The Exhibitor (1964)

Aarons Issues Arbitration Call Anti-Trust Actions Can't Solve Problems Or Cure Unfair Trade Practices; Bidding Abuses Unchecked DALLAS — Stuart M. Aarons, for 32 years counsel for Warner Brothers and its successor, Stanley Warner, and counsel for Theatre Owners of America, in a speech at the Texas Drive-In Theatre Owners Convention, gave a capsule history of anti-trust litigation, and stated, “Lawyers are dictating distribution policy . . . re-zoning cities . . . evaluating bids . . . while exhibitors have also become legal and anti-trust minded.” Aarons suggested, “We just have to set up some industry tribunal to take care of the problems of some trade practices such as com¬ petitive bidding, blind buying, runs or clear¬ ances, etc. — some industry machinery to take care of these problems expeditiously and in¬ expensively. “Take the problem of the mechanics and fairness of awards in competitive bidding. Take the whole problem of runs and clear¬ ances. Take the current practice of being required to bid for pictures before you have an opportunity to see them, and for play dates four, five, or six months in advance. What we need is actually an industry code of fair practice and an industry tribunal, whether you call it arbitration or a board or whatever its name, to enforce this code. We had such a code back in the N.R.A. days before it was declared unconstitutional. If the industry can’t do it on a voluntary basis, then perhaps we need special legislation for our industry to set up a motion picture tribunal, or arbitra¬ tion boards empowered to act on such matters. Or perhaps before this year ends relief will come from a source which few in exhibition or distribution now suspect. “In essence,” Aarons continued, “what I am telling you is that the existing machinery is inappropriate to cope with our problems. Anti¬ trust suits, while they may be a boon to ambitious lawyers, are really inappropriate for these problems. Even contempt proceed¬ ings under the decree are inappropriate. For example, you and I know that under the decree every distributor is enjoined under penalty of contempt from licensing any pic¬ ture except ‘theatre by theatre on the merits and without discrimination.’ Obviously, if there is any hanky panky in a competitive bid situation, the distributor would be guilty of criminal contempt for it would not be sell¬ ing its picture ‘on the merits.’ Yet, the De¬ partment of Justice would have to employ 100 or more lawyers if it really wanted to police competitive bidding. Similarly, under the de¬ cree, the distributor is enjoined from getting any clearance between theatres not in sub¬ stantial competition in excess of what is rea¬ sonably necessary to protect the licensee in the run granted. The Department would have to employ an additional hundred lawyers to police properly that section of the decree. “Since the decrees in the Paramount case, large buying combines have sprung up all over the country, and new circuits of substantial power, strength, and concentration have grown and are growing. While these are proper subjects for anti-trust scrutiny, we know the Department has done no such in¬ vestigation. If the Department has neither the time nor manpower for such legitimate sub l Brando Organizing Stars To Battle Segregation LONDON — During a surprise visit, Mar¬ lon Brando held a press conference to an¬ nounce a plan to fight racial discrimination. He is calling on stars, writers, musicians, etc., to insist on clauses in their contracts forbidding their work to be shown in apart¬ heid countries and by managements prac¬ ticing segregation. High among his objectives would be those theatres in the south, for he believes that an economic boycott with the arts speaking with one strong dissenting voice can see quick results. “I am prepared not to make another pic¬ ture to see this through,” he said, and claimed that since Hollywood is now con¬ trolled by 10 to 15 stars who he be¬ lieves are sympathetic in view of the sup¬ port for the Washington Freedom March, the movement will have considerable strength. Asked whether it might not be more effective to make anti-segregation films Brando replied in the negative, adding that they would never he presented in the countries or theatres concerned. Brando has the support of Laurence Olivier, Van¬ essa Redgrave, Arnold Wesker, C. P. Snow, and Francoise Sagan, and is hoping to be joined by Paul Newman, Burt Lancaster, and 10 top stars on his return to Holly¬ wood. jects of anti-trust inquiry, how can they afford the time for questionable subjects of anti¬ trust inquiry? I