Variety (Dec 1938)

VARJETT PIGTUIIES Wcdneadajt December 7, 1938 FIRST DRAFT OF TRADE PRACTICE PROGRAM HANDED 10 EXHIB ORGS. These Theatre Owner Ass'ns to Act on It, Revise, Amend, Etc.—Divorcement, Theatre Expansion, and Block-Booking Completely Sidestepped Conspicuous because of the ab- sence «f consideration in any man- ner of (1) divorcement of theatres from production-distribution; (2) restriction of theatre expansion by majors; and (3) elimination of block booking or blind selling; the first draft of a trade practice program is now in the hands of 10 representa- tive exhibitor organizations subject to approval or disapproval, In whole nart. or to further negotiation *^ A total of 16 presented for Metro's No-CI«arance Experiment With New 'Hardy' Pic; Quick Coin Metro is trying a unique experi- ment with 'Out West with the Hardys' to determine just how short a time it can rake in top money from a speedy distribution of the film, instead of employing the cus- tomary system of protection periods between first-run and subsequent playdates In the Greater N. Y. area where first and second run protec- tion is mostly Loew's. Latest 'Hardy opens tomorrow (8) at the Capitol, New York, for two- week run, and immediately follow- ing, on- Dec. 23, the start of the Xmas holiday w«ek, film is being booked day-and-date into all of the Loew 'A* houses in Greater New York without the usual clearance after the Capitol. Immediately after that, without another Trday clearance, picture will be played in the entire Loew Cir- cuit! Again discarding the week's protection after the Loew houses, all indepedent theatres in this territory will get the picture around the first week in January. Picture would normally come to subsequent runs in February, if the usual protection regulations were enforced. LOMBARD'S lOOG AND % FOR ONE RKO PICT or on disputed features diftexent points are consideration. The question now is whether some or all of the 10 exhibitor bodies will approve, and how many will ap- prove of this or that point; what bodies may disatiprbve and in what respeefe; which additional features of a self-regulation plan not em- braced in the present draft may be insisted upon before final approval, etc. Should all 10 exhibitor bodies getting the fir^t draft approvie of it in toto, the question then arises whether other organizations of thea- tre own6rp or individual exhlbs affiliated with no national or state gEOup, will be forced to abide by the will of the majority represented. Presumption is that the will of the majwrity will force the new machin- ery to be okayed, if ultimately, on any exisiting minority through a new form of contract to be enforced in line with self-regulation. In forwarding the initial draft of a trade practice plan and concessions therein to the 10 exhib organizations which negotiated with the distribu- tor committee, the latter informed that copies of the draft had been Bent to President Roosevelt and the Department of Justice. See No Quick Action It is regarded as unlikely that re- plies from the exhib bodies to the first draft will be received at an early date, since each group will I ditional percentage if it hits over want to study the plan carefully and ^$1,500,000. at' length as well as submit findings Picture is due to start next spring, to its iull membership. The Motion] with John Cromwell likely to direct, Picture "Theatre Owners of America, with Ed L. Kuykendall due in to- day (W«d.), will huddle on the mat- ter tomorrow and Friday (9) in a preliminary way. Allied States Assn. probably will not reach any decisidn until January, when it holds its annual convention, it is indicated, while other indie groups may act faster, one way or another. Harry Brandt, president of the In- dependent Theatre Owners of N. Y. is returning from "Washingtpn today (Wed.) to consider sche4uling a meeting of his committee td -analyze and discuss the trade practices draft. The other indie 'groups to which the draft was sent' are Independent Theatre Owners of Southern Califor- nia; West Virginia Managers Assn. Motion Picti^e Theatre Owners of Kentucky, Theatre Owners & Man- agers of the Rocky Mountain Region, Allied Theatre Owners of Iowa, Al- lied Theatres of Oregon and Motion Shauer Producing Moreno Series for Latin Trade Holly woodi Dec. fl. Victoria Films, "'inc., new Spanish language producing outfit headed by Mel Shauer, is making' a series of filnvs for South American trade, Rosita Moreno (Mrs. Shauer), Ar- gentine actress, is the star. First venture, *I Believ* in You,* rolled at Grand National studio but was delayed by Illness of the ^tar. New company is dickering with Paramount for release. Shauer left Paramount last week after 15 years in distribution, exhi- bition and production. His last Par production was 'Thanks For the Memory.' Before he became a producer he was head of the talent department and brought in several promising players. Estimate 7SG Final Quarter Profit for U Hollywood, Dec. 6. Carole Lombard signed to star in 'Memory ^of Love* at RKO on a sal- ary and percentage scale. Deal calls for $100,000 plus $50,000 after the gross reaches $1,300,000, plus an ad- Cowdin Back From Coast J. Cheever Cowdin, chairman of the board of Universal, arrives in New York tomorrow (Thursday) after spending a week on the Coast. Cowdin conferred with Nate Blum- berg, president of Universal; Cliff Work< studio production head; Matty Fox, assistant to Blumberg, and other production executives on bal- ance of