Harrison's Reports (1950)

Entered as second-class matter January 4, 1921, at the post office at New York, New York, under the act uf March 3, 1879. Harrison's Reports Yearly Subscription Rates: 1270 AVENUE OF THE AMERICAS Published Weekly by United States $15.00 (Formerly Sixth Avenue) Harrison s Reports, Inc., U. S. Insular Possessions. 16.60 Y , „ft M Y Publisher Canada 16.50 Wew 1 ork zu» *• p. S. HARRISON, Editor Mexico, Cuba, Spain 16.50 A Motion Picture Reviewing Service Great Britain 17.50 Devoted Chiefly to the Interests of the Exhibitors Established July 1, 1919 Australia, New Zealand, India. Europe, Asia .... 17.50 Ug Editoria, Policy: No Problem Too Big for Its Editorial Circle 7-4622 35c a Copy Columns, if It is to Benefit the Exhibitor. A REVIEWING SERVICE FREE FROM THE INFLUENCE OF FILM ADVERTISING Vol. XXXII SATURDAY, FEBRUARY 11, 1950 No. 6 COURT ORDERS DIVORCEMENT WITHIN THREE YEARS The final decree in the Government's twelve-year-old anti-trust suit against the eight major film companies was handed down on Wednesday of this week by the New York Federal Statutory Court. Judges Augustus N. Hand, Henry W. Goddard and Alfred C. Coxe signed the decree. Under the terms of the decree, Loew's, 20th Century-Fox and Warner Brothers, the three remaining theatre-owning defendants, were ordered to divorce their exhibition operations from their production-distribution business within a period of three years. Paramount and RKO have already consented to divorcement decrees. Within six months of the entry of the decree, each of the three theatre-owning defendants must submit to the Court a plan for the ultimate separation of its distribution and production business from its exhibition business. After the filing of such a plan, the Government will have three months in which to file objections thereto and propose amended or alternative plans to achieve the same result. The Government and the three major defendants are given one year in which to submit respectively plans for divestiture of theatre interests other than those heretofore ordered to be divested, "which they believe to be adequate to satisfy the requirements of the Supreme Court decision . . . with respect to such divestiture." Both parties are given six months after the filing of such plans to file objections and propose amended or alternative plans. The defendant-distributors and any distributing company resulting from the divorcement ordered are enjoined from engaging in the exhibition business, and the defendant-exhibitors and any exhibitor company resulting from the divorcement are enjoined from engaging in the distribution business, except that permission may be granted by the Court upon notice to the Government and upon a showing that any such engagement shall not unreasonably restrain competition in the distribution and exhibition of motion pictures. Like Paramount and RKO, the three remaining major defendants are enjoined from selling any theatres to each other, or to Columbia, Universal and United Artists, the "Little Three" defendants. During the three years allowed for divorcement, each of the theatre-owning defendants will be permitted to exhibit its own pictures in its own theatres on a non-competitive basis. The Court did not provide for a mandatory arbitration system, but it authorized the defendants to establish a voluntary arbitration system under the American Arbitration Association. For the purpose of securing compliance with the decree, and for no other purpose, the Court ruled that the Department of Justice, upon written request and notice to any of the defendants, shall have access to all books and records, and shall be permitted to interview officers and employees. The decree also enjoins the defendants from continuing to engage in certain trade practices previously found to be illegal. Specifically banned are the fixing of minimum admission prices; the maintenance of a system of clearance; the granting of unreasonable clearance between theatres not in substantial competition; performing existing franchises or granting new ones, except to enable an independent exhibitor to compete with either an affiliated theatre or one owned by a circuit resulting from the divorcement; making or performing formula deals or master agreements; and conditioning the licensing of one picture upon the licensing of one or more other pictures. The decree also directs the defendants to offer each of their pictures theatre by theatre and without discrimination. The Court handed down a separate decree for the "Little Three" defendants in which is imposed the same restraints placed on the major defendants, except that they are not enjoined, as the Government requested, from acquisition of theatres in the future. Because of the fact that the decree was handed down just prior to our going to press, Harrison's Reports has not had sufficient time for a studied analysis. In subsequent issues, however, it will publish opinions from different exhibitor leaders and discuss in detail the different highlights that are of interest to all independent exhibitors. SPYROS SKOURAS' VIEWPOINT ON THEATRE BUDGET CONTROL 20th Century-Fox Film Corporation 44 West 56th Street New York 19, N. Y. January 31, 1950 Mr. P. S. Harrison Harrison's Reports 1270 Sixth Avenue New York 20, N. Y. Dear Pete : I have read and digested your article GUIDE TO THEATRE BUDGET CONTROL in the January 14 issue, and I strongly believe that it is unjust and unfair to give the impression that only 25% of the total theatre budget is adequate for film rental. In my opinion, a flat limit of this kind eventually would destroy the film producing and distributing companies, and naturally the theatre men would suffer. You make quite a liberal allowance for other expenditures in the tables you present in your article. I think these allowances are too liberal because I have checked the items of Rent, Taxes and Insurance, Heat, Light and Power and find that they are higher than average. When I state the opinion that the producing companies would be damaged greatly by such a limit, I have in mind the present costs of picture production and the more exacting public demand for good subjects, good stories and real quality in a screen framework properly conceived, planned and directed. You have been one of the most severe critics of any picture not containing these ingredients, but I know you would be one of the first to deplore any depreciation in quality of the boxoffice values. I doubt whether there is any theatre of any type which can book first class motion pictures, including shorts, for the small percentage of gross that you stipulate, and there is no film company engaged in "A" production which can provide first class motion pictures for this kind of revenue. As you know, I do not speak merely from the point of view of the producing and distributing companies, but as one you will credit with having the best interests of the whole industry at heart. Moreover, I have spent more years as an exhibitor than in my present field, which also includes large responsibilities in connection with the operation of quite a large circuit of theatres. Naturally, if my wish were father to my thought, I would prefer, if it were possible, for this business to operate on a basis whereby the film companies could afford to rent these pictures for as low as 25% of the gross including shorts, and the full program requirements, but unfortunately, present day costs do not permit this. (Continued on bac\ page)