Variety (Apr 1939)

Wednesday April 12, 1939 PICTURES VARIETY J WB Needn't Borrow More Than UMM to Swing Conversion Move by Warner Bros, in obtain- ing permission to list $25,534,000 worth of new 6% debentures due in 1B48, granted by the Securities and Exchange Cominlsslon last week, in- dicates to Wall Street financial ob- servers that the picture company does not expect to borrow more than $4,000,000. from banks to handle the conversion. Warner Bros, has offered holders of iS% liens, due next September, new e% bonds due In nine years. Thus far about $20,000,000 worth of the old bonds have been deposited leaving only approximately $9,000,- 000 worth of Uens yet to be swapped for the new Issue. Warner Bros, has less than $2,700,000 of old bonds yet to be converted into certificates for the new bonds before the plan cnn be declared operative. The loan approval already secured by Warner Bros, would allow bor- rowings by the film company up to $6,000,000. The action by the com- pany in seeking listing for more than $25,000,000 worth of new bonds in- dicates that' Warners will be- less than $4,000,000 shy of total $29,000,- 000 worth to be converted. The Street expects Wameo* will pick up several million dollars worth of the present 6% bonds in the open market between- now and next September.' Differential be- tween the present liens and certifi- cates for the new bonds might help In making this operation unusually successful. Such open market 6p- ' eratlon Is the logical way to take care of the old liens still not deposited for the new issue and will cut down the size of the required bank loan. . Besides application for the deben- ture listing, Warner Bros, also asked that cancellation be made of pre- vious authorization to list 84,174 common shares, required for conver- sion of old 6% convertible debeu' tures. U'S 52 FOR 193940; 40 FEATURES, 12 WESTERNS Universal will program 40 fea- tures and 12 westerns for a total of 62 full-lengths for the 1930-40 eeS' ■on, as against 48 promised this year <'3S-39), Increase being in the horse opera group. Company will also offer three serials. U is holding its sales convention in Cincinnati Friday (14), with WU- liam Scully, geiL 'sales mgr. pre- siding. In addition to home office and administration executives; divl slon, district and branch managers, U is inviting its salesmen to the convensh. Selznick, Par Casters Cast Themselves Out Hollywood, April 11. Charles Richards, casting director of Selznlck-Intemational Pictures, has resigned with that studio. Richards' departure will become ef- fective as soon as Dave Selznick has chosen a successor. 'Fred Schuessler resigned as unit casting director at Paramount after three years on the lot At one time. Schuessler was cast- ing director for the studio, having succeeded Fred Datig when the lal ter moved to Metro. Rep. Pic Into Showcase ^ Republic has closed a deal for its 'Man of Conquest' first run in New York at the Capitol. This wiU be the first Rep. picture to play here, and first for Cap outside of the 'big 8' to get a booking. "'Ctnsqtresr-^on6w~'Hiairdy"s' ■ High' which opens tomorrow (Thurs.). Davis Ends MG Decade Hollywood, April 11. Frank Davis, producer at Metro for 10 years, checks off the lot AprU 22. His last production was 'It's a Wonderful World.' Tit for Tat . Last year Nate Blumberg, Uni- versal prez, was feted by the. trade .press editors, at which time the film exec stated he would play host, in turn, a year from that ' date, if everything wentwelL Tonight (Wednesday) at the Hotel Astor, New York, Blum- berg will fete a dozen from the press. LOEW, WB EXECS BDY-SELLOWN FILM STOCKS Washington,' AprU 11 Stock market operations by In- siders in six ^m companies were un- veiled last week in semi-monthly statement of the Securities & Ex- change Commission. Substantial pur- chases of Loew's, Inc., common by two officer-directors. David- Bern- stein and J. Robert Rubin each picked up 22,200 tickets, with Rubin selling 2,200. Gives Bernstein 29,300 and leaves Rubin with 34,175; Be- lated report showed Henry R. Win- throp, another director, bought 100 shares in January, Harry M. Warner unloaded 5,000 of his holdings of Warner Bros. $3.85 preferred, cutting his stake to 0,884. StiU has a poke comprising $1,379,000 worth of 6% convertible debentures and 62,860 pieces of commoa Daniel M. Sheaffer, Universal Coip. director, picked up 500 voting trust certificates of the holding company, swelling his pile to 17,000. Standard Capital Co., in which he is interested, has warrants for 111,283 certificates. Late statements showed George H. Eichelberger of New York unloaded 500 shares of Trans-Lux Corp. com- mon in October, cutting his previous total In half, and in August sold 100 shares. Big gifts of Monogram options by W. Ray Johnston were brought to light In January, company head gave away 48,093 and in February Santadaused with another 42,261. In addition, he picked up 68,130 options ahd sold 61,933 