The Exhibitor (1955)

MOTION PICTURE EXHIBITOR 13 (Checked out: 20% of $1,063.90 equals $212.78 film rental; one third of the $212.78 film rental equals $70.93 theatre profit; add these two items to $780.00 of overhead; and the total is $1,063.71) . The gross at which you would pay 21% under SLIDING SCALE “B” is still easier. Film rental representing 21%, theatre profit would represent 7%, and overhead the remaining 72%. 72 divided into 100 would produce a ratio of 1.389. Multiply¬ ing the known overhead unit of $78.00 by 1.389 will produce a gross unit of $108.34, or a weekly gross of $1,083.40. 21% of this gross would be a $227.51 \yeekly film rental, and one third of the film rental, or $75.84, would be the weekly theatre profit. And let us see what would happen at that mythical 41%; film rental under SLIDING SCALE “B.” We know that the theatre profit will be one third of that or 13%%, and that the two will total 54%% of the gross. So overhead would be the remaining 45%% and divided into 100% equals a ratio of 2.206. Based on an over¬ head unit of $78.00, the gross unit would therefore need to be 2.206 times $78.00, or $172.07, or a weekly gross of $1,720.70. 41% would produce a $705.49 weekly film rental, and one third of that film rental, or $235.16, would be the weekly theatre profit. Total $1,720.65. Slide “C” produces the greatest variance, because it is actually a double slide, with both the film rental and the theatre profit as variables, that move one point at a time or two and one half points at a time. Under Slide A and B, only the film rentals were a slide and the theatre profits bore fixed percentage relationships to them. Under Slide C, when the film rental is 20% of the gross, the theatre profit is only 20% or one fifth of that film rental. As the film rental moves to 21%, the theatre profit moves to 21% of that film rental. And so on, up and up, so that at our mythical 41% film rental the theatre profit is 41% of that 41%. From this it can be seen that, from the standpoint of theatre profit, while Slide C minimizes profit on the small grossing pictures, it produces a better share than Slide B as soon as the film rental passes 33%%, but only equals Slide A at a film rental of 50%,. Applying our three hypothetical grosses, necessary to the earning of 20% , 21% and 41% film rentals, to SLIDING SCALE “C”, we must re-emphasize that theatre profit is not a fixed percentage of such rentals. At a 20% film rental, the theatre profit would be 20% or one-fifth of that 20%, or 4%. Film rental and theatre profit would therefore total 24%, so that over¬ head would represent 76% of the neces¬ sary gross. 76% divided into 100 %i would equal a ratio of 1.316 under SLIDING SCALE “C.” Multiplying the overhead unit of $78.00 by 1.316 would produce a gross unit of $102.65, or a weekly gross of $1,026.50. (Checked out: 20% of $1,026.50 equals a $205.30 film rental; 20% of that film rental equals a $41.06 theatre profit; and add these two to the overhead of $780.00 and you arrive at a gross week of $1,026.36). To set up the gross under SLIDING SCALE “C,” at which you would pay a 21% film rental, and earn 21% of that film rental (4.4% ) as theatre profit, we can see that with these two representing Chart No. 1 SLIDING SCALE "A" (50% of the Film Rental to be retained as Theatre Profit) RATIO UNIT GROSS** FILM RENTAL % THEATRE PROFIT % of Gross of Gross*** Unit Overhead X 1.429 = 20* 10.0 Unit Overhead X 1.460 = zz 21 10.5 Unit Overhead X 1.493 = zz 22 11.0 Unit Overhead X 1.509 — = 221/2* 11.25 Unit Overhead X 1.527 = = 23 11.5 Unit Overhead X 1.563 rz zz 24 12.0 Unit Overhead. X 1.600 zz = 25* 12.5 Unit Overhead X 1.639 = = 26 13.0 Unit Overhead X 1.681 =:= zz 27 13.5 Unit Overhead X 1.702 1= = 27 1/2* 13.75 Unit Overhead X 1.724 = 28 14.0 Unit Overhead X 1.770 zz zz 29 14.5 Unit Overhead X 1.818 zz zz 30* 15.0 Unit Overhead X 1.869 zz = 31 15.5 Unit Overhead X 1.923 zz 32 16.0 Unit Overhead X 1.951 zz zz 321/2* 16.25 Unit Overhead X 1.980 = zz 33 16.5 Unit Overhead X 2.041 IZ zz 34 17.0 Unit Overhead X 2.105 =: zz 35* 17.5 Unit Overhead X 2.174 zz = 36 18.0 Unit Overhead X 2.247 zz — 37 18.5 Unit Overhead X 2.286 zz zz 371/2* 18.75 Unit Overhead X 2.326 = zz 38 19.0 Unit Overhead X 2.410 = 39 19.5 Unit Overhead X 2.500 zz 40* 20.0 Unit Overhead X 2.597 zz 41 20.5 Unit Overhead X 2.703 zz — 42 21.0 Unit Overhead X 2.759 IZ = 421/2* 21.25 Unit Overhead X 2.817 z; zz 43 21.5 Unit Overhead X 2.941 z; =z 44 22.0 Unit Overhead X 3.077 z: = 45* 22.5 Unit Overhead X 3.226 zz z: 46 23.0 Unit Overhead X 3.390 zz = 47 23.5 Unit Overhead X 3.478 =Z zz 471/2* 23.75 Unit Overhead X 3.571 zz = 48 24.0 Unit Overhead X 3.774 zz zz 49 24.5 Unit Overhead X 4.000 = — 50* 25.0 * Indicates steps at intervals of 2V2%r. Interlaced in this manner, the same “ROBOT"’ CHART can be used for steps of either 1% or 2y2%,. ** Unit Gross at which these percentage steps operate must be worked out by each theatre, based completely on the amount of his Approved and Audited Overhead. *** Relationship of Theatre Profit to Gross is not a part of any SLIDING SCALE, but is shown here in order to help theatremen analyze their profit position. 25.4% of the gross, overhead can only represent the remainder or 74.6%. Divid¬ ing 74.6 %r into 100% produces a ratio of 1.340. Multiplying the overhead unit of $78.00 by 1.340 would produce a gross unit of $104.52, or a weekly gross of $1,045.20. The 21 %c film rental would equal $219.49, and the 21 %p of such film rental that is theatre profit would equal $46.09. Once again, with the big jump to a 41% film rental, the theatre profit would be 41% of the film rental or 16.8% of the gross, and combined they would total 57.8%r, leaving only 42.2% of the gross Fig. 1 20% 21% 41% SLIDING SCALE "A" Necessary Gross $1,114.60 $1,138.80 $2,025.70 Film Rental 222.92 239.15 830.54 Theatre Profit 111.46 119.57 415.27 SLIDING SCALE "B" Necessary Gross $1,063.90 $1,083.40 $1,720.70 Film Rental 212.78 227.51 705.49 Theatre Profit 70.93 75.84 235.16 SLIDING SCALE "C" Necessary Gross $1,026.50 $1,045.20 $1,848.60 Film Rental 205.30 219.49 757.93 Theatre Profit 41.06 46.09 310.75 November 16, 1955