracts so as to bring them in line with the prices and percentage rates in effect elsewhere in similar spots and territories.” And it happened also at the Ohio exhibitors convention in Columbus ; when the Cleveland exhibitors, feeling that their resolution on “Protection” would be out-voted by the circuits, obtained telegraphic proxies and passed it by an overwhelming majority, the circuit men said: "What is the use of belonging to this organization and pay our good money to it when it works against us?” Oil and water cannot mix ! Incidentally, let me give you some inside information about the sensational facts that prompted Mr. Barrist to introduce his resolution at the Washington convention : In St. Louis, MGM sold their pictures to some accounts for ; it sold “Emma” at $50 guarantee and a “split” over $600, with a $3 score charge for a three-day engagement. In one particular case, the guarantee for this picture was only $30, even though the point of division was $600. In still another case, the guarantee was $100 and the “split” point $1,400; and in still another, $65 guarantee and a split over $900. In one case forty pictures were sold at an average of $22.50 though the theatre has 1500 seats. In the Chicago territory, it was learned, no percentage is played. This ought to prove interesting news to you all. I have been informed that the Continuing Committee has been asked to investigate these charges and if it finds them true to formulate some kind of action against MGM based on its statement that its 25-30-35% policy was national. IF FOX SHOULD PAY CLOSER ATTENTION TO THE QUALITY OF PICTURES THAN TO PROFITS FROM POSTERS! The Fox Film Corporation has sent to many exhibitors a letter demanding the return of posters and of other accessories in their possession after the pictures have been shown in their theatres; it reminds them of the fact that these are not sold but leased, and that they are copyrighted. In the event they refuse to comply with its request, the Fox company threatens to invoke the provisions of the copyright law to protect its rights. Instead of making threats, the Fox Film Corporation should be very nice to the exhibitors; it will need their good will now more than ever, for not only has its product for 1931-32 been of ordinary quality, but the indications are that during the 1932-33 season it will be worse if we are to judge by the smut and filth they have started putting into their pictures lately. For instance, “She Wanted a Millionaire” ; it was analyzed in the February 27 issue, under the heading, “Quo Vadis?” Another case is that of “.'\fter Tomorrow” : somewhere about the middle of the picture the heroine offers herself to the hero and the hero refuses to accept her offer, giving her a lecture instead. Small town exhibitors will not be able to show it. As a result the Fox Film Corporation will lose more money from it than it would make out of the posters of a dozen pictures if it should succeed in frightening the exhibitors into returning the posters and the other accessories instead of selling them to the poster exchanges. AN AUDACIOUS REQUEST It is, I believe, known to every one of you that last month the MGM exchanges sent out letters asking their exhibitor customers to permit them to increase their film rentals at least by twenty-five per cent on all pictures, features as well as short subjects, they had under contract. "My attention has been called to the fact,” said the circular, “that the rentals at which we sold j’ou our 1931-32 features and shorts are approximately twenty-five per cent less than the original quota we had set against your theatre at the beginning of the selling season. “In consideration of this condition, * * * I ask your cooperation to allow us to increase your rentals ♦ * * this increase to apply to all unplayed product. * * * "It is very important that I get your co-operation on this promptly.” Last week I told you that this and other actions on the part of the MGM sales forces denote but one thing, that the MGM organization is hard-pressed for money, and that the only way for it to get it is to use high-pressure sales tactics on its customers. Since the effect of this letter was the exact opposite of what was intended in that many exhibitors have written to the exchanges and told them that, instead of an increase, they must have a substantial decrease of their rentals, and since their high-pressure sales tactics have estranged hundreds of theatres throughtout the country, making MGM lose from such theatres what it may have gained from those theatres that accepted their crushing terms, there is no other way for the MGM organization by which it can improve matters than by reducing the overhead expense on each picture. I have been informed that an effort has been made to cut down the overhead, but that these efforts have proved abortive in that the responsibility for the cutting down of the high salaries was entrusted to men who had been receiving high salaries themselves; they were unwilling to approve reductions because they had to start with their own salaries. An effort at economies, if it was intended to be sincere, should have started from the top and reached the bottom. For instance, the first one who should have reduced his salary should have been Louis B. Mayer. Mr. Mayer receives, as I understand, $8,000 a week; he could get along very well with three thousand a week. The second should have been Irving Thalberg ; I understand he is receiving $6,500 a week ; he can get along very well with $3,000 a week. Harry Rapf should get along with $1000 instead of $4,000, the amount he is supposed to be getting now. There are other studio executives who should reduce their salaries by 65% ; they should realize that we are not living in 1928 or 1929 — this is 1932. In addition to salary reductions, there should be a sincere effort to eliminate waste, not only in the actual making of the pictures, but also in the buying of the stories. I have been informed reliably that negatives that have cost MGM hundreds of thousands of dollars are rotting in the vaults and stories for which highest prices have been paid are gathering dust on the scenario department’s shelves. The MGM executives should realize that there are more than ten million workers idle and that the theatres cannot, in consequence, take in enough money to satisfy their high film rental appetites. If they should not realize it, it will be just too bad. Let them have a look around them if they want to learn a lesson. The same kind of fate will not be long in coming. TRYING TO SUGAR COAT THE PILL FOR THE CIRCUITS Part of a circular sent by some MGM exchanges to the exhibitors at large reads as follows : "Due to the fact that quite a few of our accounts have fallen behind in their payments of film bills, and have forwarded us bad checks, etc., we find it necessary to take certain precautions for our own protection. We therefore ask you to please refrain from asking us to make special arrangements for payment of films, as we cannot do one thing for one exhibitor and refuse another the same courtesy. "Consequently, in the future, when you play any of our pictures on percentage, it will be necessary at the end of the engagement to give either a check or in cash, our share of what is coming to us to the checker, who is covering the engagement. In the event we do not check your theatre, you are to mail us a check the same night, and a statement of our share. * * *" You know, of course, that independent exhibitors are not given the courtesies referred to in this circular. Consequently, the reference about "falling behind in payments” and "bad checks” cannot mean other than the producercontrolled theatres. I have been informed, in fact, that one of the big companies had to deposit with MGM $200,000 to guarantee the prompt payment of the bills ; and that one of the other big compaies is from four to eight weeks behind in its payments, from percentage as well as from straight rentals. It is manifest that the circular was sent to all exhibitors, affiliated as well as unaffiliated, out of a desire to avoid hurting the feelings of the affiliated exhibitors by telling them candidly that they must pay their bills promptly : by pretending that this is to be a general rule of the company MGM will put over what it had originally in mind graciously. WTiy doesn’t the Copyright Protection Bureau get busy in these cases?