Showmen's Trade Review (Jan-Mar 1947)

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10 SHOWMEN'S TRADE REVIEW, January 11, 1947 NATIONAL NEWSREEL Industry Disagreement ©wer Decree Shaping Universal May attack Ban On Franchises; RTA Waits OK for Intervention Fight (Continued from Page 9) cussed and rediscussed, apparently with the result that more diverse opinions have been brought out than had existed before the meetings. An observer was quoted as saying that he knew less about the decree after attending a session than he thought he had known before attending it. The Big 5 position would seem to be difficult one. For while they could gain some advantages on an appeal, they also stand the possibility that the Government might win on theatre divorcement, and their theatres are a very important consideration in any action they take. Time Factor Apparently their greatest weapon at the moment is time — time which will give them an opportunity to think, to experiment and which may change viewpoints of others as well as themselves. Two of the Little 3 — Columbia and United Artists — have not indicated what they will do up to now. Columbia is known "to be considering an appeal while officials of United Artists, which was apparently denied its request to sell westerns in series without tradeshows as well as a request to roadshow, could not be reached for comment. But if the distributors are not decided upon what action they will take, the exhibitor opinion to date is almost unanimously clear on one point — it does not want competitive bidding, ft is less solid perhaps, but astonishingly in accord with a desire to see the Government appeal. The decree has been treated by them to everything from analytical criticism to vigorous attacks. ATA Waits OK The American Theatres Association still has to get the approval of its Board of Directors before it attempts to continue intervention by appealing the decision of the statutory court which denied it the right to intervene. However, President Si H. Fabian, who denounced the decree for directing "competitive bidding with all of the viciousness and chaos we all know it to entail," said that he believed from his discussion with board members that "they Diapers to Degrees Wisconsin is not only using sound 16-mm. pictures to teach children. It's using them to teach teachers as well, a report from Milwaukee revealed this week. The University of Wisconsin's School of Education is running a series of films to teach teachers the development of the child from the three-cornered pants era to the last year of high school. Teaching methods to accompany the various ages of these future men and women are also shown on the screen. Prof. A. S. Barr of the University faculty is conducting the course. Slight Stock Reaction Motion picture stocks moved slightly downward this week, in opposition to trend of the market which was slightly upward. Wall Street sources attribute this reaction to the court decision handed down Dec. 31. Should the Supreme Court uphold the decision, these sources feel, the results will be a considerable increase in the building of new theatres. will empower me to fight this decision in the Supreme Court." If ATA fights to intervene, the Southern California Theatre Owners Association, which was a party in the move to intervene with ATA, will also follow suit. Fabian's prepared statement follows in part : "I feel that this decree fully justifies the American Theatres Association's action in seeking to intervene in this case. By this action rather than seeking an appearance as amius curiae, we have protected our right of appeal and in my judgment at no time in the history of our industry has it been in such grave danger as it now finds itself as a result of this decree. The ATA counsel are working now on appeal plans and subject to approval by our Board of Directors our papers will be filed at an early date. 'Viciousness and Chaos' "This decree directs competitive bidding with all of the viciousness and chaos we all know it to entail. The sound theatre operator stands today facing an era that will make the earlier price wars pall by comparison. He faces competition from irresponsible operators and wildcat speculators who will bid film prices to bankruptcy levels. He faces competition from those with bigger bankrolls who have no immediate concern with profit or loss. He faces competition from amateurs attracted to the industry in the false belief that product is assured. He faces competition from affiliates who being assured of one product, their own, without competition, are placed in a superior bidding position for the best of the remaining product. "Competitive bidding enables and almost directs distribution to adopt practices that will intensify rather than eliminate monopoly and will inevitably lead to further arid multiplied legal proceedings down into the future. "ATA's Board has not taken formal action, but I have consulted enough of them to know that beyond all doubt they will empower me to fight this decision in the Supreme Court. "I make this statement because I want ATA members and the many thousands of non-member exhibitors who voted overwhelmingly in favor of ATA's intervention action to know that the fight is not over." John J. Jackson, Jr., attorney for the exhibitor-members of the Confederacy of Southern Associations, said that a decision to appeal on intervention would be reached after his client's board met. Levy's Analysis Herman M. Levy, general counsel for the Motion Picture Theatre Owners of America, making it plain that he spoke as an individual and not for his association, declared : "While the decree still leaves much to be desired by independent exhibitors, it is better than that which might have been expected from the opinion rendered by the court in June. "This much is important : the decree has eliminated the language of the June opinion which was susceptible to the interpretation of premitting 'auction-block selling,' that is, going from theatre to theatre to get the highest bid." Other points in Levy's analysis were : 20% Is Fruitless Cancellation ; "This 20 per cent cancellation privilege is a friutless victory unless distributors decide to license five or more pictures at a time. There is certainly nothing in the wind today to to indicate that there will be a swing away from the present .trend of releasing and licensing one feature at a time. Also, where competitive bidding applies, the necessity of making certain that the highest bid has been received from the same exhibitor on each of five or more features in a group represents mechanical difficulties to distributors as to be the most discouraging and impractical, if not impossible, accomplishment." Selling — "The defendants may show their own pictures in their own theatres on any terms they wish. As to all theatres except their own, however, . . . (they) must offer to all exhibitors in the same competitive area their terms for each run requested by the exhibitors, except of course, the run chosen by the distributors for their own houses. This means in effect that any exhibitor in a designated competitive area has the privilege of requesting the terms for any run he wishes, whether he has heretofore had that run or not. Conceivably an exhibitor with a fifth-run neighborhood house may bid for second-run or even first-run if the particular distributor has no theatre in that town, or for some reason does not choose to show the picture in its own house. The license in this instance, as in all others, shall be granted solely on merit and 'without discrimination in favor of affiliates, old customers or others.' This provision is actually one of guaranty of some run and is most important to all exhibitors. It means that the exhibitor may name his run and the distributor must offer to him the same terms for that run that the distributor is offering to any other exhibitor in that same competitive area for that particular run. Up to Seller "The distributor may reject all bids, but if he accepts any bid for any particular run it must grant the license to the 'highest responsible bidder . . . having a theatre of size, location and equipment adequate to yield a reasonable return' to the distributor. "The language quoted, ... is, in my opinion, impractical and almost impossible of fulfillment. (Continued on Page 13) REPRINTS Reprints of the Decree as published in this issue are available for Subscribers who may need an additional copy. Supply is limited, requests will be filled in the order of receipt.