The Independent Film Journal (1955)

RKO Radio Purchased General Tire Firm Las Vegas, Nev. — General Tire & Rubber Co., which already has sub¬ stantial interests in radio and television, this week moved into the motion pic¬ ture business with the purchase of RKO Radio Pictures Inc. from its sole owner, Howard Hughes. The purchase price of $25 million in cash is believed to represent the largest single finan¬ cial transaction in the motion picture in¬ dustry, as well as one of the largest cash sales by an individual in the histoi’y of American finance. With the contract already signed, the multi million dollar check is scheduled to change hands on July 25. According to the announcement of the long-negotiated deal THOMAS O'NEIL by Thomas O’Neil, president of General Teleradio Inc., a subsidiary of General Tire, the purchase price would cover the following : the major motion picture producing and dis¬ tributing company with extensive studio and production facilities in Hollywood and Cul¬ ver City, Calif. ; control of studios in New York City; access through part-ownership to producing facilities in Mexico City; 101 do¬ mestic and foreign motion picture exchanges which RKO opei’ates in a world-wide dis¬ tributing system; the facilities of RKOPathe, and RKO Television, Inc. The sales does not involve the former holding company, RKO Radio Pictures Coi-jD., which was the parent company of RKO Radio Pictures, Inc. This organiza¬ tion is jointly controlled by Hughes and Atlas Corp., headed by Floyd Odium. RKO Radio was headed by James R. Grainger, who assumed the presidency nearly three years ago, moving over from Republic Pic¬ tures, where he was executive vice-president and sales chief. Owns Mutual Broadcasting General Teleradio, which has grown rapidly in the entertainment fields since 1930, already owns the Mutual BroadcastingSystem, the Don Lee Broadcasting System and the Yankee network. It also owns sta¬ tions WNAC and WNAC-TV, Boston; WOR and WOR-TV, New York; KHJ and KHJTV, Los Angeles; WHBQ and WHBQ-TV, Memphis; and KFRC, San Francisco. O’Neil stated that there would be no changes in RKO personnel but policy changes will be made to ‘‘accomj^lish more extensive use of facilities.” Regarded as the principal reason for making the deal, however, is the huge RKO Radio film library, consisting of an esti¬ mated 400 to 800 features, some of which Avould draw top money on General Tele¬ radio’s television facilities, and on otlier TV outlets. RKO’s backlog includes film “classics” starring Fred Astaire and Ginger Rogers, Cary Grant, Irene Dunne, and others. Among the big unreleased pictures in¬ volved in the deal are the recently-filmed “ The Conqueror,’ ’ story of Genghis Khan starring John Wayne and Susan Hayward, and the Hughes-produced “Jet Pilot.” Tlie deal between General Tire and Hughes marks the second alliance between the rubber and film industries, in moves by large organizations toward diversified activi¬ ties. Stanley Warner took the first step with the purchase in May 1954 of International Latex Corp. for $5* million. General Tire has holdings in chemicals, radio, television and motion pictures. Second "Sale" By Hughes This is the second time that RKO Radio has been sold by Hughes, who sold his con¬ trolling interest in the studio to a syndicate of business men in Sept. 1952. The deal failed with the syndicate turning back con¬ trolling stock interest five months later along with the forfeiture of $1,250,000 made as a down payment and profited by Hughes. Hughes acquired the entire assets of the company in IVtarch, ]954, through the pur¬ chase of the greater part of the outstanding stock following his offer of six dollars per share for all shares held by stockholders. The transaction involved an outlay by Hughes of more than $23 million. Last year, it is estimated, RKO Radio rolled up a world gi-oss of around $44 mil¬ lion, although the studio released only 17 new pictures, 12 of which made by indie pro¬ ducers, plus 15 re-issues. Estimates as to net profit earned by the company vary, but RKO was reported to be in the black last year. Meanwhile, Hughes is not losing money either. Financial quarters point out that he can figure on a capital gains profit of close to $7 million on his investment. This figure does not take into account Hughes’ heavy holdings in the holding company, RKO Pic¬ tures, which now holds nothing except sub¬ stantial bank deposits. RKO Will Continue Theatrical Production RKO Radio Pictures, under the new own¬ ership of General Teleradio Inc., a subsidiary of General Tire & Rubber Co., will continue to furnish product for motion picture thea¬ tres, according to a Teleradio spokesman. He said “no change is contemplated as far as production and distribution of product for theatres are concenied.” Exhibitoi-s have expressed hopes that pro¬ duction at the studio might be returned to normal, to provide additional product for theatres. Fears had also been expressed that the new owners might cut down further RKO’s already limited production, or con¬ centrate on producing films for TV. Barring policy changes, neither possibility appears to be imminent. Polls Show Tide Against Toll TV Pending a final decision by the FCC on Pay-To-See TV, some time after rebuttal briefs to original testimony are filed after the deadline of September 9, discussion con¬ tinues at a lively jjace, with indications that the tide of public sentiment has definitely turned against the proposed systems. Newspaper polls throughout the country ai-e now consistently opj^osed to Pay-To-See TV, in sharp contrast with polls taken sev¬ eral months ago, before the pros and cons of toll television had been widely discussed. In the most one-sided public demonstration yet recorded in opposition to pay-TV, readei-s of the “Knoxville News-Sentinel” rolled up a margin of better than 136 to 1 in favor of maintaining the present system of spon¬ sored television programs for home viewers. Termed "Too Costly" “Of 820 comments,” the News-Sentinel i-eported, “814 scored toll TV as too costly, un-American, smacking of business monopoly or ruinous to TV set manufacturers.” “If toll TV is passed, I think my 21-inch Zenith will make a good hen nest,” the newspaper quoted on(' “irate viewer” as writing. Another wrote : “As for commercials, we rather like them and the children love them. The companies can af¬ ford the commercials but we sure can’t (af¬ ford) the toll.” Other polls have been completed by the “Minneapolis Star & Tribune” and the “El Paso, Texas Herald Post.” In a statewide survey conducted by the Minnesota paper, 72 percent of all adult TV householders opposed the idea of slot machine television, while 22 percent allowed that they favored “some sort of subscription TV system in the U.S.” The El Paso suiwey indicated an even greater margin of opposition to Pay-As-YouSee TV, with a 15-to-l vote against the sys¬ tem. Many voters included indignant letters voicing their feelings against the plan, the Herald Post reported. Latest of the viewer groups and civic or¬ ganizations who continue to make their voices heard at the FCC offices in Washington with letters and resolutions stating opposition to “coin-box television” are four Oklahoma Chambers of Commerce, representing busi¬ ness and professional interests in Sayre, Hominy, Wewoka and Ardmore. More Resolutions The Memphis, Tenn. CIO council, the Al¬ bany Musicians’ Assoc., Local No. 14, A.F. of L., and the Waukegan-North Chicago Cham¬ ber of Commerce, also have gone on record with resolutions opposing pay-TV. The Memphis resolution stated: “Working people would be the hardest hit by Pay-ToSee TV, inasmuch as thousands of Memphis people purchased their TV sets with the knowledge that the only future expense would be maintenance of that set, and that all programs would be free.” The resolution contended that, although the sponsors of Pay-TV argaie that better programs would result through the billions of dollars that would bo collected, the im¬ provement, if any, would not compensate for the additional expense. 4 THE INDEPENDENT FILM JOURNAL— July 23. 1955