Motion Picture Herald (Apr-Jun 1952)

LAWRIE OIV XFFC Points Out Profits and Says Production Cost Has Declined in Year by PETER BURNUP LONDON : Suave, accomplished banker Janies Haldane Lawrie, the National Film Finance Corporation’s managing director, had a roseate air when he faced a press conference here last week following publication of the Corporation’s annual accounts. He pointed to the profits made by the corporation which, seen against the background of the millions loaned by the government in the three years of NFFC existence and put out in the chancy enterprise of British film production appeared infinitesimal. Profits for the year came to £10,891. The accounts also showed an overall deficiency to date of no less than £364,304. Nevertheless, the previous year’s profit-and-loss account had revealed a deficit of £675,850 converted now into a profit for the year. Shared in Five Pictures The profit arose in an excess of the interest charged to the customers over the interest paid by NFFC to the government. (Borrowers paid £206,357 interest to the NFFC ; whereas the government charged the corporation on £109,237 only.) But NFFC shared also in the profits on five of the films which it had helped finance. Mr. Lawrie declined to name the films in question, saying it would be unfair to other pictures to do so. NFFC’s share in the fortunate five came to £32,996. Mr. Lawrie feels that next year both the number of such films and the amount of profit should be considerably larger. Newsmen had the feeling that they were stockholders attending an annual accounting of the stewardship of their affairs. Mr. Lawrie claimed that his operations had led to a substantial reduction in all production costs. The average excess over budget on films costing over £175,000 has been reduced in two years by 74 per cent, but in the last two years 11 out of 12 went over budget, as against one out of the 19 costing between £75,000 and £125,000. Balcon Loan Surprises Inclusion of the name of Sir Michael Falcon’s Ealing Studios among NFFC borrowers provoked considerable surprise in the trade, but Reginald Baker, Ealing’s business chief, quickly explained that Ealing does not borrow money from NFFC to make pictures, but that it takes a loan when the finished picture is delivered to the distributor — in this case J. Arthur Rank’s General Film Distributors— ^and to tide the company over until distribution receipts are in. Mr. Lawrie claimed that in the past year REPORT YEAR the average amount of screen-time got into the can per day had gone up from 1.18 to 1.66 minutes. And he was willing, too, to claim that his Group Three Scheme — designed to help on novitiates in the business — had already thrown up promising candidates for Fame. Questioned about two notorious flops known to have been special pets of Mr. Lawrie, the NFFC chief urbanely confessed to the complete failure of the films in question but maintained nevertheless that they were “artistic successes.” “Tough” Policy Cited Back of all that amiable, apparent, beneficence, however, was a sense of NFFC toughness to the supplicants. Mr. Lawrie admitted that certain of his corporation’s methods were what he called “unpopular but inevitable.” NFFC, he said, has been concentrating on two financing methods ; one involving the grouping of films so that profits on winners are not distributed until the losses on the others have been recovered, and the other financing films singly and taking a large share of the profits to cover losses on other individual pictures. The just issued accounts show that £1,610,000 has been provided against possible losses on £5,307,303 of net advances outstanding. Prospects of repayment of a considerable part of those advances lie very much in the uncertain future, £1,000,000 of those possible losses are set against the now notorious advance of £3,000,000 to British Lion. Mr. Lawrie admits that the Eady Plan has made his path easier in the last year. But examination of his report discloses that distributors have benefited more therefrom than NFFC and that “Eady” adds to the profit of already profitable films rather than run-ofthe-mill productions. On a sample of 34 films in which NFFC was interested the proportion of profitable pictures has not been increased greatly by the plan. The estimated number has increased onlv from 13 to 16 or 17. Rank Optical Company Shows £2 1 1 ,62 1 Profit LONDON : Preliminary figures of J. Arthur Rank’s British Optical and Precision Engineers Ltd., for 1951 show a pronounced turn for the better, revealing a group net profit of £211,621 against £116,073 in the previous year. The figures were struck, moreover, after the payment in tax of £304,020 compared with £77,088 in 1950. Payment of preference dividends has been brought up to date but Mr. Rank has decided that the time has not yet come for a resumption of dividend payments on the ordinaries. He takes the view that the company’s liquid resources require to be conserved. British Units JSfnisy Over U. S. Bact LONDON : With the parties directly concerned— the British Government and the Motion Picture Association of America — preserving an aloof silence, other interests persist in providing voluble counsel on the pending review of the Monetary Agreement. In its annual report issued last week, British Equity joins the clamor raised at the A.C.T. meeting; although it is fair to report, not with the same violent antiAmericanism. The report laments that there has been no improvement in the production of British films during the year ; fears that the figures show that British production is becoming stabilized at a low level. Says the report : “The resources of the film production industry are sufficient to 'produce at least double the number of films which we have been turning out during the past three years. There are sufficient studios, technicians, actors and ideas available. It is, however, doubtful whether this potenial capacity for increased production will remain in being. Studios are being sold and converted to other purposes. Thus during the past year Teddington Studios, with their two large stages, have been sold. “It is ironic to recall that Teddington Studios were re-equipped after the war with the proceeds of a claim from the War Damage Commission. Now all this money and effort have been lost. Another example is Denham Studios which are still closed. Rumor has it that they, too, are in danger of being sold. The human resources of the industry are dwindling in the same way. Many technicians are finding other jobs and their skill and training is thus lost. British studios employ only half the number of technicians, craftsmen, etc. who were employed during the peak period at war’s end.” The report reveals that in association with other unions on the Film Industry Employees Council — they include the A. C. T. — Equity is engaged in formulating proposals for the revision of the Agreement. It claims also that the problems of the industry cannot be solved “until there is a fundamental change in its structure which will give the producer a large share of the box office.” Foreign Aid Measure Is Approved by Committee The foreign aid bill approved by the Senate Foreign Relations Committee in Washington provides for continuation of the Government’s information media guaranty program, “under such agency as the President may determine.” Under the program, the Government guarantees film companies and other information media they will be able to convert into dollars part of their earnings from sending films, books, magazines, and newspapers to foreign areas. 40 MOTION PICTURE HERALD, MAY 10, 1952