The Exhibitor (1960)

Modern Considerations Influencing Tax Assessment of Theatres Address by PAUL J. GREENHALGH, Vice-President and General Manager, MOTION PICTURE EXHIBITOR, to Munici pal Assessors of Penna. First of all, I would like to very freely admit that I don’t know the first blessed thing about real estate assessing, about how to arrive at a fair assessment or about how to revise an unfair one. By contrast, after more than 38 years of intimate day-to-day association with the motion picture theatre industry, nearly 30 of it as general manager of one of the leading industry trade weeklies serv¬ ing theatres, I do feel that I know theatres and theatre business, and am qualified to make statements about the¬ atres. Just recently, in the New York Times, Bosley Crowther very aptly described my industry’s people. He said: "People in the motion picture business ore eternal optimists, despite their farniliar disposi¬ tion to cry frequently into their beer. Let so much as a rumor of a slight im¬ provement in the ‘take’ of theatres in, say, Bridgeport, Conn., circulate in the trade and a gleam of anticipation will flash in every distributor s eye. Statistics will be formulated to show that ‘ this year should be better than last ’ and ‘ a substantial step-up ’ in production will be considered by every studio. So responsive are movie people to the faintest stimulus of hope that their right eyes may be flashing signals brightly while their left ones are still water¬ ing down their beers.” Mr. Crowther goes on to say: “We in the business of transmitting information about the movies to the world are regularly made aware of this eagerness to see the brighter side. Scarcely a picture of any consequence opens, without the management of the theatre announcing happily that it has broken some sort of record for the house. It may only be the record for the number of tickets sold to people of Oriental extraction between noon and 2 P.M. on opening day, but it always is a record of which the distributor of the picture can boast in the trade-paper advertisement headed House Record Broken in N.Y.” So much for Mr. Crowther! But after a lifetime in my in¬ dustry I freely admit that it is this optimism, and this wish to always see better business ahead, that is its greatest charm, and the reason why most of us in the industry love it. Loving it, it is just a little hard for me to come before you today and to admit that business has in fact been going downhill for the past 14 years. And that, while steadily rising admission prices and more big road-show pictures have tended to offset the drop in total gross revenues, gross admissions in an era of mushrooming population have actually declined dramati¬ cally. Without further ado, gentlemen— here are the facts. Unlike most industries, which have enjoyed a period of high prosperity during the past decade, motion picture the¬ atres are still in a distress situation. Intense competition from free-TV, inflationary costs of theatre operations, steadily increasing real estate and other taxes, plus competition from a whole variety of other means of recreation both private and public— unheard of in our childhood—, are some of the contributing factors. On four occasions during the last seven years Congress has taken cognizance of our industry’s distress by voting Federal admission tax relief. Unfortunately, most of the helps thus realized have been nullified by rising costs. I now quote directly from testimony by two veteran theatremen, represent¬ ing the two largest theatre owner or¬ ganizations (T.O.A. and ALLIED) be¬ fore the Committee on Labor and Education of the U. S. House of Repre¬ sentatives on May 3 of this year. These gentlemen, speaking under the auspices of the Council of Motion Picture Or¬ ganizations, Inc., in opposition to the proposed $1.25 minimum wage applying to theatre employees, testified as follows : “In 1946, before the sensational growth of home TV, and when the U.S. national population was 140,000,000, there were 19,019 theatres serving this country. More than 6000 (roofed) theatres were closed in the next eight years. The re¬ opening of a small number of these 4wall theatres due to the granting of tax relief, and the rapid expansion of drivein theatres, brought the number of the¬ atres in operation at the end of 1954 to 18,513, according to U. S. Bureau of Census figures. Since then, despite the in¬ creases in our national population and in our national income, the number of theatres has steadily declined. By the end of 1958, when our national population had reached nearly 175,000,000 (up 25%) the number of theatres in operation had dropped to 15,694 (down 17*2%). “Between 1954 and 1958, for instance, the number of theatres in Georgia declined from 466 to 351 (down 24.7%), in Illinois from 785 to 631 (down 19.6%), in New York from 1159 to 1001 (down 13.6%), and in Pennsylvania from 941 to 820 (down 12.8%). All of this, mind you, is drawn from U. S. Bureau of Census figures issued in January and February 1960. Although Bureau figures are not available for the past 14 months, our own industry reports indicate a further substantial decrease during that period .” Now, the closing of a theatre is not only a loss to its owner but is a serious economic set-back to the entire community it serves. Many neighboring merchants, who depend in large part on the patronage of the Friday night and Saturday visitors from adjoining farm lands, know from personal ex¬ perience that a town without a theatre is a “dead town”. Even those who don’t patronize the theatre recognize the excitement and thrill of the lighted theatre marquee on “Main Street”. Many such closed theatres are torn down and the sites converted to parking lots, or are taken over by non¬ tax-paying institutions to which they are suited. This com¬ pounds the loss to the community, to the state and to the nation, through both loss of jobs and loss in various taxes. Just to cross-check the above numbers of theatre closings, let us again refer to U. S. Census Bureau figures relating to gross receipts. While the gross national product of the nation reached the highest level in history in 1959, motion picture theatre receipts dropped to their lowest level in 15 years. In those same four Census Bureau years between 1954 and 1958 gross receipts dropped from $1,408,406,000 to $1,093,435,000. This, gentlemen, was a four year decline of $314,971,000 or 22 percent. Here in the state of Pennsylvania the drop was from $77,626,000 to $57,883,000 or just under 25%. And we all know that this represents an even greater industry loss, because the costs of operating and doing business kept ( Continued on Page 16) GREENHALGH September 21, 1 960 motion picture exhibitor 15