Motion Picture Herald (May-Jun 1943)

May 15, 19 4 3 MOTION PICTURE HERALD 17 EXHIBITORS TELL U.S. HOW CONSENT DECREE FAILS Both MPTOA and Allied Ask Revision of All Basic Practices Exhibitors don't like the Consent Decree, after three years of trial, any better than they did when it was first proposed in settlement of the Government's anti-trust suit against the major motion picture distributors. Nor do they like the present order of trade relations between exhibitor and distributor. The two leading national exhibitor organizations in meetings of their directors last week set down bills of particulars. The Motion Picture Theatre Owners of America at New York and the national Allied States Association at Detroit specified in separate briefs their complaints against the Consent Decree. Both proposed again most of the trade practice changes which they have sought for many years. Briefs Submitted to Department of Justice The two documents were destined primarily for the film unit of the Department of Justice's anti-trust division at Washington as expressions of exhibitor recommendation as to what should be done when the decree trial period expires on November 20th. They also appeared intended to serve notice to distributors, the rank and file exhibitor, and anyone interested, that a new trade practice fight is brewing. Indicative of the fighting sentiment among some theatre operators was a report in New York that several important exhibitors planned to sue distributors for triple damages under the anti-trust laws unless selling methods are changed after November. They will charge, an attorney admitted, that distributors conspired to raise rentals by selling in small blocks, on percentage, and in special single deals. Exhibitor Units Prepare for Battle The MPTOA and Allied briefs were in many aspects battle plans for a new struggle to change the rules which attempt to govern the traditional contention between buyers and sellers of motion pictures. They served notice of resolution by exhibitor leaders to do something about changing the decree to a pattern which would be more to the liking of the theatre operator. Allied made its complaint public. MPTOA tried to keep its secret, reportedly "at the request of the Department Justice." The two exhibitor organizations took closely parallel stands on a number of issues, but split widely on others. Both echoed most of the trade practice changes for which each has been campaigning for a dozen years, or longer. Allied's suggestions bore similarity to numerous, and generally unsuccessful, legislative regulations sponsored nationally and locally by its units. MPTOA's program re called the "Ten Points" which Edward Kuykendall, president, first urged upon the trade in 1936. Agreement was apparent in the stands of the two organizations on the operation of the decree selling methods. Both appeared vigorously opposed to the small block selling, advocated a return to full season sales and the granting of liberal cancellation privileges. MPTOA still wants at least 20 per cent unrestricted cancellation. Allied made a direct demand for divorcement of distribution from exhibition. MPTOA was reported to have directed its attention principally to amendment of the decree in November. Both groups were in unison in condemning the decree as too limited and asking a wider scope for arbitration and other remedial sections. There was general agreement that the arbitration provisions have been too circumscribed. Mr. Kuykendall on Friday last week admitted the similarity of the two programs. They differed principally in approach, he indicated, expressing the belief that the MPTO proposals were "less radical" and would be easier to carry into practical effect. The three-day MPTOA directors' meeting at the Hotel Astor ended Thursday. The session was devoted largely to the question of product and price, and the related sales practices covered in the brief prepared by Mr. Kuykendall. For the first time in many years the board went on record as being concerned with the cost of film. A resolution condemned the present small block selling, as wasteful and expensive and demanded a return to full season sales with cancellation. A committee was named to further study product and prices and to advise MPTOA members. The directors also approved unanimously the 40-page brief submitted by Mr. Kuykendall to Robert Wright, head of the Department of Justice anti-trust unit. Its recommendations were in the pattern set by the original MPTOA "Ten Points" seven years ago, it was reported. The text was not released to the press. The MPTOA brief was reported to urge : 1 — Full season sales. 2 — Unrestricted 20 per cent cancellation rights. 3 — Establishment of local mediation machinery to settle disputes between exhibitor and distributor. A — A wider scope for the arbitration system set up by the decree. 5 — The use of arbitrators familiar with the industry. 6 — Guarantees to every theatre of "the right to buy," without discrimination in favor of affiliated or independent circuits. 7 — Control of circuit expansion. 8 — More effective rules against the con ditioning of features, or blocks, on one another. 9 — Penalties for forcing shorts. 10 — A general demand for the relief sought in the original Government antitrust suit. The MPTOA board set up a trade practice committee to compile information on selling terms, including price. It will also intervene in behalf of complaining members who present evidence of being unable to negotiate a fair film purchase. The members of the committee are, Herman Levy, New Haven, general counsel, as secretary, Max A. Cohen, Sew York ; Lewen Pizor, Philadelphia; Rotus Harvey, San Francisco ; Arthur Lockwood, Boston ; O. C. Lam, Rome, Ga. ; and Mr. Kuykendall. Mr. Kuykendall and A. Julian Brylawski of Washington were named to a committee to meet with the War Production Board on means of securing replacement parts for member theatres. Rotus Harvey, Max A. Cohen and Mr. Lam also are to represent the MPTOA in obtaining an adequate supply of advertising accessories. Mr. Kuykendall on Friday described the session as one of the "most constructive in the history of the organization." Aside from the trade practices discussion, he said the appearance before the board of Lowell Mellett, chief of the motion picture bureau of the Office of War Information, was one of the most important events of the meeting. In an off-the-record discussion Mr. Mellett was reported to have given the MPTOA a very direct and forceful account of the Government's plans for using the screen as an information medium. Members expressed hope that from the discussions a standard practice for distributing and paying for both OWI and Hollywood war shorts would be worked out soon. Allied Again Urges Theatre Divorcement Allied States Association at its directors' meeting in Detroit on Thursday of last week again demanded theatre divorcement and dissolution of affiliated circuits, "fortified by proper injunctions," as the "only effective and permanent cure for the monopolistic conditions within the motion picture industry." Further, the board urged extensive revision of the Consent Decree, if the Department of Justice decides in November to postpone seeking the divorcement relief demanded in the New York anti-trust suit. "If the Attorney General should nevertheless decide to postpone such remedies for an additional test period, then the Consent Decree should be amended in accordance with the recommendations set forth in the general counsel's report," the board moved. Copies of the resolution were sent to the U. S. Attorney General and to other exhibitor organizations. Abram F. Myers, general counsel of Allied, in a 47-page brief, cited what he believed to be shortcomings in the Consent (Continued on page 20, column 1)