The Exhibitor (1966)

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Tight Money Pinches Indies Now Under Pressure In Setting Up New Films; Money, Even When Available, Costs More For Production By MARK GIBBONS HOLLYWOOD — Tight money is pinching like a stout lady’s girdle, but to date, the movie industry is not wailing — except for a few in¬ dependents who are hurting but not exactly bleeding to death. The major studios have it made because their credit is good, but pity the poor independent who must go out and scratch for fodder to bring the chickens home to roost. Take for instance, John Beck: Beck is an indie producer who has brought in 10 solid money makers; not blockbusters, but profitable to investors and exhibitors. Cur¬ rently, he has a shooting script ready for a film called “Okay, Private Dilbeck,” which involves a rustic who enters World War II as a con¬ firmed goldbricker and winds up as a hero. Beck has a director for the film; has lined up Mickey Rooney to play in it; and has options to utilize George Hamilton and Peter Fonda. Beck can bring in the film for under $1 million, his production estimates show — and shoot it in color to boot. A major studio would budget $10 to $12 million for the same type of flicker. But to save his life, Beck couldn’t get a bank loan on the picture by using it as sole collateral! For why? Money not only is tight, it also is, when available, costly. And while banks like the short-term features and relatively high rates of motion picture financing, they are demanding more guarantees than ever before they will risk the cash. Consequently, Beck has the alternative of scratching for private financ¬ ing or of taking his film to a major studio, which will back him and then in turn will borrow the money from a bank. Next, the terms of the loan won’t be as easy as they were a short time ago when Beck entered into a deal with a major to produce “The Singing Nun.” That money cost Beck six per cent, but now, Beck says, “it wouldn’t surprise me in the least for the rate to go 6/a or 6$4 per cent, although I’d fight to keep it under seven per cent.” Banks throughout the United States are verifying Beck’s financial prognostication and outlook. “In the past,” says A. H. Howe, who for 20 years has been in charge of lending Bank of America funds on films, “an inde¬ pendent producer might have lined up some¬ body with, perhaps, government bonds totaling the amount of the loan and used them as collateral. But now the answer is different. We simply don’t have the cash.” Then Richard Hines, of Chase Manhattan Bank, adds: “We would rather lend to a company these days than on the picture, on the theory we get a wider dispersion of assets. And we don’t have the legal bother of placing a direct lien on the picture.” Chase recently lent Filmways, Inc., also an independent producer, a “substantial amount” to finance a film now being shot in England. Bankers affirm that lending policies are be¬ coming more rigid in more other ways. Hines says “compensating balances (the proportion of the loan which must be left on deposit) are at 20 per cent now.” As entertainment borrow¬ ers are fully cognizant, when they have ample Birmingham, Ala., Censors Kayoed By Court Ruling BIRMINGHAM, ALA. — The Honor¬ able Robert C. Giles, Jefferson County, Birmingham, granted a decree enjoining the operation of the Birmingham, Ala., Censor Board, in an action brought by Columbia Pictures as representative of the member companies of the Motion Picture Association of America. Judge Giles held that the Alabama stat¬ ute providing for the establishment of the censor board violated Alabama law. Fox Sets Rentals Record NEW YORK — Twentieth Century-Fox, through its Italian distribution arm, Dear Film — 20th Century-Fox, amassed the largest single week’s earned film rentals of any com¬ pany in the history of the Italian motion pic¬ ture industry for the period beginning Sunday, Nov. 6, through Saturday, Nov. 12, it was announced by Seymour Poe, 20th-Fox execu¬ tive vice president. The figure of $522,853, or 326,783,000 lire, was achieved despite devastating floods in key population areas such as Florence and Venice. The films which contributed substantially to the record total are “The Bible,” “How to Steal a Million,” “Fantastic Voyage,” “The Blue Max,” and “Modesty Blaise.” guarantees, their credit is as high as the sky because their funds readily are available. An official of City National Bank, a Beverly Hills institution makes more than a few loans to video ventures, informed MOTION