Motion Picture Herald (Mar-Apr 1947)

MAJORS PREPARE FOR DECREE OPERATION DESPITE APPEALS Widen Bidding Experiments, Study Clearances and Plan End of Pools With all of the appeals from the decree in the U. S. versus Paramount, et al, antitrust suit filed and out of the way, the eight defendants in the action this week turned to implementing those portions of the decree not being appealed and solidifying their arguments on the provisions which are being protested in anticipation of appearances before the U. S. Supreme Court. This week the defendants were deep into competitive bidding experiments, beginning to dissolve their pooling agrements, reviewing the clearance situations and arguing the pros and cons of continued arbitration. Two to Ask High Court For Bidding Stay Competitive Bidding: By midweek, •only two defendants, Columbia and Universal, had announced they will ask the Supreme Court for a stay of the competitive bidding order, which is to go into effect July 1. United Artists had reported itself definitely of the opinion that no postponement of any part of the decree would be asked. The five theatre-owning defendants are not likely to ask for a stay of the bidding order since only Paramount appealed the order. The Department of Justice has indicated it will not appeal the order. While all the five majors have, in the past, been conducting experiments with competitive bidding, there was even more intensive study of the order this week and last. Twentieth Century-Fox this week acknowledged that bidding experiments were being conducted in the Minneapolis area. Auction ■selling was the chief topic of last Friday's closing session of the two-day Warner Brothers district managers meeting held at the home office. Howard Levinson, a member of the company's legal staff, outlined the procedure to be followed in complying with the decree. Paramount Offering Six On One Contract Form Paramount is currently offering six PineThomas productions on one contract form, but the license for each film will be negotiated separately for individual theatres. Charles M. Reagan, vice-president in charge of distribution, declared that Paramount would adhere to the bidding provisions of the decree. In Pittsburgh, last Thursday, Edward C. Raftery, United Artists president, opened a four-day regional meeting by warning that "no side agreements can be written into contracts with exhibitors" since such agreements "will be termed unlawful" and "leave the burden of responsibility upon the distributor." Clearances: The problems posed by the decree order placing the burden of proving "reasonable" clearance upon the distributor has prompted the theatre-owning defendants to send their lawyers out into the field to survey the whole problem of clearances. Paramount has assigned four attorneys to the field. MGM has reported that it has attempted to check up its clearance problems through a series of regional meetings, but indications are that the company's lawyers will go into the field. Warner Brothers discussed clearance problems at its district managers meeting and are understood to have assigned at least one lawyer, possibly two, to the field. RKO Radio and Twentieth Century-Fox discussed the clearance provisions at their recent New York sales meetings and are understood to have decided for a survey of the field. Fox West Coast Splits California Holdings Pooling Agreements: In one of the first actions complying with the court order prohibiting the continuance of pooling agreements, Fox West Coast has completed a splitup in which 17 houses in Southern and Northern California, which the company has been operating in pooling agreements, will pass to individual control. The circuit will take over 100 per cent operation of 24 others when the paper work now in process is completed about July 1. Paramount's pooling agreement with Fox West Coast will be dissolved the end of March. Fox will relinquish the operation of the St. Francis, the Paramount, and the State and Paramount will resume control. Another change in the management of Paramount theatres was also announced this week by Leonard H. Goldenson, vice-president in charge of theatre operations. When the Middletown, N. Y., pooling agreement with Fabian Theatres, involving three houses, is dissolved March 29, the Paramount will return to Paramount, and the State and Stratton will revert to Fabian. Arbitration Moot Point With Divided Sentiment Arbitration : During the past week there has been evidence both of renewed interest in arbitration and a slackening of interest. Last Friday new arbitration complaints were filed in the New York and Cleveland tribunals, Tuesday a complaint was filed in Cincinnati, and additional complaints are expected to be filed in Albany and New Haven, thus prolonging the life of those tribunals. New cases may be accepted until April 1. The five majors have appealed the court's order ending the consent decree system of arbitration. That was the evidence for arbitration. The evidence of sentiments against arbitration was last Wednesday's cancellation of the meeting scheduled for March 10-11 in New York when Fred Wehrenberg's proposal for a motion picture forum for handling distributor-exhibitor disputes by voluntary arbitration was to be discussed. The meeting was cancelled because of exhibitor sentiment that forum plans should be delayed until the Supreme Court acts on the decree appeals. CSA Appeals On Intervention The Confederacy of Southern Associations last Friday filed its appeal from the New York District Court's denial of its plea for intervention in the anti-trust suit, claiming that the Department of Justice's opposition to competitive bidding does not represent CSA interests since the Department objects to the bidding order only on the ground that it is an inadequate substitute for divorcement. In CSA's petition asking the Supreme Court to eliminate the bidding provisions, the organization contends that without competitive bidding, the other directions of the New York court "are fully adequate to terminate the restraints of commerce found to be unlawful." Competitive bidding would cause "irreparable damage," the appeal said. The damage, according to CSA, would come from several causes : larger theatres would outbid the independents ; the theatreowning defendants may never have to enter the competitive market ; the definition of a competitive area is so vague that it may result in the elimination of all clearances ; there is no practical measure by which a defendant may determine to which exhibitor to award a feature ; the decreed method of licensing will increase admissions ; the method overlooks such business considerations as goodwill and reputation; the method forbids necessary post-exhibition adjustments. Myers Sees "Clean-Cut" Decision in U. S. Suit A "clean-cut decision, one way or the other," involving every issue in the New York anti-trust suit will be decided early in 1948, along with a decision on the antitrust suits involving the Schine and Griffith circuits, it was predicted last weekend in Washington by Abram F. Myers, chairman and general counsel for Allied States. Basing his conjecture on the Government's appeal and the appeals of Columbia, United Artists and Universal, he said the decision would bring a brighter era. MOTION PICTURE HERALD, MARCH 8, 1947 19