Motion Picture Daily (Apr-Jun 1959)

Motion Picture Daily Tuesday, April 28, , t Studio's Sale Fox Confident, Says Skouras (Continued from page 1) the buyer will improve as a boulevard. At two-year intervals thereafter, the buyer will pay $7,000,000, and the then balance of $5,980,000 is to be paid within 10 years of closing. The production facilities must be purchased within five years from the date of die first purchase, paying half the $16,450,000 price at that time and the remainder by purchase money deed of trust payable over a period of 10 to 20 years depending on the duration of a lease which 20th-Fox is to make on the production facilities. Increase Clause Included The price may be increased up to $5,000,000 to cover improvements and relocation expenses, if any, incurred between the date of the agreement and die date of purchase. 20th-Fox has the option to rent back the studio portion of the property for 20 years. The lease may be terminated at any time at one year's notice. The annual rental will be 8 per cent of the purchase price, or $1,316,000. The present aggregate annual depreciation on the buildings and the improvements on the 75-acre tract is $183,000. The company observes that the property is becoming too valuable to continue to be used for its present purposes and notes that in addition to 20th-Fox's Western Avenue studio in Hollywood, it also owns a 2,300acre ranch within 31 miles of Los Angeles, to which it could transfer production at an appropriate time. Excludes Oil, Mineral Rights The sale does not cover the oil and mineral rights, nor three drill sites aggregating six acres, which provide access to the sub-surface. The buyer is given the right to acquire the drill sites at $5 per square foot when they are no longer used. Proceeds of the sale will be used for working capital, purchase of other assets, retirement of debt and possibly the purchase and retirement of outstanding common stock of the corporation. The buyer's $2,500,000 down payment will be returned with interest if 20th-Fox stockholders do not approve the sale, or if required rezoning of the property is not accomplished within six months. The buyer has the right, on or before closing, to terminate the deal, in which event Fox may retain the $2,500,000 as liquidated damages. 20th-Fox management recommends that stockholders approve the deal. ( Continued reported in Motion Picture Daily on March 27. In the report Skouras goes into detail about films currently in production and set to start shooting soon. "We have maintained in every direction our efforts to obtain the finest material for the screen both in personality appeal and story content and intend to intensify these efforts in order to improve our production program," he observes. Skouras also discusses progress made in the production of films for television. This phase of activities has been expanded, he states, and "we hope that in time our television film activity will equal that of our theatre film production." Laboratory Prosperous De Luxe laboratory business continues to progress, the 20th-Fox head reports, and foreign theatre operations, and oil and natural gas production on the studio property in California continued in 1958 to contribute to earnings. Discussing the foreign market Skouras states that film rentals increased from $52,987,463 in 1957 to $53,188,022 in 1958, "but we must inform you that the impact of free home television has affected the attendance of the theatres in several important markets, particularly in England, Australia, Germany and Italy as well as in other countries of Continental Europe." Skouras also tells stockholders that the new subsidiary, 20th-Fox Record Corp., has just completed its first year of operations and results have "more than justified our decision to move into that area." 