in January. Left with 6,197 at the end of February, in addi- tion to his 62,383 shares of common. Herbert J. Yates, Jr., of New York, bought 7,782 shares of $2 preferred In Consolidated Film Industries, of which he is both officer and director. S. E. C. learned in report two years overdue that Joseph R. Vogel held no financial stake in-Loew's Boston Theatres when he went on the board. FROM TRUSTEE TO FILNl PRODUCER-MXAUSLAND A. K McCausland, who represent ed Irving Trust Co. in the receiver- ship and trusteeship of RKO, has been natned business manager for Famous Productions, the producing unit headed by Harry Edington. Ed ington has a deal to make three fea- tures for Universal In 1939-40. McCausland is leaving his trustee spot to Join Famous Productions. He heads for the Coast in about two weeks: FILMSElLlNe? Lichtman and Rodgera Have Scheme for Giving Both Exhibitor and Distrib a Fair Break, Diepending on Whether the Picture Does Business ALTERNATE IDEA A system of percentage selling, worked out by Al Lichtman, xmder which the gross dpne by a picture will determine whether the share for the distributor shall be more or less than the figure established when the. contract is signed. Is embodied in the Metro sales policy for the 1039-40 season. Seeking, departures In selling, founded on a desire for more equitable grounds to govern the ex- hlbitioii of its pictures, bottt for it- self and the account without sacri- fice to ft picture's value, but also without benefit to a picture that isn't deserved, Metro' is offering the sliding percentage plan to accounts interested in it M-G also- has an- other deal as a substitute, which also features certain Innovations. The sales force imder William F. Rodgers wiU offer the Metro custom- ers either deal desired. Under the sliding percentage plan, the split will range from a basis of 25% upward. Each situa- tion will be taken separately and an arbitrary percentage, of 25, 30, 36 or 40%, as the case may be, set on the - various- features depending on the bracketing. The gross of the theatre, based in part on what it has been doing, and what it should do with the picture it is going to play, will determine what the rate- of percentage shall be. For example, if a picture, based on the theatre's normal gross or fig- ure set is agreed upon as a 35% picture, and it does more than the gross it should do to earn that per- centage, then the distributor gets more, but It the 35-percenter falls l>eIow the gross calculated it should get to entiUe it to that spUt then the distrib gets less for that reason. In other words, if the contractual agr^ment is that theatre shall pay 35% for a given feature.on a-l>asls of a gross of $10,000, and the gross realized is over that then for every 7%% Increase in box office receipts the rental is increaised 2%%. Thus should $10,750 be grossed, then the share for the distributor Is 37%%. By the same token, should the fea- ture fail to get $10,000, for every 7%% under that figure, the rental decreases by the same degree of 2%%. While under the plan there Is no decrease from the fourth lowest bracket of 25%, Into which group are the-least regarded features, it Is possible that pictures under the old system which would collect 40% in the topmost bracket regardless of how they performed at the b. o. under- the Metro systenb- could cost the exhib as little as 25%. On the other hand, which makes it as fair for the distributor as the account, if a 25% picture turns out to be a (Continued on page 47) McGnire at 20''Fox HoUywood, April 11. William Anthony McGuire checked In at 20th-Fox yesterday (Mon.) to await an assignment under hb new contract' as writer-associate pro- ducer. Recently McGuire washed up his. pact as writer-producer at Metro. BUCK JONES WINS ON WS ADV. OVERCHARGE Hollywood, April 11. — Suit-of-Buck Jones-against Uni- versal over exploitation costs of Jones' pictures has resulted in an award of $3,848 to Jones. Cowboy actor sued to recover sums deducted by the producers from grosses to cover cost of exploitation. Universal was charging Jones $5,000 per picture while the. western star held out for payment of actual costs only. Goldwyn Goes Beyond Suit s Original Purpose; Attacks UAs Internal MpL on 'Abuses' The UA Slant Charles C. Schwartz, UA at- torney, being out of the city, a formal rebuttal to the Steuer-. Goldwyn statement will not be forthcoming until today (Wed.), Murray Silverstone, general man- ager of UA, refused to make any comment and unofficial company attitude has been that not until Goldwyn . made any charges did the firm bother to rebut. Thus, when Goldwyn and, later, James Roosevelt made certain, state- ments, UA did likewise. The company points to the fact that it is over $2,000,000 ahead in Its 1939 revenue; comparable to the same three-month period in early '38, and this in face of cur-^ rent curtailments in the foreign market not obtaining .then.