Motion Picture Daily (Apr-Jun 1948)

r FIRST MOTION PICTURE -'' / ^ ^ \ '■ I ^\ \ i Accurate j IN Ti ATT ^/ Concise j FILM li II /m ■ 1 w and NEWS 1 Y Lai WWW L^^_^™^^_ |_ 11 > 1 Impartial! i ^. 63. NO. 86 NEW YORK, U.S.A., TUESDAY, MAY 4, 1948 TEN CENTS HIGH COURT FAILS TO RULE ON DIVORCEMENT Howard Hughes Acquires RKO Control from Atlas Howard Hughes has concluded negotiations with Floyd B. Odium, head of Atlas Corp., for purchase of the latter's 929,020 shares of RKO common stock, which gives the producer effective control of RKO. Hughes is reliably reported to have given assurances that N. Peter Rathvon will continue as RKO president and Dore Schary as vice-president in charge of production. Hughes plans to take an active interest in RKO affairs himself but it is doubtful whether he will become an officer of the company. Purchase price of the Atlas stock was not disclosed but at current market prices it has a value of more than $9,000,000, so obviously something in the neighborhood of that figure is involved. According to reliable reports the agreement between Hughes and Odium was reached last Friday. Odium yesterday issued a statement confirming that a "tentative agreement" had been reached, adding, "When and if this tentative deal becomes firm and definite a further statement will be made." Odium's reference to the deal as be ing "tentative" was unexplained but it is assumed that it has yet to be approved by the Atlas board of directors. The board is scheduled to meet Wednesday or Thursday and may be expected to act on the deal then. Hughes has been negotiating with Odium for the Atlas holdings of RKO stock for a number of months, during which time the deal has been variously reported as closed or "off." About three weeks ago, after more than a month of continuous negotiations, Odium issued a statement to the effect that the conversations between himself and Hughes had been terminated "without agreement," and added that "no other negotiations are pending." Loyd Wright, attorney for Hughes in the negotiations, was asked by Motion Picture Daily at that time whether there were any prospects of the negotiations being resumed. "Anything can happen in this business," Wright replied. The bulk of Atlas Corporation's RKO holdings were acquired during the 77-B reorganization of RKO in 1933 to 1940, although the investment company added to its holdings bv considerable purchases following the reorganization. For several years past {Continued on page 11) Supreme Court Holds Both Griffith, Schine Guilty Washington, May 3. — The Supreme Court ruled today that the Griffith Theatre interests of Texas, New Mexico and Oklahoma were guilty of a conspiracy to violate the anti-trust laws. It sent the case back to the District Court for the Western. District of Oklahoma for further findings as to how greatly the monopoly power of the chain had affected its growth and for "fashioning of a decree which will undo as near as may be the wrongs that were done and prevent their recurrence in the future." By a six to one majority the court reversed the ruling of the Oklahoma court, which found no violation of the anti-trust laws and dismissed the com(Continued on page 10) Washington, May 3. — The Supreme Court today ordered the U. S. District Court at Buffalo to make further findings and enter a new decree on how the Schine Theatre Chain should be broken up. In a 7-to-0 decision, the court upheld the broad outlines of the Government's anti-trust case against the New York and Ohio chain, although it did set aside the District Court findings on divestiture and several other points. All indications were that the high court wanted the lower court to make a complete re-examination of the divestiture question. It said the District Court must make findings on exactly which theatres had been gained as a result of Schine's conspiracy with (Continued on page 10) Returns Case to New York Court for Further Findings on Theatre 'Monopoly9 of Big 5; Kills Competitive Bidding, Price-Fixing WASHINGTON, May 3.— The United States Supreme Court today handed down its long-awaited decision in the Paramount case, but neatly side-stepped a ruling on what should happen to the theatre holdings of the five major companies. Instead, it sent the matter back to the New York District Court for further findings on the extent to which the five major theatre-owning defendants monopolized exhibition, especially in the first-run field, and for fashioning of a more effective decree to carry out whatever findings which the District Court might make. All indications are that various implications in the court's opinion give the Government the whip-hand in the new lower court proceedings. Other sections of the court's decree threw out the competitive bidding system, left to the District Court the establishment of some sort of voluntary arbitration system, and upheld the District Court's ban on various distributor trade practices, including minimum-admission price-fixing, unreasonable clearances, master agreements and formula deals, block booking, pooling agreements and certain types of joint ownership. The high court's decision was by a seven to one vote, with Justice Douglas delivering the majority opinion and Justice Frankfurter dissenting. Justice Jackson did not participate. Highlights of High Court's Decision Washington, May 3. — Highlights of the Supreme Court decision in the U. S. vs. Paramount case handed down today follow. The New York court was directed to hold new hearings on theatre divorcement to examine the legality or illegality of theatre acquisitions and their uses, and to prepare a new decree. Competitive bidding was abolished by the court and, since it was an alternative to divorcement, the New York court was directed to determine whether a ban on cross-licensing should be instituted as a "short-range" remedy. Prohibition against theatre expansion by the major companies were removed pending issuance of a new court decree in New York. Voluntary arbitration for the industry was endorsed by the high court, which asked the New York court to set up the system and the rules for it for those who subscribe to it. The New York court was upheld in all of its restraints upon trade practices, including fixing of minimum admission prices (road shows), unreasonable clearances, master agreements and formula deals, block booking and pooling arrangements. Lower Court Findings 'Obscure' Douglas characterized as "obscure" and "deficient" various findings of the lower court on the question of an exhibition monopoly by the theatre-owning defendants. He pointed out that the lower court had found no monopoly on any phase of the case, although it did find an attempt to monopolize through the distributor practices it enjoined. It therefore had concluded, Douglas said, that divestiture was unnecessary until competitive bidding had been tried and found wanting. But, he continued, it is clear that so far as the five majors are concerned the aim of the conspiracy was designed to strengthen their hold on the exhibition field. Therefore, it was not enough in determining the need for divestiture, to conclude with the District Court that none of the defendants was organized or has been maintained for the purpose of achieving a national monopoly, nor that the five majors through their present theatre holdings "alone" do not and cannot collectively or individually have a monopoly of exhibition. "For when the starting point is a conspiracy to (Continued on page 8)