Harrison's Reports (1932)

Entered as se<»«nd-cla8s matter January 4, 1921, at the post office at New York, New York, under the act of March 3, 1879. Harrison’S Yearly Subscription Rates: United States $16.00 U. S. Insular Possessions. . 16.00 Canada, Alaska 16.60 Mexico, Spain, Cuba 16.00 Great Britain, New Zealand 16.00 Other Foreign Countries.. 17.60 35c a Copy 1440 BROADWAY New York, N. Y. A Motion Picture Reviewing Service by a Permer Exhibitor Devoted Exclusively to the Interests of Exhibitors Its Editorial Policy: No Problem Too Big for Its Editorial Columns, if It is to Benefit the Exhibitor. Published Weekly by P. S. HARRISON Editor and Publisher Established July 1, 1819 PEnnsylvania 6-6379 Cable Address : Harreports (Bentley Code) A REVIEWING SERVICE FREE FROM THE INFLUENCE OF FILM ADVERTISING Vol. XIV SATURDAY, JULY 30, 1932 No. 31 An Interpretation of Some Contract Clauses — No. 4 Before examining the Universal contract, let me call your attention to a slight error in the interpretation of the First National and the Warner Bros, contracts, printed in the July 9 issue. In that interpretation I stated that these two contracts did not have any cancellation clause, and that once the exhibitor signed the applications he remained bound until W'arner Bros, saw fit to notify the exhibitor of the acceptance or rejection of the contracts. This was an error. I had before me at that time also the Fox contract and inadvertently I took hold of the Fox copy instead of the copy of either First National or Warner Bros. But no one was hurt by that error ; I am making the correction so as to keep the records straight. In reference to the Fo.x ‘'Acceptance of Application” Clause (Si.xtecnth), let me call your attention to the fact that I took the matter up with Jimmy Grainger and he, after consulting with the Fox legal department, told me that the applicaion does not become binding on either party until an authorized representative of the company signed it. For clarity, let me reproduce the entire clause : ‘‘This instrument shall be deemed an application for a license under copyright only and shall not become binding until accepted in writing, without alteration or change, by an officer of, or any per.son duly authorized by Distributor, and notice of acceptance sent to Exhibitor ; * * The phrase ‘‘does not become binding” applies to both, he said, “until accepted in writing * * ♦ by any person duly authorized.” In other words, until the “duly authorized” Fox representative signs the application the exhibitor has the right to withdraw it. The wording of the clause seems to mean that and nothing else, even though it is somewhat obscure at first reading. A question might arise as to when the distributor signed it ; but in such an event it is my belief that precedent will rule. And the precedent established in this industry is that the time of the post mark on the envelope shall rule. It might not be a bad idea, however, for all exhibitors, before signing the application, to insert the clause framed for their convenience, as printed in the issue of July g, under the heading “First National and Warner Bros. Contracts,” in the last paragraph, second column. This should prevent any controversy in the future. Since Fox says that Clause Si.xtecnth gives the right to the exhibitor to withdraw the application at any time before it has been signed by one of its duly authorized representatives, its salesmen should have no objection to your inserting that clause. Universal Unlike other contracts, the contract of this company prov’dcs under “Delivery, Exhibition and Return of Prints,” that the exhibitor shall pay to Universal the damage caused to another exhibitor by his failure to ship to that exhibitor the print in time for his showing. ■SUBSTITUTIONS : A controversy arose between Allied and Universal as to one provision of this clause, about arbitration. By this clause. Universal may substitute one -lory for another and if the exhibitor is not convinced that the substitute picture has as much box office value as the o;te substituterl he could demand that the matter be arbitr:\terl. The objection of the Allied executives, which objo'-tion was supported by this publication, was to the eft’ect that the arbitration did not provide also “suitability.” The picture Universal would substitute might, from the box office point of view, be as good as the picture it displaced, but its theme might be such as to render the picture unsuitable for a particular exhibitor’s custom. Universal has now informed this office that it is adding the following provision : “In any such arbitration the arbitrators, in determining the relative box office possibilities of the said motion pictures. may consider the suitability of the type of the substituted motion picture for the particular theatre.” With this addition, this clause becomes by far fairer than the clause in the Fox contract, which gives the right to Fox to change “without notice, the story, plot, cast, and/or director of any photoplay” except in cases “where a definite published book, or play, is designated in the schedule and/or in any work sheet and/or in any preliminary trade announcement or advertisement.” Fox should make the same changes in the corresponding clause. SCHEDULE; Under a special provision of the schedule Universal reserves the right to take the price from a picture of a high-price group and put it on a picture of a low price group, putting the price of the low-group picture on the picture of the high-price group. In other words, it may interchange the prices between pictures of a low and a high price group. The Allied executives objected to this provision in that it did not guarantee to the exhibitor that the high-price picture made low-price would be produced, in which event the exhibitor’s average would become higher than that he figured at the time he purchased the pictures. Universal has now informed this office that, in order to protect the exhibitor, it is adding the following provision ; “If after having made such substitution Universal shall fail to release and to tender to the Exhibitor the motion picture which originally had the higher rental classification, the rental of the substituted picture shall revert to the rental originally fixed for such picture in the Schedule, and the Exhibitor shall be credited with the difference between the film rental actually paid by the Exhibitor and the film rental originally specified for such picture.” Universal has informed this office that all contracts already signed or to be signed before the new forms are available will be considered as if containing these additions. ROAD SHOWS: The roadshow clause provides for the roadshowing of four pictures but only two of them may be excepted and excluded. I tried to induce Universal exexecutives to change it so that none of the roadshown pictures may be excepted and excluded but they could not see the advantage of roadshowing a picture unless it is excepted and excluded. I am working to convince them to make some kind of arrangement whereby the contract holder may be given preference on roadshown pictures. Clause Thirteenth. This clause refers to the acceptance of the application; it binds the exhibitor for ten days plus the mailing time both ways. Unless Universal approves it during this time, the application is considered not binding. Allied made objections also to this clause. Harrison’s Reports will support the Allied position in case of disagreement with Universal. These are the most important clauses of the Universal contract. The MGM, United Artists, and World Wide contracts are not yet out; they will be interpreted in due time. WHAT A PRODUCER CANNOT DO! Walter Lippmann, of the New York Herald-Tribune editorial staff, wrote recently : “A man cannot administer great corporations which employ armies of men and serve large communities if his judgment is diluted and distracted by huge speculative transactions. A man cannot be a good banker and get himself mixed up with intricate speculations. A man cannot be a good doctor and keep telephoning his broker between visits to his patients, nor a good lawyer with one eye on the ticker, nor a good journalist breathlessly watching his stocks.” Mr. Lippmann might have added: “A producer cannot make pictures that will bring the public into the theatres if he should spend three-fourths of his available time watching the ticker and the remainder recovering from the shock of disappearing values.”