Motion Picture Herald (Nov-Dec 1946)

Goetz and Spitz Universal Stock At $5,000,000 The board of directors of Universal Pictures Company has assigned a value of $40 per share to the common stock to be issued for acquisition of International Pictures Corporation, thus giving a value of $5,000,000 to the 125,000 shares to be issued to William Goetz and Leo Spitz of International, each of whom will receive 62,500 shares. This was revealed in a prospectus filed by Universal last Thursday with the Securities and Exchange Commission in Philadelphia. Last August 6, the date of the plan, the Spitz-Goetz shares had an aggregate market value of $5,406,250, based on the closing price of Universal common on the New York Stock Exchange. The closing price last Thursday was $28, or a present aggregate market value of $3,500,000 for the 125,000 shares. Exceed Book Value The Spitz-Goetz equity in International, according to the prospectus, is represented by $100,000 of net book assets. Thus the aggregate assigned value of the 125,000 shares of Universal common to be issued for the net assets and business applicable to the Spitz-Goetz ownership of International stock, will exceed the book value of such net assets by $4,900,000. Universal reported to the SEC that it had been advised that International, from the time of its organization to July 27, 1946, was engaged exclusively in the production of films, none of which had been released prior to that date. Consequently, International had no revenue and all expenses either were charged to production costs or deferred. Universal purchased for $1,400,000 all of the $1,300,000 par value, non-cumulative, non-voting preferred stock and one-half oi the common stock of International, the prospectus reveals. The remaining half of International's common stock was purchased by Mr. Goetz and Mr. Spitz for $100,000. Universal To Issue Common Under the plan, as disclosed earlier, Universal will issue 280,000 shares of common stock, at the assigned value of $40 per share, to acquire all property, assets and business of International, subject to the company's liabilities. International thereupon will exchange the 280,000 shares in the following proportion : 30,000 shares to Universal as owner of International's preferred stock ; 125,000 shares to Universal as owner of International's Class A common stock, and 62, 500 shares each to Mr. Goetz and Mr. Spitz as owners of International's Class B common stock. The SEC and the Treasury Department have approved the plan. Approval of the New York Stock Exchange for the listing of the new stock is being awaited. Harmon Explains MPEA To UA's Producers The aims and operations of the Motion Picture Export Association will be described to independent producers releasing through United Artists by Francis Harmon, vicepresident of the Motion Picture Association, now on a visit to Hollywood. At present UA is a member of the export association, but practically none of its product is available to the MPEA pools abroad. Individual UA producers are said to be reluctant to accept MPEA terms governing release of pictures and apportionment of revenues in the foreign markets in which the Association operates, feeling that they may fare better by marketing their pictures independently instead of on the pro rata basis. It is expected Mr. Harmon will explain to the UA producers the advantages of a united front in many of the foreign markets, without which all preferential product would be effectively excluded. Some foreign department executives contend that except for MPEA individual producers woulcfmot have access to a number of foreign markets. Hold Screening for Women Of International Unit International Film Foundation, Inc., held a special screening October 23 at the Henry Hudson Hotel, New York, for women of 54 nations, currently in the U. S. for the International Assembly of Women. More than 150 guests viewed four films depicting the people of the world. The four releases of International Film Foundation shown were "Peoples of the Soviet Union," "The School," "The Doctor" and "Lima Family." A questionnaire on the type of films the women would like to see in their countries about America resulted in a majority vote for fewer Hollywood men and women, fewer skyscrapers ; more country life and simple people. Judge Richard S. Hartshorne of East Orange, N. J., was master of ceremonies. He spoke briefly about the films and described the work of the film unit. Warner Club Benefits $125,000 for Year Approximately $125,000' in cash benefits was paid to 3,045 members of the Warner Club, Inc., the Warner Bros, employees' welfare organization, in the past year, according to the annual report of the club president, Stuart H. Aarons. Sick payments amounted to $86,000, while $23,000 was paid for marriage gratuities, $15,000 for birth gratuities, $7,500 to indigent members, $4,200 toward Christmas gifts for members in service, and $14,000 for medical and other emergencies. Wometco Plans Fiesta Wometco Theatres, Miami, began November 1 a 21-day "Fiesta Campaign" to promote goodwill and stimulate business in the circuit's theatres. All managers are contributing ideas for the fiesta, which will eventually be incorporated into a pressbook outlining the pattern of the campaign. California Cities Hit Exhibitors in Revenue Search Many of California's cities, pressed by the demands of growing populations, are seeking new revenue by methods that would leave a further dent in the exhibtors' already heavily taxes grosses, with the most popular method the municipal sales tax. Burbank plans include an enlarged program of business license taxes and a municipal sales levy. The sales impost, half of one per cent, would apply also to the Warner studio, and is seen bringing in $200,000 more annually. Such a tax is already in effect in San Fernando, passed last July. Exhibitors may use the same form they employ for the state sales levy, which is 2^ per cent. Payments may be made monthly or quarterly. The Lynwood council has proposed a sales tax to provide $419,900 for a six-year program of improvements. Although rate cards have been printed and merchants are receiving instructions on computation of the Huntington Park municipal tax, there are indications that opponents may force a referendum. Petitions are being circulated among residents and merchants, which also may be used as evidence if a court injunction against the measure is sought. Meanwhile from Stockton comes another suggestion. The city manager there has urged upon a State Senate taxation committee a change in the state annexation laws to permit cities to take in "populous fringe" developments at will. He said health and welfare expenses made such a legislative change necessary. Stockton, too, is seeking a municipal sales tax. Meanwhile, county property taxes are up. The rate of $1.88 for Los Angeles County for 1946-47 is 49 cents higher than the 1945-46 rate, and 71 cents higher than the 1944-45 rate of $1.17. Only two counties, Alpine and Santa Cruz, show reductions. The former is down six cents, the latter, 3.54 cents. North Central Allied Meets In Minneapolis Nov. 18 All paid-up members of North Central Allied have been invited to attend the midyear convention to be held November 18 at the Nicollet Hotel in Minneapolis. The organization's latest pre-convention bulletin warns exhibitors against buying product on an "adjustment" basis. "In this type of selling," the bulletin pointed out, the salesmen promise exhibitors that if a film fails to do a certain amount of business the rental will be adjusted. However, the bulletin warns, "after the adjustment is granted, one will find very little profit, if any, on the engagement. Usually these adjustments are made to save the exhibitor from a loss but not to give him a profit. . . ." 36 MOTION PICTURE HERALD, NOVEMBER 9, 1946