Motion Picture Herald (Mar-Apr 1947)

FOUR MAJORS FILE JOINT DECREE APPEAL; PARAMOUNT, ALONE, ATTACKS BIDDING by RAY LANNING Wednesday, at three o'clock in the afternoon, the five theatre-owning defendants in the U. S. versus Paramount, et al, antitrust suit filed their appeals from the New York Federal District Court's December 31 final decree. Paramount filed alone, the only one of the five to state that the court was in error in decreeing competitive bidding and single sales. RKO, MGM, Twentieth Century-Fox and Warner Brothers filed a joint appeal. Both appeal documents, filed with the District Court, paralleled each other with the exception of the competitive bidding issue. Both documents cited errors in the court's decree, findings of fact, and conclusions of law, centering their attacks on the court's prohibiting of fixing minimum admissions, joint ownership of theatres and theatre expansion and the court's failure to order the establishment of some sort of an arbitration system. RKO, MGM, Twentieth Century-Fox and Warners listed 39 errors ; Paramount, being a little more particular and detailed and concerned with the bidding provisions, listed 47. All of the appeals in the suit in Equity No. 87-273 have now been filed. .Universal and United Artists filed their appeals February 20. Details of their appeals are on page 15. The Department of Justice filed its appeal last Friday. Details are on page 16. Columbia, the first to file its appeal, filed February 6. Exhibitor Groups Appeal On Intervention Issue The third party at interest — the exhibitor —was heard from too. The American Theatres , Association, represented by Thurman Arnold, and the Southern California Theatre Owners Association, represented by Paul Williams, Wednesday filed appeals with the New York Federal District Court from the order which barred them from intervention. The Confederacy ot Southern Associations was to appeal from the same order later this week. All three groups contend their exhibitor members are entitled to a voice in the decisions. The arguments in the anti-trust suit begun July 20, 1938, now move to Washington. The joint "Statements as to Jurisdiction," signed by all five of the theatre-owning defendants, raised four substantial questions on which the appeals were based. 1. The court's holding that it lacked the power to continue the arbitration system— the court merely recommended that THE SCOREBOARD This week the final objections to the decree in the anti-trust suit were entered in the New York Federal District Court and could be tallied. The objections at the end of Appeal Week: Metro-Goldwyn-Mayer, Twentieth Century-Fox, Warner Brothers and RKO Radio: the failure of the court to provide for a system of arbitration, the court's prohibitions forbidding fixing minimum admissions, joint ownership of theatres and theatre expansion. Paramount: the competitive bidding order, the single sales order and everything to which MGM, RKO, 20th -Fox and Warners objected. The Government: the court's failure to decree divestiture and absolutely prohibit theatre expansion, the system of clearances. United Artists: competitive bidding, single sales, price fixing, placing the burden of proving clearance on the distributor, most other major provisions. Universal: competitive bidding, prohibition of franchises, being found conspiring to maintain admissions and clearances, single sales, most other major provisions. Columbia: competitive bidding, single sales. some such system be established — is con trary to the decision of the Supreme Court in the U. S. versus Swift and Company suit. 2. The decree deprives the defendants of their rights, which they hold under the Copyright Laws and the common law, to protect their interests by contract. There is nothing in the anti-trust laws which prohibits the owner , of a motion picture and the person authorized to show the picture to agree as to what the admission price shall be. 3. There is no justification for the decision of the court in prohibiting the continuation of joint ownership of theatres between a defendant and an independent exhibitor. This decision, prohibiting such an arrangement, said the defendants, "did not result from the trial of any issue tendered by the plaintiff or contested during the hearings." 4. The failure and refusal of the court to permit a defendant exhibitor to expand his theatre holdings "for the purpose of acquiring theatres or interests therein in order to protect his investments, or in order to enter a competitive field," with permission of the court, "stands as a barrier to healthy growth" of the industry and is "far more restrictive" than the decree directed by the Supreme Court in the U. S. versus Crescent Amusement suit. Paramount, alone, stated the court was in error in decreeing paragraph eight, Section II, of the decree : "From licensing in the future any feature for exhibition in any theatre, not its own, in any manner except the following. Then follows detailed instructions for setting features theatre by theatre to the highest bidder. Paramount, alone, also stated the court was in error in decreeing paragraph seven, Section II, of the decree which prohibits the defendants from entering into a license in which the sale of one feature is conditioned upon the sale of another and which gives the licensee the right to reject 20 per cent of the features not trade shown prior to the granting of a license. Vigorous Objection to Price Fixing Ban Both appeal documents, the four companies combined and Paramount singly, were minutely concerned with price fixing of admissions to all features and with roadshows in particular. "The prohibition (against price fixing) has particular effect in the case of a feature of unusual cost, where it is necessary to roadshow the production at a specified admission price, in order to recover the exceptional investment," chorused the five defendants. "The decree, as shown, will present the ' production in the future of such occasional and unusually costly features, since their production costs can only be recovered by roadshow exhibitions. Thus the decree not only deprives each defendant of rights which he is entitled to enjoy under the Copyright Laws and the common law, but, in addition, the public will be deprived of the entertainment value of the exceptional motion picture." Asks Supreme Court to Pass On Questions After Hearings "Each of the appellants," concluded the appeals, "is of the belief that all questions here raised as well as others raised by the respective Assignments of Errors . . . are substantial and each respectfully petitions the Supreme Court to pass on them after plenary hearing." Accompanying is the detailed "Assignment of Errors" as listed by RKO, MGM, 20thFox and Warner Brothers. Paramount's 12 MOTION PICTURE HERALD, MARCH I, 1947