Independent Exhibitors Film Bulletin (1948)

BULLETIN Volume 16, Number 16 August 2, 1948 News and Opinian Allied, TOA Clash On Effect of ASCAP Decision The long-disputed right of the American Society of Composers, Authors and PubHshers to levy against the nation's theatres has finally been overruled by a court of law. U. S. District Judge X'incent Leibell's decision in New York that ASCAP is a monopoly and his injunction against further fee collections from movie houses has been hailed by most independent exhibitors as a momentous victory. By Allied States Ass'n, which has maintained that music copyright charges should be paid at the production source and which had recently tried to pry loose by means of the Lewis Bill ASCAP's grip on exhibitors, the rulingwas. acclaimed as complete vindication of "its refusal to appease ASCAP by entering irrto contractual relations with it." The latter statement was seen as a direct slap at Theatre Owners of America, which several months ago accepted as conclusive the Society's right lo collect from theatres and approved an increase in its rates. DECISION UNEXPECTED Judge Leibell's unexpected decision came as the result of an anti-trust suit against ASCAP by members of the Independent Theatre Owners Association of New York filed back in 1Q42. Injunctive relief was granted but treble damages w-ere denied by the District Court. Basically, the Court decreed that hereafter music performing rights be licensed to the film producers, who in turn will convey those rights to exhibitors in film rental contracts, A. F. Myers, Allied general counsel, immediately expressed his gratification that AUied's position in reference to ASCAP "has received full judicial sanction," and that the Minneapolis Federal District Court "will promptly follow this precedent in deciding the Berger Case" (a similar suit was filed by Benny Berger, president of North Central Allied). He declared that the order "gives effect to the substance of the Lewis Bill and I have no doubt was influenced by that bill." WARNS AGAINST PROPAGANDA He added a warning to exhibitors "not to be affected by propaganda that producers will add to film rentals more than the ASCAP charges or will exact a separate public performing charge. Exhibitors can bargain for film rentals. They cannot bargain with ASCAP. Any attempt by the producers to exact a separate charge will go the same way as the score charge." A diametrically opposite view was taken by Herman M. Levy, TOA general counsel. He caid the decision represented a victory only "for those who would negotiate for performing rights with individual copyright owners, or with the producers of motion pictures as part of the film cost, rather than with ASCAP." For the rest, he added gravely, "This decision means either the creation of a new, involved, and most difficult system of doing business with individual copyright owners, or the compulsory surrender by exhibitors to the producers of motion pictures of their privilege of negotiating with one central agency concerning the amount, which thev, the exhibitors, shall pay for performing rights." ALLIED, TOA CLASH The conflict in interpretation by Allied and TOA has exhibitors in a dither. P. J. Wood and Sidney E. Samuelson, heads of the .\llied units in Ohio and E. Pa., respectively, promptly advised their members to halt payments to ASCAP, while TOA executive director Gael Sullivan warned his membership that the decision is not final until an injunction has actually been issued, lest they violate the Federal Copyright Law and make themselves subject to penalties. Judge Leibell cited ASCAP's 300 per cent increase demands (later shaved to 25-30 per cent after noting exhibitor reaction and negotiation with TOA) as indication of the "power that ASCAP has unlawfully acquired by its own arrangements with its members and by their arrangements with the motion picture producers. The threatened use of that power to demand unfair and exorbitant license fees furnishes sufficient grounds for the exercise by the court of its ordinary equitable powers to prevent any threatened injury to plaintift's." Judst? Lei helL expressed the opinion that it \vould be a "simpler and proper" arrartgemefrt iMETRO'S BILL RODGERS So Conciliation Plan for Leo for the copyright owner to deal directly with the producer on both synchronization and performance rights. He did not doubt that the value of the performing rights would not be absorbed by the |)roducer but would "eventually be passed on to the exhibitor" who would be charged for those rights in the film rental. RELIEF GRANTED The injunctive relief granted by the Court; —Directs ASCAP to divest itself of all rights of public performance through motion picture exhibition of musical compositions synchronized with films and to assign such rights to the copyright owners of the music. — -Restrains ASCAP from obtaining public performance rights in conjunction with exhibition. — Restrains ASCAP's members from refusins; to grant to producers the performance rights through exhibition. — Restrains ASCAP's members from licensing, except to producers, the performance rights. — Restrains ASCAP and its members "from conspiring with motion picture producers for the purpose of including a clause in contracts issued by producers to exhibitors directly or indirectly requiring exhibitors to obtain a license from ASCAP as a condition to the exhibition of the licensed pictures." Metro Has No Need For Conciliation Plan — Rodgers M-G-M has no need for a conciliation and mediation system such as has been established between North Central Allied and 20th CenturyFox. This was the answer of William F. Rodgers to a query from Filni BULLETIN as to his views on the plan. While "not underestimating its value to someone else who may find it to be the proper manner in which to adjudicate such of their differences as may arise," the Metro vice-president in charge of distribution regards the NCA-Fox scheme as "an unnecessary substitute for a tried and proven procedure" his company has employed for years. That procedure is to keep "the door wide open at our exchanges for any exhibitor Leader to accompany any of his members to our office for the puFpt^e of straightening out any difficulties that may exist, or any misunderstandings which may arise." HIS DOOR OPEN If any complaints are not straightened out in that manner, Rodgers declared, "our sales managers or their assistants are available to discuss the matter" and, finally, the door of Jiis own otTice "is always open for this purpose." In view of the "satisfactory" operation of this system. Rodgers said he could see no advantage to his company or its customers in the forming of special committees to handle complaints. Conciliation Plan Must Be On Lccal Basis Smith The magic word is "local." Andy Smith sees it as the key to the hoped-for success of his conciliation and mediation plan in the North Central territory. Speaking to the Associated Theatre Owners of Indiana in convention at French Lick last week, the 2()th Century-Fox general sales manager asserted that "the failure of conciliation and mediation plans in the past has been due to the fact that they were conceived on a national basis." Crediting NCA president Benjamin Berger with the local-level idea. Smith called it "a plan based on the good faith of both exhibitor and distributor and has no direct relationship to national viewpoints one way or another." Smitli indicated his company's readiness to "enter into such a plan anywhere in the U. S. with any exhibitor group, regardless of locality." He also laid stress on the project as "an exhibition plan, conceived by exhibitors." In his first statement on the scope of the six-man grievance committee formed by NCA, which will serve as a pattern for any other group coming to a similar arrangement with 20th-Fox, Smith said it was agreed that the committee "will not hear complaints or grievances of a purely personal or private nature, nor will it attempt in any manner to negotiate contracts for any exhibitors. Otherw-ise, it will hear all complaints without restriction." (Continued •n next page) AUGUST 2, 1948 I