have given this matter considerable thought. I have seen the time and energies of valuable people and the expenditures of vast sums dissipated in anti -trust litigation involv¬ ing matters which Mr. Sherman and Mr. Clayton would be amazed to know are being adjudicated under their statutes. It’s about time that this economic waste ended. All of us in exhibition and distribution must rise above self-interest. We need statesmanship in this industry now as never before. We need discipline in this industry now as never be¬ fore. Without it, we shall continue to drift and drift. . . .” AlP's Arkoff Discusses Changes In Filmgoers In an address titled “Today’s Movie Shop¬ pers,” Samuel Z. Arkoff, executive vice-presi¬ dent, American International Pictures, told the convention, “Researchers at American In¬ ternational are attempting to chart the habits of the movie fan ... a study of not what his habits were yesterday, but what they are today — in an effort to project as accurately as possible what they will be tomorrow.” He said, “Just as was the case with a study of lady shoppers, our study of moviegoers has been looked at against ‘whether the facts confirm what is generally accepted or whether they upset the myths and cliches and half truths which are repeated so often they are finally accepted as gospel truth . . . “A characteristic of modern living is that people generally are more mobile. Our whole pattern of life is more mobile. The younger people are, the more mobile they are . . . ( Continued on page 12) NGC Profit At New High; Theatre Operations Improve LOS ANGELES — National General Corp.’s profit before taxes climbed approximately 200 per cent to a record $908,782 in the fiscal 1964 first quarter ended Dec. 24, 1963, equal to 25 cents a share on 3,590,443 common shares outstanding for the period, it was an¬ nounced by Eugene V. Klein, president. This compares with $303,733 or nine cents a share on 3,445,897 shares outstanding in the yearearlier first quarter. Net income rose 117 per cent to a record $658,782, in this year’s first quarter, equal to 18 cents a share after a $250,000 provision for federal income taxes. This compares with $303,733, or nine cents a share in the yearearlier first quarter without any provision for income taxes. The 1962 earnings do not in¬ clude Mission Pak Company operations as this subsidiary was acquired in 1963. Shares outstanding in 1962 are adjusted for a four per cent stock dividend paid in 1963 and for shares issued in acquisition of Mobile Rentals Corp. The statement of income for the 13 weeks ended Dec. 25, 1962, has been restated to reflect accounts of Mobile Rentals Corp. which was acquired in 1963. Gross income increased 56 per cent to $16,776,123 in the recent quarter from $10,741,378 in the corresponding period a year ago. This year’s initial three months represents NGC’s best first quarter since it became an independent publicly owned entity in 1952, noted Klein. “Our excellent first quarter results stemmed from improved theatre operations and from profits derived from our diversification pro¬ gram,” Klein said. “We expect this diversifi¬ cation to make an increasingly important con¬ tribution to earnings.” Besides operating 216 theatres in 16 western and middle west states, subsidiaries of NGC are now a factor in community antenna sys¬ tems, mobile structures which provide “in¬ stant space” for commercial and educational uses. In addition, NGC’s Concerts, Inc., is the largest west coast buyer of name talent in the live concert field; its Theatre ColorVision Corp. subsidiary is establishing the nation’s first permanent closed-circuit enter¬ tainment network; and its Mission Pak sub¬ sidiary, acquired last August, is probably the largest packager of processed and fresh fruits and other confections in the country. NGC also plans to make a contribution to the available supply of motion pictures, noted the chief executive, as a result of last year’s Federal Court approval giving the company the right to produce and distribute movies. General Artists Income Up NEW YORK — General Artists Corporation (OTC), New York, reported gross revenues and earnings for 1963 of $4,002,525 as com¬ pared with $2,912,411 for 1962. The net profit for 1963 was $223,174 while the loss for 1962 was $887,605. Earnings per share in 1963 were 37 cents while the loss per share in 1962 was $1.97. Lawrence R. Barnett, chairman of the board, said that the increase in revenues and earnings was due to a general upsurge in revenues, an intense costcutting program and an acquisition. MOTION PICTURE EXHIBITOR February 19, 1964