PIC¬ TURE EXHIBITOR: “Recently, we signed the papers for the financing of a major television network show. We like tv network shows. They pay back fast. As soon as you get seven or eight segments completed, a $1 million loan begins to pay back at $100,000 per week.” Contrariwise, entertainment borrowers who qualify for loans are seemingly happy to get them at the current higher prices. Thomas J. McDermott, president of Four Star Television, a Hollywood-based indie production firm, said: “Under the circumstances, I think there have been times when banks wish we would go away.” Then McDermott added: “Terms the past few months have been stiffer.” Next Marvin Mirisch of Mirisch Co., another sub¬ stantial indie, opined: “We’ll make three films during the next quarter, and we’re just com¬ pleting the financing on one. I suspect the next one will cost us a half a point more.” Mirisch releases its films through United Artists which in turn guarantees production loans for the producer. Even in normal times, it is difficult enough for an indie producer to get started on making a picture, to say nothing of eventually getting it before the eyes of the public. In taking over financing of the film, the major usually takes over distribution rights. Under the terms of the arrangement, the distributor takes between 65 per cent and 70 per cent of the gross while the producer takes the rest. After all costs have been met, including the producer’s original expenses and his production fee, the profits usually are split 50-50 between the major and the indie. Producers What Is A Film Pioneer? Valenti Provides Answer NEW YORK — “There is a similarity in mo¬ tion picture pioneers,” said Jack Valenti at the Motion Picture Pioneers dinner here. “They are curious men; they are resourceful men, they are sensitive to creativity — and prob¬ ably are the only managers in the world who combine in their bones and their blood the odd mingling of hard-sense business commonsense, and the delicate apparatus of creative intuition.” After describing the scope of the American motion picture around the world today, with some 270,000,000 viewers each week, he said: “And even this, to many wise observers, is only a beginning. The future is yet to be mea¬ sured. This is what the great men and those who came after them have wrought. “Tonight, there sit on this dais men who span the old and the new generation, the giants who bestrode the beginning, shaped the pres¬ ent, and give form to the future.” Valenti praised “the pioneers whose sweat and skill and strength moulded what princes and parliaments, dictators and democrats have acknowledged to be one of history’s most pro¬ found and persuasive forces — the reenactment of the human drama on film.” Recognizing William Forman, who was be¬ ing feted as Pioneer of the Year, Valenti said: “The greatest honor paid you tonight, Mr. Forman, is the presence of so many of your peers on this dais and in this room. They come to praise you — and to exalt you— and by their being here to tell you of their affection, of their regard, of their loyalty, and of their re¬ spect. In a world too often grown sour, and too much grown cynical, and too lately grown negligent, the loyalty and love of one man for another is the richest coin of the realm. There is really no more precious treasure to be wanted or desired.” Frank, Sinetar Building BINGHAMTON, N.Y. — Si Frank and Sid Sinetar, veteran theatre operators, have an¬ nounced plans for the construction of a 900seat theatre in a shopping center to be erected on Route 17 in Vestal, N.Y., which is on the outskirts of the city of Binghamton. Frank and Sinetar formerly did business as Town and Country Theatres and sold eight houses in their chain to National General Corp. in March, 1966. The new Vestal Theatre will be built by Frank and Sinetar themselves, having taken a long term land lease in the heart of the new shopping center. The theatre will be built in the traditional style associated with Town and Country Theatres and will have the most modern projection equipment. Cen. Cinema Opens Three BOSTON — General Cinema Corporation opened three new Cinemas on Nov. 16. Two theatres were opened in Columbus, Ohio — one at the University City Shopping Center and the other at Great Western Shopping Center. Additionally, the Boston-based chain also opened Cinema I and II at the South Shore Shopping Plaza in Braintree, Mass. The open¬ ing of the three theatres now brings General Cinema Corporation’s total to 122. November 30, 1966 MOTION PICTURE EXHIBITOR 5