- This is in refutation of the 'idealistic policies' statement by Steuer. UA also points to the Sol Les-' ' ser - Ernst Lubltsch,. David L. - Lqew.. and David- O. Selznick (Jock Whitney)-new deals and renewals as evidence of com- . pany vigor. FORMAL RKO REORG ORDER SIGNED Federal Judge William Boudy in N. Y. yesterday (Tuesday) signed the formal order of conflrmatiin of the plan of reorganization of RKO. The judge's order found that he is satis- fied that more than two-thirds of the creditors, and a majority of the ^ckholders, have approved the plan. He is also satisfied that Sec- tion 221 of Chapter X of the Bank- ruptcy Act has been complied with, and he is satisfied with the identity, qualifications, and affiliations of the board of directors. Judge ' Bondy's order reserved jurisdiction for the court over the assets of RKO,' and over all persons, firms, 01 corporations to whom the assets may be transferred prior to consummetion. The court also re- serves 'urjsdiction over all persons interested in the estate, for the pur- pose of cariying out the plan, and for determining the right to aU claims against RKO, not yet deter- mined. "The last feature of Bondy's order called for the payment in full, in cash, of all claims for taxes by the U. S. Government on consummation. AU new claims will be paid after the old ones are settled, except those of the U. S. Government which will be granted a priority on all its claims,. The new company also will assume all the obligations of the old one. Application by Hamilton C. Ricka- by, representing Atlas Corp., to the Circuit Court of Appeals in N. Y. to dismiss the appeal of H, Cassel & Co., holders of $175,0C(, of deben- tures, for failure to file the record on appeal, was denied by the Court on Monday (10). The appealing corporation has until May 15 to file its record. At the same time John S. Stover, representing Ernest W. Stirn, RKO class 'A' stockholder, filed further objections to the confirmation of the plan of reorganization. Stover de- manded that Edwin Weisl state that he does not represent Atlas on the Paramount board of directors. If he' does make such a statement Stirn desires to examine him. Further, he asks that the final figures for RKO for the year of 1938 be submitted the court Samuel Goldwyn yesterday (Tues* day) attacked the hiternal manage- ment of United Artists Corp. and seeks to go beyond the original pur- pose expressed in his recent suit against the company, 1. e. the. alleged breaching of the Douglas Fairbanks, Alexander Korda and his own con- tracts by UA. In a statement Issued through his attorney. Max D. Steuer, in New York, Goldwyn indicated his organization, was opposed to the present UA internal management be- . cause of abandonment of the 'ideal- istic policies on which United Artists was formed.' He claims UA pledged itself not to practice 'abuses' and 'it possible to completely eradicate them from the Industry,'. When pressed for particulars con- cerning these 'abuses,' and for indi- cation whether there were abuses other than those complained of, in connection with Fairbanks and Korda's respective units,'' Steuer hinted that UA has departed 'from the high plane on which- it was or- ganized,' that is, to -distribute pic- tures made -by companies of the first magnitude, or by artists of the first rank, and that the present internal management has completely changed this policy. Asked whether this specifically concerns a number of new individual and independent pro- ducers who recently joined the com- pany, Steuer stated that this was ex- actly what Goldwyn had in mind. •Naturally,' said Steuer, these high-ranking producers and artists referred to in the statement were In- terested in having each of their pic- tures sold end distributed solely and only on the merits of each picture, and not coupled' with any others. That policy was implicit In every contract that was made. "The Goldwyn company, tied for a number of years to UA as its sole distributor, is affected by this change of policy, and United Artists Is also seriously affected thereby. Under the circumstances, the Goldwyn Corp. could have taken matter-: into Its own hands and proceeded on the theory that its contract was breached, and could havo declined to distribute Its pictures through UA. That would have seriously in- (Contlnued on page 47) Trad* Mark n«gl0t«rad E2S?'P'^''..''T BIMB SILVBHMAN •'"Wtal'ed Weekly br TABISTT. loc. „. Bia mivennan. President »« We»t 4«th Street. New Tork City SUBSCRIPTION Anon*! 110 Foreign Ill Single Coplei 2S Cente Vol. 134 IM No. 6 INDEX Advance Production Chart 22 Bills , 46^7 Chatter 153 Dance Bands 39-41 15 Years Ago.... 42 Film Reviews 18 Film Showmanship 8 House Reviews. 44-45 Inside—Legit 62 Inside—Music 40 Inside—Pictures ,. 10 Inside—Radio 312 International News.. 19 Legitimate 40-52 Literati 52 Music ,, , 39-41 New Acts 48 Night Clubs 42-43 Obituary 54 Outdoors ....54-55 Pictures 2-27 Radio 28-38 Radio Reviews............ '30 Radio—International ..... 36 VaudevlUe 42-43