Variety (Sep 1933)

Tuesdayt September 26, 1933 PICT E S vaUiett WALL ST. GEITIN' HOT ON PK A. T. & X After Loew F^e $18,000,00 Could Swmglt; Fox'-Par Merger Mulkd but Nixed American Tejephona & Telesfraph Co, liiay iripye into .the commanding control of: . sho'v\r biz. That's, the feeling" dowfitown as 660,000 shares of libefw stock, which may soon ^e up for sale, .lopka to be Ultimately acquired in toto by A. T. & T., thus replacing Film Securities cbntrol. Involved in the scheme, sO far as downtown observers dan makq out, i's.,a deslre on the. part of A. T. & T. to ,see. Paramount anS Pox merged. That A. T. & T. thing, ■wh lie spoken of direct)y by ofclserV-: era, very likely looks to be mor^ nearly t^ie indirect hand: le.c- trical Rekearbh Products. The merger thing, howeyer, doesn't look to, be altogether feas- ible. Thl$ angle is garnered from indications thit powerful bankers, ■close to Par do not look with favor , on such d. mergpr. The A. T. & T.V connection on tlie merger thing looks to be a John E, Otterson angle. Electrical Research Products, Inc., of which Otterson la president, is the holder of the largest amount of Film, securities notes. Film Securities holds the C5M00 s.hares of Lioew stock. . Ad- ditionally ERPI is among the larg-r est individual crfedltprs of- Par for something like $J»306,0OO and there- fore entitled to a voice in Par re- orgJinization plans. '■ ^'ox Move Blocked The LiOew control angle looks all the more definite for A. -T. & T takeover by the fact that the Tele- phone company, according to a.c- counts, is the one that blocked the i-enewa^l of the $20,000,000 Film Se- curities notes, as asked by, Fox Film. Fox asked for such renewal t-> protect the ipox company inter est in the Fllin securities, common stock, amounting on paper to around $45,000,000. It was Sid Kent who made the request for Fox Film, pointing out that interest on the notes had. been paid and that Fox was entitled to consideration on that score. The Telephone company, however; via the . ERPt holdings in Film Secur itJes, however, negatived.'the ob- jective. It's, a jpecullar angle on the whole thing, this A. T. & T. turndown •That's because Kent is regarded as pretty close to the Telephone peo pie, who regard him highly as ah executive knd apparently are for him. Probably just one of those things with the Telephone company through ERPI figuring its o\vh po^ sitlon Is stronger the other way. The Film Securities notes are In default, which is how come the pos siblllty of a takeover-by JV.uT^&_ T of the original amount of $20,000, Obo. Around $18,000,000 is still put standing. The 660,000 shares of Loew stock were the original sh"^'"^s quired by Wiinim Fox, and sold later by Harley Clarke to FSC; Film. Securities .acquired the. shares for 29,000,000, of which i>9,000,000 was in cash and $20,000, 000 in notes. . These notes are held by Chase, Hayden Stbne, Erpl and what wag Bancamerlca Blair. ChAse has around $3/p6'6,00p of the issue, and the old Bancamerica Blair out- fit around $i;0b0,000; .. Fox Film additionally got .all the ouLstandlng 'A' common stock Of ••FSC, roughly appraised at that time as worth a nominal $45,000,000. Only Needs. $18,060,000 Around $.2,000,000 of the notes have been taken up, which would mean that at a sale anybody with $1R,000,000 could acqu4re control, of ==«thc--=IiOGW'^shnress-^-he-shaTes=i=^ .«jont working Control ol; Lpcw's and roughly amount to around 48% of the Jjoew stock out.stahding. The FSC stock at present marUet quo- tations-would be valued somewhere at around .$25,000,000. It i.s figured that only A. T. & T. is hiv; enough to commind so much money at one time and unle.s.s. .somohncly with enough ca.sh to over- laid A. T. &. T., the stock may go WB CAUTIOUS 4ot Qbfng: Oyerboard on Musicals Many No telling how lottg musicals wlil last, Warners is scheduling' one at time. Idea is that if producers are suddenly .'caught With mu- sicals, WB will be caught only to the extent of one. With 'Fbbtllght Parade,' Its third since revival of musicals ready for early showing, WB is readying an- other, 'Btoadway and Back.* Al- though a liiuslcal, this one will em- ploy Warners, players such as Kay Francis and G6orge Birerit. Ruby keeler and Gehevlcive Tobln will also bb in. the tuneifllm. B. S. MOSS, INDIE FILM PRODS; Hollywood, Sept. 25. B. S. Moss Is due heiMS-thtET^feek on an independent picture produc Inef venture with Frank yihcent of the Edrington-Vincent agency.' D. W. Griffith and Ernest Hem Ingway are also mentioned as being Involved, as director and author,.re ' spectively, .of the first picture. .