Harrison's Reports (1947)

132 HARRISON'S REPORTS August 16, 1947 A CLARIFICATION OF THE 20TH CENTURY-FOX RENTAL RELIEF PLAN A number of subscribers h;ivc communicated with this office requesting a clarification of 20th Century-Fox's rental relief plan, which was dealt with editorially in last week's issue. In response to these requests, Andy Smith, general sales manager of the company, has sent to this paper a step by step itemization of the scale deal, as well as a chart, showing how the scale deal is operative on the basis of $100 house expense. The percentage itemization and the chart are herewith reproduced for the benefit and information of all exhibitors: SCALE DEAL From the first dollar for the distributor For the theatre 15% of the gross No profit l7/2% 20% 22/2% 25% 27/2% 30% 32/2% 35% 37K2% 40% Over the 40% figure, the company and exhibitor share dollar for dollar. Scale Deal Based on $100 Expense Profit 17/2% of film rental 20% 22/2% " " 25% 27/2% " " 30% 32/2% " " 50% 50% 50% FILM RENTAL Theatre Profit % of Film Rental Theatre Profit % of Gross Receipts % of Gross Receipts Applicable to Film Rental and Theatre Profit % of Gross Receipts Applicable to House Expense of $100. Gross Receipts Scale 15 15.00 85.00 $117.65 17.5 17.5 3.06 20.56 79.44 125.88 20 20 4.00 24.00 76.00 131.58 22.5 22.5 5.06 27.56 72.44 138.05 25 25 6.25 31.25 68.75 145.45 27.5 27.5 7.56 35.06 64.94 153.99 30 30 9.00 39.00 61.00 163.93 32.5 32.5 10.56 43.06 56.94 175.62 35 50 17.50 52.50 47.50 210.53 37.5 50 18.75 56.25 43.75 228.57 40 50 20.00 60.00 40.00 250.00 % Gross Receipts Per Above Scale Film Rental Theatre Profit House Expense 15 $117.65 5 S 17.65 $ — $100. 17.5 125.88 22.03 3.85 100. 20 131.58 26.32 5.26 100. 22.5 138.05 31.06 6.99 100. 25 145.45 36.36 9.09 100. 27.5 153.99 42.35 11.64 100. 30 163.93 49.18 14.75 100. 32.5 175.62 57.08 18.54 100. 35 210.53 73.68 36.85 100. 37.5 228.57 85.71 42.86 100. 40 250.00 100.00 50.00 100. In further explanation of the above chart, the company informs this paper that the gross receipts scale indicates the figure at which each percentage step begins. For example, the 15% film rental step begins with $117.65 and is applicable to all gross receipts up to $125.87, one cent below the figure of $125.88, at which point the 171/2% ^m rental steP begins. The \lYz% film rental step is applicable from $125.88 to $131.57, one cent below the figure of $131.58, at which point the 20% film rental step takes effect. The same formula is applicable to the other percentage steps. The theatre profits indicated on the chart are figured at the start of each percentage step, in accordance with the percentage of the film rental allowed as profit. But as the gross receipts within each percentage step increases, the percentage of film rental allowed as profit increases, too. For example, at the 25% step, the starting point of the gross receipts is $145.45, giving the company $36.36 or 25% as film rental, and giving the theatre $9.09 as profit, which is 25% of the film rental. If the theatre grosses $150.00, the company will receive 25% or $37.50. By adding to this figure $100 for house expenses, the exhibitor is left with $12.50 or 33^% of the film rental as profit. If the theatre grosses $153.98, which is still within the 25% step, the company will receive $38.50 as film rental. By adding to this figure $100 for house expenses, the exhibitor is left with $15.48, which is approximately 40% of the film rental as profit. But when the gross hits $153.99, where the 27>/2% step begins, the profit starts at $11.64, which is 27'/2% of the film rental. Within this percentage step, too, however, the percentage of the theatre's profits will rise with increased receipts. In other words, the percentage of the theatre's profits fluctuate within each percentage step, reaching the highest point at the figure that is one cent below the starting figure of the next percentage step. All figures given in the chart are based on a $100 expense. Accordingly, if your house expense is only $50, the figures should be cut in half. If your house expense is $300, the figures shown should be tripled.