The Independent Film Journal (1954)

Allied’s Rental Complaints Due For Distributor Airings Charges of “unconscionable” film rentals and other exhibition complaints will be dis¬ cussed when the distribution executives of the major companies meet individually with a special National Allied committee in sev¬ eral sessions next month. Distribution will not assemble in any group meeting as a precau¬ tion against the possibility of a government conspiracy charge, it is understood. The meetings have resulted from a series of blasts made against distribution trade practices by Allied members. The latest and most all-encompassing series of complaints were contained in a bulletin signed by Abram F. Myers, the group’s general counsel, and distributed to all branches of the industry. Meeting with the sales heads will be Myers and Ben Marcus, National Allied president. Other Allied members scheduled to attend include Jack Kirsch, Nathan Yamins and Wilbur Snaper. These men have declared their determination to remain in conference with the sales executives until some solution is reached. Not Getting Tax Benefit Chief complaint of the exhibitors is that distribution is depriving them of the major share of tax benefits granted when the Fed¬ eral government reduced the 20 percent ad¬ mission tax. When the charge was first made some time ago by Col. H. A. Cole, the special Allied committee was appointed. The threat by Allied members that if satis¬ faction is not granted, they will request gov¬ ernment intervention has been present in the latmosphere for the past few weeks. Exhibi¬ tion is itself divided on whether or not it wants any more facets of the industry to be subject to government control. The possibility of resorting to legal action, including the asking of aid from the Departtment of Justice, was sounded by Snaper, who spoke at a press conference last week on behalf of Allied’s New Jersey unit, which he heads. Snaper’s complaint at that time was directed at the print shortage and prod¬ uct holdup facing his members. The theme of government intervention also appeared in Myers’ statement that he did not know how long Allied will continue to oppose government regulation for the film industry if the abuses are not corrected. He noted that “the specter of government reg¬ ulation will continue to haunt the industry until the abuses” are abolished. Four Specific Complaints While he noted that it was not the pur¬ pose of his bulletin “to set forth an itemized bill of particulars in support of any general charge,” he did list “in broad outline” the nature of the complaints. He added that they are too serious and widespread for adjust¬ ment “in a case-by-case procedure.” First on his list was his charge that the film companies went back on their word to adjust certain contract prices as was promised at the time of signing those con¬ tracts. While objecting to the so-called “look” practice, Myers noted that if contracts were signed with that agreement, the film com¬ panies should have fulfilled them. He charged additionally that the film com¬ panies have refused to raise their rental terms ceilings so as to allow for increased grosses resulting from tax revision. With the Federal tax cut, a picture automatically goes into a higher gross bracket without any at¬ tendance increase, he explained. If this mere¬ ly means a higher rental, then distribution gets all the tax benefits, he stated. Another charge is that minimum percent¬ age terms, “already too high for most ex¬ hibitors, have been further increased.” Myers stated that “exhibitors are being crushed be¬ tween raised floors and lowered ceilings and their tax benefits are being confiscated by the film companies.” His last complaint is that distributors are including in the top allocations pictures which formerly would have been placed in the lower brackets. This is being done to avoid increasing the prices of flat rental pic¬ tures, but it achieves the same result, Myers declared. “Unless all the rules of fair dealing and sound economics have changed,” the “ex¬ traordinary policies and conduct of the film companies can lead only to disaster,” the Al¬ lied official stated. He noted that “this frank discussion must not be interpreted as harbor¬ ing a threat, because none is intended.” Should government regulation come about, it would most likely result from the govern¬ ment’s own decision rather than from a re¬ quest from any industry members, he ex¬ plained. He warned, however, that “no one can predict what the reaction of the Congress will be” if the case is presented to the House Ways and Means Committee and the Senate Finance Committee. Myers warned that “responsible heads of the film companies can make no more serious mistake than to ridicule or ignore the com¬ plaints now being voiced by exhibitors in all parts of .the country.” He noted that “voices are being raised in protest against the exact¬ ing policies of the film companies that never were heard before.” “The temper of the exhibitors is unmistak¬ able,” the general counsel asserted. He hit out against the “opportunist philosophy” of the film companies that spreads a spirit of “let us eat and drink; for tomorrow we shall die.” Enduring success cannot be “built upon ( Continued on page 20) Percentage “Floor” Urged For Small Theatres Indianapolis. — A percentage “floor” on special releases in small theatres has been asked by “Theatre Facts,” bulletin of the Allied theatre Owners of Indiana, so that smaller houses would not have to pay excep¬ tionally high percentage terms unless they made a profit on the film. Paper advocates negotiating a separate “floor” with each ac¬ count with the estimated range from 15 to 30 percent. “Let the profits come from those theatres that made a profit on the picture, and not from those situations that did not happen to make money on the engagement,” the paper argued. It assures the producer that he'would at least be certain of his production cost with this method, and could make his profit in the larger houses. Gotham Exh ibs Azva 1 1 Tax Induction Ruling ; Bird Report Upcoming New York City exhibitors, engaged in a struggle to bring repeal of the city’s five per¬ cent admission tax, are eagerly awaiting a ruling in the injunction suit proceeding be¬ fore New York Supreme Court Justice Nicholas M. Pette and the final report of the Temporary Commission of the Fiscal Affairs of the State, which has been investigating the tax. Judge Pette reserved decision, pending trial, of the action brought by five Queens County theatres seeking a temporary injunc¬ tion to halt further tax collection. Attorneys for the RKO Flushing, Loew’s Willard, Cen¬ tury’s Queens and Community and Brandt’s Strand theatres claim the tax violates the city’s licensing law and in some cases calls for a levy of more than five percent, which is the city’s tax limit. Laws In Conflict Edward C. Rafterv, speaking for the thea¬ tres, told the court that the present tax and licensing law can not be reconciled, and that either one or the other should have been changed at the time of the tax enactment. The city’s so-called bracket system of tax collecting forces some theatres to pay as much as 6% percent tax, the theatres claim. It was reported by city officials that to get by this, the city might use a token or stamp system, to take care of the law’s present major fraction ruling. Theatres object to the token system because it would mean addi¬ tional bookkeeping. The city’s assistant corporation counsel Stanley Bucksbaum noted that the city has the power to make use of a token system. He added that the city comptroller would first have to review the matter and explained that the method of collection is discussed in a separate section of the law and could be changed easily. Experts think the change unlikely. Arguing against the validity of the entire proceeding, the counsel for the city declared that points of the theatres’ case involving legislation should be argued before legislative branches of the government. Exhib In Private War Meanwhile, in a sidelight to the case, an attempt at a bit of showmanship by Brooklyn exhibitor Albert Greene, owner of the Ave¬ nue U Theatre, in combatting the law was frustrated when the Federal government stepped in. Greene was prohibited from dis¬ tributing specially chrome-plated pennies to remind his patrons of the tax. Greene was exchanging the painted pennies for regular ones, which his patrons were dropping into a bottle to present to Mayor Wagner when it comes time to make the quarterly tax payment. Since the govern¬ ment ruling that the painted pennies are a violation of the law, Greene has been request¬ ing that his patrons return them. A giant bottle had been placed next to the box office in which the pennies were being collected. A 40 by 60 sign next to the bottle read “Take the cotton out of your ears, Bob, and hear this protest from Ave. U theatre patrons who are burdened with your ob¬ noxious tax.” Sign asked for pennies in the Wagner Tax Bottle to “help pay the salaries for these juicy patronage plums.” THE INDEPENDENT FILM JOURNAL— July 24, 1954 5