Motion Picture Herald (Jan-Mar 1956)

r.S. ]\01\-C0MMITTAL ON CIRCUITS’ PRODUCTION . . . Justice Department officials meet with Allied and TOA and indicate decision must await specific circuit proposal by VINCENT CANBY The Department of Justice is not committing itself to general statements of policy, especially on a subject so potentially explosive as production with pre-emptive rights by the divorced circuits. In the course of a meeting in Washington last Thursday with leaders of Allied States Association and Theatre Owners of America. officials of the Department indicated that it could not make any commitment on production by divorced circuits until specific proposals are put before it by the circuits themselves. Brought TO AAllied Pact This, of course, was one of the two points that formed the basis of the joint statement of policy which the two exhibitor organizations dropped like a bomb on the industry last month. In the second point. Allied and TO.\ announced themselves in agreement on the necessity of broadening any arbitration plan to include arbitration of film rentals. In the wake of the latest meeting with Department officials, the boards of both Allied and TOA are now expected to adopt alternate proposals to present to the Department. The Allied board meets in Cleveland early next week in conjunction with the National Drive-in convention, and the TOA board meets in New Orleans March 4-6. Early this week a survey of top officials of various divorced circuits indicated no immediate plans by any except National Theatres to enter production, and National Theatres has sought permission from the Department to produce only for production in its “Cinerama-like” Cinemiracle process. Tiro Hour Meeting The Department of Justice position on divorced circuit production was outlined in a two-hour meeting with officials of its antitrust division. In attendance were Allied president Ruben Shor and general counsel Abram F. Myers, and TOA president Myron Blank and general counsel Herman Levy. Heading the anti-trust officials was Maurice Silverman. Following the session TOA, Allied and the Justice Department all refused to make official, on-the-record comment on the meeting. How'ever, participants gave this off-therecord account; The meeting was devoted to “further ex ploration and discussion” of the two points put before Justice by Allied and TOA officials last month. Most of the meeting w'as spent with the exhibitor spokesmen making a renewed plea for Justice to approve production by the divorced circuits, with each circuit getting priority to show its own films. Only a small part of the time w'as devoted to urging Justice to use its influence with the Senate Small Business Committee and with distributors to have film rentals included in any arbitration system. J\o Proposals Pending The exhibitor officials stressed the product shortage and the difficulties this is creating for the independent exhibitor as well as for the major circuits. They urged the Department to give approval for pre-emptive production by divorced circuits to alleviate this product shortage. The Justice officials were said to have listened “sympathetically” but made no commitments or promises on either the production or arbitration issues. However, they did point out that except for National Theatres’ preliminary feelers on producing films in Cinemiracle, there are no proposals pending from any of the divorced circuits for permission to enter into production. They said, in effect, that the Department is happy to get any information that Allied and TOA w-anted to give, and would keep all this information in mind whenever it has to pass on a specific application from a divorced circuit. How’ever, the anti-trust officials were said to emphasize, the Department can only state its position on the production question with ALLIED BOARD WILL MAP STRATEGY CLEVELAND: Convening here at the Hotel Cleveland Sunday and Monday, prior to the National Drive-in Convention, the board of directors of Allied States Association will map further strategy In its campaign to obtain Justice Department approval for production by the divorced circuits and the recommendation that any arbitration plan Include arbitration of film rentals. The mid-winter board meeting also will hear the decision of Ruben Shor, president, on whether or not his health will permit him to undertake the traditional second term In office. A change In Allied leadership thus could also be in the making. respect to specific applications from the divorced circuits. When any divorced circuit w'ants to come in and make a proposal. Justice officials will talk over the specific case, it was stated. The Justice officials pointed out that this was not a new Department position, and that they had discussed the matter in the past with divorced circuits — such as Stanley Warner (for Cinerama) and National Theatres (Cinemiracle) — and would be happy to discuss it again whenever a circuit wanted to. The Allied-TOA views would be accepted as those of a “friend of the court,” it was indicated. In Hollywood Tuesday Elmer C. Rhoden, president of National Theatres, said that a petition for approval of production by the circuit in Cinemiracle had been filed in Washington that day. Paramount, Warner Studying^’ Questioned in New York this week, Leonard Goldenson, president of American Broadcasting-Paramount Theatres, and Samuel Rosen, executive vice-president of Stanley Warner, both indicated that while they had no immediate plans to enter production, they were currently studying the situation. Concerning another aspect of the trade practice situation, TOA last week issued the text of two letters that threw additional light on the events leading up to the announcement of the TOA-Allied entente. An exchange of letters between TOA’s Mr. Blank and 20th-Fox’s A1 Lichtman, in his role as chairman of the distributors’ arbitration negotiating committee, revealed that the question of when the arbitration draft should be submitted to the Senate Small Business Committee was one of the major factors that led TOA to withdraw "temporarily” its approval of the draft. In his letter to Mr. Blank, dated January 16, Mr. Lichtman urged the submission of the draft to the Senate committee before the then scheduled start of hearings on industry trade practices February 2, pointing to the Senate committee’s 1953 recommendation urging the adoption of an industry arbitration system. Avoiding ‘^Wliiteicash’^ Mr. Blank, in his reply dated January 21, opposed the presentation of the draft prior to the hearings since this “might properly be taken as an indication on TOA’s part to attempt to whitewash distribution.” He went on to say that “while the TOA board approved the arbitration plan, it was not happy with it because it felt that the scope of arbitrability was entirely too narrow. It has always been our position that whatever may be litigated should be arbitrable.” MOTION PICTURE HERALD. FEBRUARY 18, 1956 13