-Vin' cent is-reposed to be making over tures to Paramount and Radio for a loan of Fredric March and Ann Harding. Moss and Vincent's connectlonis date back to the. old B, F. Keith vaudeville circuit days. Moss' easteirn circuit of theatres wais booked out of the Keith office. He retired a 6ouple of years ago when selling out to RKO, but has made seveiral attempts .to return In small way. Moss left New York Sunday (24) accompanied by Danny Simmons^ Latter was .called back by Moss from Paris, where" he had been liv- ing in retirenient. T mil's Financial Mentors Down- town and Up Becoining Vitally Interested in A m u s e m e n t s Again-^ Mulling Mergers Once More New Set-Up*— Recently U p p i n g JFUm Grosses Seen Behind It PROSPEROUS OMEN ilmistic plans are bobbing again Wall Street. The next 90 days may . see the begi ing of an almost wholesale 'financial end of the pic- ture bi informal discuseion and formal meetings are on all along the line downtovwn. These aire destined to affect all companies in the near majors, rerniBiinti unmehtioned so far. Companies in the' upswing of downtown discui^sion include among Others General Thfeatres Equipment, Fox, Paramount, Loew's; United Artists, RKO and Universal. Control of possibly three of these companies may shift during the next, three months or so.. The flnan cial -say-so of others may also change, or become affected. Compiinlea mentioned to shift ffnancial control, ias present discus slons . indicate, include Paramount, Universal and Lioew's. ' Among the things going on or dls cussed are: Possible merger between Par ahd Fox.. Reorganization of General The dtres Equipment. Reorganization of the ffnancial structure of RKO, maybe with new bankers. Probably in this Way (Continued on. piage 46) Par$ Reo4 Han with Several Probabifities; How Kohn, Figure; Balaban Indef re- He Chicago, Sept. ..J. Balabjin and family turned to Chicago last week, has decided to do nothing what- ever until January at. l^ast. . This kills repiort that he would return tP. B&K iri>mediately or go to the coast', for the William Morris agency. Balaban will take hlniself and family to Boston, where hie will set up a home for the time;being, with the children going to. school thifre. He Will, spend the first three days of each week. in New "Tork. MANNIE COHEN EAST FOR PROD. POWWOWS EmanUel Cohen, who flew in from the Coast Sunday (;24), will remain In New York for about a month coiitacting all departments aligned with production. He will discuss mid-season pro- ductlpn plans, go over budgets with the distribution departmentj confer with Russell Hoiman on story mat ters and With publlclt'y-advertlslng and other divisions. On Friday (22) A. M. Botsford left New York for the Par studlp to assume charge While Coheu Is In "the east; ' Franic Pope^ -on Emanuel Cohen's executive - prdthlctlon staff, at the Par Hollywood 'studio, arrived in New York Saturday (23) for a brief visit. He came on to make various con- tacts essential to his recently ac-.. quired duties at the studio. f PLAN SEMIOFFiaAL PATRIOTIC SHORTS cooperation of the government Is said to .have been obtained for the production of a serial , picture, made up of a short each around President Roosevelt and each depiartment headed by a cabinet member. First episode will be In four reels and deal With outstanding presi- dential leaders since Washington, it wllMiave Roosevelt as the 'star,' while others"will" star ,t^^ cabinet members heading Treasury, Army, Navy and other posts. Serial as a whole will be known as 'The Spirit of . '33' and largely confine itself to .historical ^rather than political interest by tracing heads of. various cabinet depart- ments down to the present, for the $18,000,000 less to A. T. & T. The telephone company through Erpl already holding around ^8,000,- 000 of the. notes would thus-reiquire: only $10,000(000 additional to gain, this control. William Fox origi id ai'ound $75,000,000 for; same stock, buying it at an average price oE around $il-2,50. It's all pretty strange to down- town ob.scrvers who, while figuring this A. T, & T. contrpl thing as dcsUnod for the t*ocw stock, ney-: -er-th.ele.<;s-^hoid^euri6us-=--thoughts about one believing the telephohe company prefcrrrd to stay out of the 'film biz. The only answer .sec lingly would ho that the telephone company cither han plans whidli the observ- ers, know nothing about, that go further thnn more, control of I!-oe\y's, or that the recent upswing in trade Impelled tlic telephone company to .<3tay in the picture biz. St Of the Year Seen With New Set-ttp Financial reorganization of RKO and the ending of the company re- ceivership is in the ofling. That de- termination of M. H. Aylesworth to clean up the reconstruction of the company by the first t)f the year looks feasible by then. May. be sooner. it is. probable that with the re- prganlzatlon now being maneuvered certain new .financial backing may enter-the-RKO.