Motion Picture Daily (Jan-Mar 1935)

Friday, January II, 1935 MOTION PICTURE DAILY 15 Says Para. Subsidiaries Need $700,000 Each Week Para/sAnixual Cash Need Put At 36 Million {Continued from page 1) Theatre Corp., and Paul Raeburn, chief statistician for Paramount, completed the formal proof of the Paramount Publix plan with testimony designed to show the cash needs of the company on and after reorganization. The hearing was adjourned to Jan. 18 to complete the proof of the reorganization plan for Paramount Broadway, holding company for the Paramount Building and theatre. Yesterday's testimony included an itemizing of the obligations to be met with the $3,800,000 cash in the hands of the Paramount trustees and the $6,500,000 to be raised by common stock assessments. It attempted to show that the stock assessment was justified and that an additional $14,000,000 cash on hand in the possession of subsidiaries was necessary for their current operating expenses. Of the other $10,300,000 cash, $5,325,000 would be applied to payment of Paramount's bank debt and approximately $4,500,000 would be needed for costs of administration of the estate, expenses of reorganization, immediate requirements of production and other expenses. Of the latter amount, according to Raeburn's testimony, $1,650,000 would be needed to meet the terest on the new debentures; $1,650,000 for dividends on the first preferred stock, $350,000 for dividends on the second preferred and $550,000 to apply to the sinking fund for new debentures. Source of 1935 Cash Normal cash requirements for 1935 would be derived from anticipated earnings for the year, which are being estimated on the basis of 1934 earnings, Raeburn testified in response to a question put to him by Judge Coxe. Raeburn estimated that, in addition to the $14,000,000 cash on hand held by subsidiaries, Paramount would require another $5,000,000 in order to maintain next season a production policy of 60 pictures at approximately the present negative cost. Freeman testified that the Paramount theatre subsidiaries had approximately $4,500,000 cash on hand at the end of 1934, of which $1,100,000 was held by Balaban & Katz. The bulk of it, he said, was required for current operations and, of the total, Paramount could not collect more than $350,000 or $450,000 at this time. He declared that the theatre group as a whole could take care of its own cash requirements and was in good condition, although a few subsidiaries did not have enough cash to cover an emergency. Interrogation of the witnesses was conducted by Alfred Cook and Louis Loeb, of counsel for Paramount. Cross-examination was confined mostly to Archibald Palmer, appearing as public defender, who, with Samuel Zirn, representative of a small bondholders' group, still constitute the only opposition to the plan at this time. Palmer's examination of witnesses was directed in an attempt to show that the stock assessment might not be needed ; that cash on hand was ample for the company's requirements and that the six per cent interest rate be ing paid on the bank debt was excessive. In commenting on probable opposition to the plan which may develop, Cook told the court that he had been advised by an unnamed person that if certain appointments were not made to the board of the new company, new attacks on the plan would be made. Completion of the proof on the Broadway plan, Jan. 18, is expected to take the entire day, or longer. Austin Keough, Paramount secretary, will be the first witness. Figure Para.'s '34 Net at $6,682,000 {Continued from pane 1) quarter of 1934 would be $1,030,000, as compared with a profit of $2,300,000 for the same quarter of 1933. Y. Frank Freeman, vice-president of Famous Theatres Corp., Paramount's theatre holding company, testified that the estimated $882,000 theatre group profit for 1934 compared with a loss, undisclosed, on 1933 theatre operations. He stated that a profit of $1,200,000, exclusive of theatre properties in reorganization, was possible for 1935. He estimated that, in addition to this amount, Paramount's 50 per cent interest in Saenger Theatres, now in reorganization, should return it a profit of $200,000 to $250,000 on the basis of an estimated $600,000 net for the circuit for 1935. Three in Cleveland Resume Dual Billing {Continued from page 1) now exhibiting double features are the Alhambra, Metropolitan and Temple. Victor Wolcott, who operates the Temple, has taken over the Family on a lease and plans to reopen it shortly with twin bills. The Family formerly was operated by Singer & Segal, who some time ago attempted to drop the single feature plan for duals, but were stopped by a court restraining order. Immediately after the court action Singer & Segal gave up the theatre. Only independent pictures are being shown at the three dual feature houses. According to unaffiliated exhibitors, the twin bill policy is expected to spread. Major distributors continue to sell with the dual restriction clause in contracts. Independent exchange men believe that twin bills will be shown again at most unaffiliated theatres within the next few months. The plan to take court action against major distributors for restricting duals is believed to have been dropped by independent forces. 