'Comments on Operations' In "comments on operations" in the report it is stated tiiat in 1958 20thFox bought 337,100 shares of its common stock at an aggregate cost of $8,805,481, being equivalent to an average cost of $26.12 per share. The major portion of the funds needed to purchase this stock was obtained by increasing the corporation's bank debt, net of repayments by $5,500,000. Previously 52,000 shares were acquired at a cost of $1,069,273 an average of $20.56 per share, making a total of 389,100 shares purchased at a total cost of $9,874,754. During 1958 the company borrowed an additional $7,500,000 from banks, increasing the amount of such bank loans to $22,500,000, of which $20,500,000 were outstanding on Dec. 27, 1958. To refinance this debt over from page 1 ) a longer period of years, the corporation is negotiating a contract with the Metropolitan Life Insurance Co. under the terms of which the notes payable to banks will be liquidated with the proceeds of $22,500,000 of 20year notes. The new notes will bear 5 per cent interest and have a fixed sinking fund of $500,000 annually for the first five years; $750,000 annually for the second five years; and $1,000,000 annually from die 11th to the 19th year, leaving $72,250,000 due at maturity or contingently prior thereto. In addition to the fixed sinking fund, the new notes will provide for an annual sinking fund contingent on earnings. This fund shall consist of 25 per cent of consolidated earnings of the corporation and subsidiaries in excess of $5,000,000 but such 25 per cent shall not exceed $500,000 annually. 22 Wells on Studio Property Seven additional wells were completed on the studio property in 1958, and two others have been completed since Jan. 1, 1959. This makes 22 producible wells at present bottomed under the studio property and four bottomed under adjacent lands. 20th-Fox stockholders were advised that directors have authorized a total of 170,850 shares to be optioned to the following company officers at prices equal to the market plus $1 on the day the option agreement becomes effective: S. P. Skouras, 75,000 shares at 24V4; E. M. Adler, 44,750 at 23y2; J. Moskowitz, 10,000 at 23V2; S. C. Einfeld, 5,000 at 23%; D. A. Henderson, 5,000 at 22%; L. Schreiber, 5,000 at 22%; D. Brown, 2,750 at 22%; A. Harrison, 2,750 at 22%; S. Rogell, 2,750 at 23%; A. E. Freedman, 2,500 at 23%; I. Asher, 2,000 at 225/s; F. McCarthy, 2,000 at 23*4; M. Moskowitz, 2,000 at 22%; C. G. Norris, 2,000 at 22%; E. Silverstone, 2,000 at 23V2; J. B. Codd, 1,250 at 22%; F. T. Kelly, 1,250 at 22%; C. E. McCartney; 1,250 at 24%; E. H. Reek, 1,000 at 23V2 and J. Pincus, 600 at 23V2. 12,800 Shares Optioned As of April 22, only 12,800 shares had been optioned, those by Skouras at 24V4 last Aug. 1, but all or a substantial number of the options will be exercised before the annual meeting, May 19. The company proposes that a restriction against selling the stock within two years after exercise of options be abrogated by vote of the company's stockholders at the annual meeting, with the exception of Skou ■ PEDPLI Herbert L. Golden, United vice-president in charge of open and president of United Artists vision, has been named chairm the Greater New York Fund's a ment division. The 1959 campaii gins in May. □ Mitchell I. Lewis, journalist ai vertising agency executive actif the Dallas area since 1950, has named national director of advei and publicity for the McLendon He will be in charge of promc campaigns for die film producing of McLendon Radio Pictures II as for the McLendon radio stat Warn Producers ( Continued from page 1 ) question persisted in "demand pound of flesh." Disturbed exhibitors, whose i sustains FIDO, point out tha basic principle of the scheme ws it related only to the purchase rights of a film which has passf yond the control of the Trade, now ventilate suspicions that c producers are seeking to au their film revenues by evasion c principle. FIDO's board of administ meets next on April 30. 'Hot" Continues Higi United Artists' "Some Like It continued its record-setting the Loew's State Theatre here a big fourth week gross of ending Sunday night. 'Mouth' Gross $318,, United Artists' "The Mouth" has rolled up a huge $31 gross for 24 weeks at die Paris tre here. ras. The optionees agreed to an a salary reduction of 75 cents per of stock optioned to them, to coi for a period of two years. If a tionee now wishes to sell his prior to die two-year period should agree to a furtiier salai duction equal to five cents a for each month that the peri time between die date of the em of the option and the sale of any shares shall be less than 24 m The company's present 10 dir are proposed for reelection a annual meeting. I THE GEVAERT CO. OF AMERICA, INC. Sales Offices and Warehouses at Photographic materials of extraordinary quality for over half a century 321 West 54th Street 6601 N. Lincoln Ave. New York 19 New York Lincolnwood, III. (Chicago) 6370 Santa Monica Blvd. Los Angeles 38 California 1355 Conant Street Dallas 7 Texas 1925 Blake St. Denver 2 Colorado A Com Line of Profes: Cine Fi