pictures being produced for the '38-39 season. Although the company is operat- ing in the black at the present time and should show a neat profit in the fitst quarter of the new fiscal year, a profitable final quarter in the 1938 fiscal year for Universal will not be sufficiently large to wipe out the losses of the previoxis three quarters. That is the latest Indication in Wall Street this week with an estimate of $50,000 to $75,000 profit in the final three-month period ending the fiscal year, Oct 29, anticipated. Adjust- ments for the final quarter and whole year may even cut down this amount. Universal's loss going into the final quarter for- the recently completed fiscal year was aroimd $800,000 Hence, the street is looking for a net loss of about $700,000 for 1938 which is approximately $500,000 better showing'than in the preceding fiscal year. Not only does this make the cur< rent situation of U look better but puts it in shape to continue produc tion without additional loans. Pjicture Thieatre Owners of Virginia. Rodgers' Statement Before leaving for Chicago Friday (2), when the initial self-regulation draft was put in the mails, W. F. Rodgers, spokesman for the distribu- tors, sent out a statement indicating that supplemental methods may be devised to handle problems that are of a local character. He said, in part: *To cover all subjects considered as national in their scope, it has been necessary to synchronize the I thoughts expressed by the different theatre groups and the draft form of | memorandum represents Onljf such subjects, it being the belief that an-' other and subsequent method will apply to those topics that are purely local in their application.' The com- mittee, in keeping with reluctance to [ inform the whole trade as to what was transpiring, refused to divulge the trade practices draft sent out. It has also pursued a policy of trying | to restrict exhibitor bodies themsel- ves .firoin releasing anything without | its (the distributor committee's) knowledge. Rodgers was due back from Chica- go yesterday (Tues.). ABE MEYEB JOINS MCA Hollywood, Dec. 6. Verne Thrasher bought Abe Mey- er's stock shot library, consisting ol! 3,000,000 feet of sound and action film. Meyer is joining Music Corp. of America, to take charge of conduc- tors,' composers and musicians. Single BSis WiU Xnre U. S. Dk, Says Briton Hollywood. Dec. 'U. . What America needs is single bills with occasional vaudeville, take it from Alfred S. Kahn, of Charter Film Productions, Ltd,, London,' here gandering American picture meth- ods. In London alone, Kahn declared, there are 30 big time vaudeville houses. In certain parts of the U. S., he added, there Is a demand for one-feature-plus-fiesh shows. Fbt Year of New U. S. Surtax Law Was No Relief to Picture Cos. Slow Machinery ot the Law Next procedure In the Government's dvU anti-trust suit will be arguments on bill of particulars^. Major companies, In asking for bill of particulars, simply want to know, "Well, what did we do that was a violation; in what particular situation; and ln» what manner?' Then It will be up to the court to decide whether the Government must supply particulars to the defendant corporations. In this action, 'all testimony mUst be taken In court Mrhich means that there doubtlessly will be delay'In getting, certain witnesses from various parts of the nation. After this, long list of briefs from each defendant must be filed. Then the judge will take several months to arrive at a decision after studyifig the testimony and briefs. Then, it there is nq consent decree, doubttessly tile losing side will ' appeal the. decision. The action then goes direct to the. Ui S. Supreme Court. It will require consideraUe time to draw up paperis if appealed. Then the ce^se is finally set down on the highest court's calendar. After argu- ments on set date, the court talws the matter \mder consideration and when it reaches a decision, final result 4>f giant suit will be known. Points of Trade Reform Draft 1. Cancellation privileges, with certain restrictions, shall be 20% where rental averages Up to $100; 15% from 911 average of $100 to $250, and 10% for rentals average over $250. Notice of cancellation 10 days after mail- ing of availability is required, with any dispute over this or other features to be arbitrated. Average rentals shall be determineil by the fees paid for the distributor's pictxures the prior season in th6 same runs but shall not include westerns when made In a series or groups; reissues or foreign- mades, these to be-judged as separate groups. A hypothetical buy where four brackets of terms figure Indicates that on a licensing of, say, 48 fea- tures, the exhibitor, if cancelling out five pictures, may take two out of the next to lowest bracket, but be restricted to one each from the highest, next to highest and' lowest or fourth bracket. It is also agreed exhibs may exclude a picture on moral, religious or facial grounds that are locally offensive oh 14 days' notice, but that in -event of any dispute on this right, it must be arbitrated. 2. Each distrih agrees to make as complete an announcement of pictures in work or intended for release during the season as possible, though sub- ject to hazards and uncertainties of the business which may prevent com- pletion. 3. Distrib may agree to a lesser number of pictures than pffered due to Inability of an exhibitor's policy to play the entire number offered, though reserving right to offer its complete output to a competitor. 