'Anything Goes" to Para. "Anything Goes," musical now on Broadway, has been acquired by Paramount. Roxy to Report Soon Annual financial report of the Roxy is due within the next few days. The Paramount film subsidiaries require $700,000 cash each week, George Schaefer, general manager, testified yesterday at the Federal court hearing on the company's reorganization plan. Of this amount, Schaefer estimated Hollywood requirements were "$375,000 or $400,000" a week. Paramount's Hollywood payroll, he said, was "$230,000 to $250,000" a week for 2,700 employes, or an average of about $90 per person. Paramount has set aside a reserve fund of $1,500,000 to $2,000,000, the testimony disclosed, as a contingency to cover its estimated liability in the event American Tri-Ergon wins an action for damages against the company for alleged patent infringement. Emphasizing the desirability of ready cash for production purposes, Schaefer stated that the company was frequently handicapped in properly advertising and exploiting productions because of the dependence of producing activities on distribution returns, which tends to delay the start of new pictures until revenue begins to come in from a completed picture. This, he said, frequently brings the completion of a film so close to its release date that it does not receive proper marketing attention. He pointed out that Paramount was having that problem to contend with at the moment in the case of "Lives of a Bengal Lancer," and intimated that ideal production financing should permit the company to keep "seven or eight" pictures ahead of release dates. Dr. Short Expires Suddenly in Phila. (Continued from page 1) ence with a committeeman of the council there. Dr. Short had long suffered from heart disease. A son, James, left later in the day to bring the body to New York. Born on a farm near College Springs, la., on Dec. 4, 1868, Dr. Short was a clergyman by profession, having been ordained as a Congregational minister in 1897. Dr. Short was an ardent peace advocate, having been executive secretary of the League to Enforce Peace, with which he had been associated since its organization in 1915. He had served as a delegate to several peace conferences and had been prominently identified with religious activities. An active part had been played by Dr. Short in organizing studies financed by the Payne Fund to determine the effect of films on the health, conduct and character of children, and early last year he indicated the council would campaign against block booking. Dickstein to Push Actor-Labor Bill (Continued from page 1) tion Committee last year and hearings were held. Dickstein does not believe that it will be necessary to go through this formality again. Church Bodies Start Detroit Theatre Lists (Continued from page 1) "white lists" 26 metropolitan houses that have shown no Class "C" films, warns 72 theatres that have shown either one or two disapproved pictures, and brands as "unworthy of patronage by those who took the Legion of Decency pledge" 31 houses which have shown three or more Class "C" films during the month. The 26 houses on the "white list" embraced all of the first runs except the Fisher. This list included the following houses : Adams, Fox, Michigan, RKO Uptown, State, United Artists, Aloma, Annex, Baldwin, Birmingham, Center, Colonial, DeLuxe, Eastown, Globe, Grande, Iris, Martha Washington, Mayfair, Medbury, Oriole, Piccadilly, Roosevelt, Rosedale, Stratford, Tower. The "offending" theatres were listed as follows : Showing six banned features — Loyal and Irving; five banned films — Belmont, Casino, Astor, Beacon and Boulevard ; four Class "C" films — Echo, Hippodrome, Jefferson, Sheridan, and Lincoln ; three Class "C" films — Capitol, Amsterdam, Century, Colony, Dox, Hoover, Rex, Uptown, Your, Fenkell, Coliseum, Dawn, East Side, Home, Myrtle, Rivola, Strand, West End and Sun. List of Warned Houses The houses that showed one or two Class "C" films and which were warned that "a word to the wise" is sufficient were the Fisher, Hollywood, Madison, Riviera, Ambassador, Alhambra, Arcadia, Avalon, Buchanan, Calvin, Cameo, Carlton, Cinderella, Conant, Cooley, Crystal, Delthe, Dexter, Dix, East End, Family, Farnum, Fine Arts, Flamingo, Ford Grand, Forest, Fordson, Garden, Gladwin, Granada, Grand Victory, Great Lakes, Greenwood, Highland Park, Hoover, Ideal, Kramer, Lasky, Lincoln Park, Linwood LaSalle, Loop, Maxine, Midway, Norwood, Oakman, Oliver, Palace, Park, Plaza, Priscilla, Punch and Judy, Ramona, Redford, Regent, Rialto, Roxy, Royal Oak, Senate, Stanley, Theatorium, Tuxedo, Virginia, Warfield, Whittier and Woodward Grand. While some 25 exhibitors questioned felt that publication of the list would not affect their business any more than the Legion of Decency drive already has, most of them branded as "unfair" publication of the list, saying that they had had no warning that the organization would issue it. Referring to the banned pictures, the bulletin said : "No exhibitor is forced to remain on this list of offending theatres. The exhibitors' code clearly states that any exhibitor may cancel a picture when there is sufficient local protest. Hence, no exhibitor can use the subterfuge, 'I must block book and blind book my pictures.' " Exhibitors' comment on this was : "Try and cancel 'em." RKO Albee 10 Years Old The RKO Albee in Brooklyn will celebrate its 10th anniversary starting Jan. 19. Ten acts of vaudeville will be added as an extra attraction.