-picture. Unofflclal- accoiints would Kav6 negotiations Oh doWntown already this Way. The. position which Stadium Theatres, new' R:k6 Bubsild, will play in the future reorganization plan looks to bo open. Thtere . is. some talk that this dowritbwn tsnd may. have a Rocke- feller afllllation, but that's mostly conjecture. Also,^ .accounts Would have It that maybe OW^n D. Young and a group linked closely and per- sonally to the chairnian of. Ithe Board of General Electric may fig- ure promlnehtiy In the. new financ- ing plian. iiice Aylesworth took charge of, tl^e ilKb works by Inyitation JVnd without, pay, overhead economies have been, achieved all the way through the firm and. Its sub.sids. Huns into millions annually. Wait^iig for-Aylesworth Thef; new financing kngie ill p robably ! pop. ,as ■So6n,.a.s_t his _in3i4 .e reorganization Will have been com- pleted to Aylesworth's aati.sfaction. On the theatre end the company .s.till has properties to be washed up or reconstructed. Exactly what the pOijition of the Orpheum biranch of the company w^ill be from a financial point. Is still to be announced. RKO looks to retain many of the -Orph {jpot,<? urffler its own banner and operation,. Probable that In the new financing scheme the Orph bondholders and stockholders may be given an exchange, of stock a^ has been offered previously, but maybe on a new . basis. So far as the.RKO. stock goes, this Is mostly divided between RCA and the Rockefeller people. That's outside of Mike Meehan's. Interest In Keith. TEST SUITS BY PUBUX TO DISCLAIM RENTALS .Publix Enterprises trui»tee,. Irying Trust Is anxiously awaiting the result of its first test case on landlord claims, many of which PE wishes to disclaim, esi^ daily vVhere future rents, are en tercd a.$ provable. -I'pr the purposes of testing thifc revised bankruptcy lo;ws i connePtipri with leases oh 'property, whether guaranteed or not, Publix Enterprises has the lease.s of .a thea,tre each in Kansas City, Kan., Joplin and Springfield, Mp.i under attack. PK .seek.s to di.squaiify a claim of around $200,000 On the ground re- cluction.s in rental were made with- out consent of the guarantor and the t.h.pa.trAS:„rj'i)r)ss-e-s..s.ed „._b y-Lj,th& Paramount's reorganizatiori talk hUs taken a turn during the past Week with the .possibility of Ral^h Ing the reorganized company as ipresldent With Adolph.Zukor, chair- nian of the board. The other . p.6s;« slbllity talked about Is tor Zukpr to. remain as president With Kohn being. In charge of .the business end of ^ Par's coast activities.- There is also the possibility pres- ently looming that creditoifs oif ap- proved claims against Pair may .re-; ceive lOO-cents on the dollar. "That's a hope. Stockholders in the reor- ganization scheijie will share prob- ably on the basis of i to 8 of their present holdings. The banks interested. In the $13,- 500,000 iiiegatlye loan may receive:' a 50% preferred stock positiori foir their claims and the balance In cash as represented .by notes of a new IssUe whtpti will be floated for the reorganized. Company. That's by way of compromising the banks* clalnis and avoiding expensive llti- -- gatlon for both. Wha.t. S. A, Lynch's position may be in the. reorgahiziatloh is open .and apparently up tp him. Downtown End O.K.' He Is a creditor of. Par's to the extent of $600,000. Lynch's. capable handling of Par's theatre sltuatlprt In the financial maelstrpna has rec- ommended' him to the bankers and inter'isted pdrtles. Involved. Para- mount presently is unanimous in voting him credit, so far as obser- vation goes, and that includes the downtown, end,- The question Of what future po- sition the three Par trustees may have In the reorgarilzed plan. ta open, but it's certain that two, if not all. three will .figure largely in the future of the company. The bankers want them,- besides certain Credltorsr. Ralph Kohn Is presently head of the theatre operating end at Par. He was formerly the treasurer of the company. The exchange of stock Is about similar to' the Fox reorganization plan.which,was 1 for 6.. So far as the banks' claims agtilnst. Par on the 26 negatives, or the first half of the year's product output, it's still a matter of negotta- tlpn, but the negatives involved are stated already to be on the releasing schedule. Actually can't be. given. It's nioStly conjec- ture and dependent on conditions and according to how the claims are approved. During, the'last feW days,.before the d.eadllne on Sept. .14, many: millions of additional claims were filed, all Of which have to-be gone over. Sa:tlsfactlon of the clalihs and to what extent depends on hat kind of co-operatlort the landlords pf Par properties hand the company. Much of the landlorjjl sJtufC. Is istill. in negotiaitipn. Ics.sor corporaitlons. Tho.se corpora- tions la.st Wedne.sVlay (20) through coun.scl filed briefs in its fight tp uphold l<*aHe "^cluim.s and Irving Trust already has entered, it.s re- ply, which deal,s largely with the trustee's interpretation of thK bankruptcy laws on leafries, ' I'he paper.*? are now boro/-o R^ferfrn Hf^nry K. Davis r.)i' hl.s 'If- ci.slon, DE MILLE'ACE'PIC IN 75G PLAGIARISM SUIT r.,os Ang61f».s, Sopt Like -several of lils procodi'nK pic- ture.s ../-'oclUlj._l).(.'Mill.*r'H.. latc.st -1,-^ ture.^'J'hirt .nay and Am:p,' Has IjC-en made the tar/^ft or a pl''Vt^i''T'f^'n .suit. Jam<^H o'Uanlon ha.s lilod a complaint in .Siiperior Court de- mrtrulihg $75,000 flamngo.s, charging Dial I'aramount Productions appro* pri'itf'd thf» writcr'.s oris^lnal storjr» MtoutTlv on IC'il.s,' and imyji-porfited ii. in 'J>ay and Age;' f)'II uiIdii as.sorls he .submitted % ir yn-n in I'J'.ii.