4. Preferred playing time shall not be designated when film is sold flat or on a percentage when a' guarantee is included, but when on straight percentage, designation shall be by mutual agreement. 5. Theatres shall be able to obtain some run of a distrib's product pro- vided theatre is not obsolete, exhib is reputable, etc., with arbitration as final determiner in event of dispute. Distribs maintain right to select own customer but agree not to license away from an existing account for the sole reason this account buys the product in other situations; any dispute there, also, to be settled by arbitration. 6. No exhib shall be required to buy shorts, newsreels or trailers as con- dition Of getting features. 7. Score charges, if any, on the current (1938-39) product shall be con- solidated with film rental when on a flat sale "but starting with the 1939-40 season there shall be no score charge on percentage pictures. 8. Distribs will notify 'exhibs of price classification of each picture on rendering ^otice of availability, except for first runs in the keys. 9. Features shall not' be sold to non-theatrical accounts if arbitration determines they constitute imfair competition to a regularly operated the- atre. Army posts, Government camps and U. S. Navy are excepted. 10. Each distrib will use its best efforts to simplify its form of licensing agreement. 11. On selective deals, exhibs must exercise such right within 21 days after notice of' availability is mailed out 12. Distrib will not prohibit'exhib delivery of a picture If a prior pic- ture on release has not been delivered through letter's failure under agree- ments where accounts are obligated to play product in order of its release. 13. No distrib shall coerce an exhib into a contract on threat to build or otherwise acquire a; theatre lor operation in competition to him, but nothing otherwise shall Interfere with the right of a producer or dis- tributor to build or acquire theatres in any location.' 14. Practice of false boxoffice receipts is condemned and exhibitors agre* to try to discourage and eliminate such practice. 15. Principles and factors involved in matters to be determined by arbi- tration and machinery to carry this out to include clearance and zoning, plus other subjects, is open to further discussion. 16. These provisions to become effective with the 1939-40 product, except where affecting any license agreements now In effect. First year of altered Federal sur- tax on undistributed profits brought no relief to a majority of motion picture companies. It is the same strict surtax as far as the industry as a whole is concerned, because ap- plicable only to businesses showing $25,000 or less profit for a full 12 months. Thus, the surtax on undis->- tributed profits continues as an addi- tional tax burden on those film com- panies unwilling to deplete their ca^a reserves in order to duck this h&<vy taxation by paying out the Cu I profits in dividends. Tew picture companies today are wlMing to jeopardize their cash posi- tion by paying out all earned profits just so they won't have to pay this surtax. They need the coin to carry on production, with the amount tied up in film negative always a large total in the business. Consequently, the real payoff is that coin ordinarily in long-term op- erations would go to stockholders is cut into by the Federal surtax, adopted by the present administra tion a couple of years ago; While the claimed purpose of the tax was to force big corporations to push all profits in the form of dividends, so that .more money would be kept in circulation, film company officials claim that it prevents storing up any reserve tot actufd operations or rainy days. NiCK CARm TO TRACK 'EM DOWN FOR METRO Hollywood, Dec. 6. Metro has obtained screen rights to the Nick Carter detective yarns In a deal with Street & Smith, pub- lishers. First of six 'Nick' stories to be produced on the Metro lot has al- ready been adapted for the screen by Martin Mooney under the title, 'Crime Wave.' Player Boom at WB Hollywood, Dec. 6. Warners la setting a December production record for the number of players to be used over a four- week period. Daily average will run to 62 stars and featured players and 330 bits and extras. Ten pictures are in work. Major Warner Better In bed at his Westchester home for a week with a bad cold and sinus trouble. Major Albert Warner is reported Improving and in 10 days or so may go to Florida. He had planned spending the holi- days in Miami anyway. MAY REAUZE $150,000 FOR REFUGEES IN S. W. Dallas, Dec. 6. The southwest drive for funds to aid German refugees expects to raise $150,000 through donation of tomor- row's (Wed.) receipts in all the In- terstate and Texas Consolidated cir- cuit theatres. Most of the major film distributors, whose films are booked over the cir- cuit today, have contributed their picture rentals free, with the excep- tion of Metro and 20th-Fox. Paramount Pep Club, Par home of- fice organizaiion, has a drive of its own for European refugees, on non- sectarian lines, proceeds to be split among refugees of all faiths. Boland's Film Bids Philadelphia, Dec. 6. Clay B61and, who with Bick Reich- ner wrote the past three University of Pennsylvania Mask and Wig scores, left for Hollywood last night (Monday). He was accompanied by George Simon, head of Lincoln Pub- lishing Co., which published the Wig music. While on the Coast will talk to 20th Century-Fox and RKO on studio songwritlng offers.