Motion Picture News (Nov-Dec 1925)

December 5 , 19 2 5 2639 Universal-UFA in Affiliation; 15,000,000 Mark Loan Made Laemmle to go tcr Berlin to Close International Deal ANOTHER important step in the internationalization of the motion picture industry became known this week with the official announcement that Universal Pictures Corporation, through a loan of 1."), 000,000 gold marks (about three and one-half million dollars) to the Universnm Film A.G., better known as the UFA, of Germany, is to become affiliated with, that company in production, distribution and exhibition. Universal will distributee some of the UFA productions in America and the German company will handle the pick of the output of Universal in its theatres and exchanges. Carl Laemmle left Universal City on Tuesday, enroute for Berlin to close the final arrangaments. This marks the third important deal in the GermanAmerican situation brought about by the Kontingent system. The first was that between United Artists and the IFA which gave the American company an interest in production and distribution in Germany by IFA. The second deal was that between Fox Film Corporation and DEFA, announced exclusively in The Motion Picture News some time ago, under which Fox is producing several pictures in Germany for German distribution only, thus giving that company several Kontingent permits to import its own productions into Germany. The Universal-UFA deal is much the most important, however, since it is the first definitely calling for an interchange of product and cooperation in production. Added importance is given by the fact that UFA will have some 150 theatres, when those now building are finished, in which Universal pictures will naturally be well represented. Newspaper reports to the effect that the entire Universal output is to be distributed in Germany by UFA, and that Universal pictures will be the only American films shown in the UFA theatres, were strongly denied by the German company. It was pointed out that this company's investment in theatres is enormous and that it could not jeopardize that investment by discontinuing the showing of the pictures of certain other very popular American stars who have done much to build up the popularity of the motion picture in German. It seems obvious, however, that other things being equal Universal will enjoy a strong preference in the line-up of the UFA releasing schedule and the books of the UFA theatres, giving that company a heavy advantage in the international situation. There has been a great flurry of late in the German trade and daily press over the financial condition of UFA. Reports were published and denied to the effect that it would pass the current dividend. The company has gone into theatre construction on a large scale, at the same time expending mony on lavish film productions designed to reach the American market. With the exception of "The Last Laugh," these pictures had not yet found a place on the American market, and tlrs is believed to have placed UFA in a situation where additional capital was badly needed to continue production and complete theatres under construction. Once these pictures are released, it is expected, and the money tied up in them is returned, the company will once more be in a healthy operating condition. The Universal loan of 15,000.000 gold marks, running for 10 years at eight and one-quarter per cent., will re'ieve this stringency and enable UFA to continue its expansion policy. It is known that other American companies have been angling for this same sort of deal, including two of the "Big Three" companies, but in each case the offer of the loan was conditional upon UFA distributing and exhibiting the entire output of that company in Germany, which UFA was unwilling to do. A similar deal very nearly went through some time ago at the time of Joseph M. Schenck's visit to Germany in the interests of United Artists. The terms of the arrangement were practically identical, but the deal fell through because of certain demands by United Artists in regard to control of the UFA theatres, it is understood. Just what relation the Universal deal will have to the other UFA affiliations on the Continent is not known. UFA has had a working agreement in France with Louis Aubert, who operates an extensive chain of theatres and produces for the European market. In addition, UFA recently took over the Italian branch of the late Westi organization. The Universal-UFA deal recalls that of some time ago between Metro-Goldwyn and Gaumont in France, leading to the formation of Gaumont-Metro-Goldwyn and giving Metro-Goldwyn access to the Gaumont theatres in France. This did not call for the distribution of any French product in America, however, a fact which led to considerable dissatisfaction on the part of French producers. Last summer Carl Laemmle, president of Universal, laid the groundwork for the plan of associting the two companies in international accord. The plan called for the ten-year loan and the distribution of each other's productions by the two firms. It was furthermore agreed upon that the productions which UFA is to make should have the same advantages for inteimational distribution as Universal pictures have. That is, that they should have American stars and be made with American advisors in the production department. These stars will be sent to Germany from Universal City, though several American stars may he placed under contract specifically for these pictures. The great advantage that Universal derives from the association with UFA is the splendid releasing opportunity it will acquire in Germany. Through the German import laws it is impossible to release in Germany a foreign made picture unless the releasing company releases a German made picture. If a company releases thirty German made pictures it can release thirty foreign made pictures as well. In view of the fact that there are less than one hundred pictures made in Germany during a year's time it can readily be seen that the six hundred or more features made in America, the hundred or so made in England and the Italian, French and Scandinavian pictures all together stand a very small chance of adequate release in Germany. By the new arrangement, Universal will be able to release as many American-made pictures in Germany as UFA makes though they may not all be Universals. The arrangement which Laemmle proposed to the UFA was undecided when it became necessary for him to return to this country, and the negotiations were left in the hands of Max Schach, Laemmle's German representative. The remarkable UFA studios and some of its new theatres were described in a series of articles 'n Motion Picture News following the visit to Europe this summer of a staff member. The Neu Babelsberg studio, particularly, was described in great detail. Some of the productions then in the making, and which are likely to figure importantly in the Universal line-up, are: "Variety," with Emil Jannings and Lya de Putti: "Faust," under the direction of F. W. Murnau, in which Emil .Tannines, Gosta Ekman and, it is hoped, Mary Philbin, will play; "Tartuffe," from Moliere's immortal play, with Emil Jannings in the leading role and Lil Dagover, Germany's favorite, opposite: Fritz Lang's "Metropolis"; "The Waltz Dream,'' with Xenia Desni and Willy Fritsche: and an elaborate production of "Manon" with Lya de Putti. F. Wynne-Jones, American representative of UFA, this week received cables from Berlin confirming acceptance of Universal's offer.