Showmen's Trade Review (Jan-Mar 1947)

SHOWMEN'S TRADE REVIEW. January 11, 1947 9 NATIONAL NEWSREEL Confused Industry Ponders Court's Decree Exhibitors in the Main Not Satisfied; Big 5 Confer As Gov't Says It Will Appeal By BILL SPECHT News Editor A confused and argumentative motion picture industry which failed to agree on several important points in the federal statutory court decree issued Dec. 31 continued to ponder the question "What's next?" this week as lawyers conferred in New York and exhibitors both in New York and in the field tried to find a common ground of agreement on what the court meant in some of it selling clauses. Chief complaints to date beyond the usual arguments over the meanings of words which are apt to make the dictionary as important to the industry in the future as the lawyer is to it at present were : (1) That the cancellation clause of 20 per cent seemed to have little point unless there was some way of being assured that pictures would be offered in larger groups than five: (2) That there was no direct order in the decree compelling a distributor to tradeshow, nor was there a direct order preventing roadshows. (3) That the decree apparently did not prohibit the forcing of shorts in connection with the sale of a feature. (4) That the decree did not specify whether shorts were to be sold singly or in groups. However the disagreement over meanings at the moment is not insurmountable since the court retains jurisdiction for the express purpose, among others, of clarifying its decree and the defendants can call upon it for such clarification. The chief difficulty was that lack of immediate understanding seemed to be holding up plans for the future. The only known positive action noted was the report from Washington that the Department of Justice would "undoubtedly" appeal the decree to the United States Supreme Court. A department spokesman said that the Government "remains convinced" that divorcement remains the only solution. "There is nothing in the new decree." the Roadshow tor 'Duel' Vanguard this week was reliably reported to be proceeding with its plans to roadshow "Duel in the Sun," for which house records are now being claimed on its Los Angeles runs. Though there is a difference of opinion as to whether or not roadshows are permitted under the statutory court decree, actually nondefendants in the suit are said in legal circles not to be bound by its provisions insofar as punishment by contempt of court is concerned. Vanguard had originally appeared as a friend of the court to argue in behalf of roadshowing and at the time the government had indicated that insofar as "Duel" was concerned, it might not object to a stay so that roadshowing might be possible. In the Wake of the Decree: A spokesman for the Department of Justice said it would appeal. Attorneys for the Big 5 met daily and tried to reach a common ground of agreement on the meaning of the entire decree and to plan further action. Universal seemed almost certain to appeal to the Supreme Court if it fails to get a change in the statutory court of some findings, accompanied by a change in judgment, pertaining to Universal, particularly on franchise selling. Distributors on the whole appeared in no hurry to change sales policies. A Department of Justice spokesman said that non-defendants in the suit (such as PRC, Republic, Monogram) were not bound by the decree, but that if the nondefendants performed acts which the statutory court had declared illegal, they faced possible suits. Exhibitors for the most part were not in favor of the decree. The American Theatres Association said it awai+ed only the green light from its directors to fight once more for the right to inte/vene against competitive bidding. If ATA does go ahead, its fellow fighters, the Southern California Theatres Owners Association is expected to come in with them again. Department spokesman said, "which would in any way alter our position that divorcement affords the only real solution to the problem arising from the practices against which we have been fighting." He added that the Government might have been satisfied if a ban on cross-licensing had been included, but since it had not, the appeal to the Supreme Court was inevitable. Also from Washington the Department spokesman acknowledged that reports which said distributors and others who were not parties to the present suit were not bound by the decree were in a sense correct. The Department spokesman added, however, that if any of the non-defendants indulged in practices which the statutory court had found illegal, there was always a threat that a suit could be filed against them and they would engage in such practices at their risk. U' May Appeal At the same time sources indicated that Universal would appeal if necessary in an effort to get franchise selling legalized. Universal Attorney Thomas Cooke, while not discussing the possibility of an appeal, said that he might file a motion under rule to change the findings of the statutory court. One of the practical effects of such a move would be to delay enforcement of the decree until the judges had ruled upon the motion, though if the judges are of a mind that the decree they have written is final as far as they are concerned, they may rule speedily on such motions and nullify the possibility of any delay. Cooke said that his motion, if fled, would be on several points. "Our basis of contention," he declared, "is that we sold the market as we found it ; we didn't create the market." Claims Discrimination It is Universal's argument that it is being discriminated against when refused permission to franchise because it owns no theatres and that the right of the theatre-owning defendants to sell a picture in their own houses on whatever terms they wish amounts to a franchise. Further, Universal contends that the court does not differentiate between a franchise that may restrict trade and one such as Universal might make with an independent exhibitor. Universal General Sales Manager William Scully could not comment on the possibility of an appeal. As to sale policies, he said : "We're going along to try to sell our pictures as we have been doing since September. We've been selling one at a time, two at a time, three at a time when we have them available." No Hurry Similarly it did not appear that any of the other distributors would be in a hurry to adopt new selling tactics. MGM Vice-President William Rodgers, whose company has experimented with competitive bidding, said he had just returned from vacation and was not familiar enough with the decree to discuss policy at the moment. Indications were that exhibitors who want get their product problem straightened out, are not enthusiastic about the fact they may actually find themselves faced with a single selling or something close to it by several companies before competitive bidding goes into effect. What the Big 5— Loew's (MGM), Paramount, 20th Century-Fox, Warner Bros., RKO — planned to do about the decree, moreover, seemed undetermined this week. Their attorneys have met in the offices of the Motion Picture Association during the week and the decree has reportedly been dis(Continued on Page 10) Base for More Suits Attorney Thomas McConnell, who fought the industry-famous Chicago Jackson Park Theatre anti-trust suit, this week saw in the New York statutory court findings of fact and conclusions at law a substantial base for additional anti-trust suits on the part of independent exhibitors against distributors and circuits. "Under the Sherman and Clayton Acts" McConnell said, "a decree in favor of the government can be used by private litigants in establishing allegations of monopoly and conspiracy and they can thus avoid a long and involved proceeding such as the Jackson Park Theatre was forced to undertake."