Variety (Apr 1939)

VARIETY Wednesday, April 19, 1939 CANCELLATION ANGLES lAOM A%MOOT EXHIBITOR POINT IN THE TRADUIODE Leading Indies Doping Out Various Aspects—Buying and Benefits Weighed—Arbitration Limitations Another Important Phase Pending the approval of the trade practices code by leading indie ex- hibitor organizations, with or with- out exceptions, considerable discos'- Blon' in theatre operating circles hinges on the extent to which ex- hibitors will benefit by the cancella- tion features of the plan. Among other things, the question arises on how the cancellation clause will work where tiieatre chains buy pictures under lump sum deals, and then allocate the rentals themselves to their own houses. Under such deals, where made, there would be nothing to stop a lump-sum buyer with a representative - string of houses from allocating rentals low enough in one house to get the 20% privilege, while adding on rental in other spots where either 15% or 10% would be permitted under average of rentals set The exclusion privilege is 10% when the rental averages over $250. It is 15% when the average licensing tee is from $100 to $250 and 20% on rentals of under $100. There is nothing in the code, as written, which determines the average rental on a basis of a week, for instance. Regardless of the run of the piC' tures, if the rental isn't less than $100, the 20% cancellation privilege cannot be used. In other words if one house plays a picture for one or two days, the average rental for such a theatre would be less than nms of lonjger length. Thus, two theatres might pay the same rental on given fea- tures U figured on a daily basis, but average, up very differently when calculated on the runs of each, A majority of the average rentals, It is claimed, would run less than $100. For this reason, plus the fact that many theatres change shows three and four times weekly, the smaller indies and a fair number of major circuit houses will fall into the 20% cancellation class. However, the exhibitor in many Instances, it is feared, is going to be unable to knock out 20% or one- fifth of his entire supply-because he may need all the pictures he can buy 111 order to continue operating. If In double bills, the exhib changing four times weekly now requires eight pictures a week or a total on the year of over 400. This makes him play virtually everything he can buy.' It Is a question, also, whether tl^e Indie may find. It pbss\ble to buy as easily because' an opposition house, with better buying power, may now pick up more pictures on the ground that from 10 to 20% of those bought may be cancelled. . Hew Abbnt the OpposlshT There Is another field of thought In buying circles which revolves around the question of whether stronger houses may want to take advantage of their full rejection powers, because such pictures tbrown out would then become available to the next guy. While the picture cancelled by the one house may not be so good for that opera- tion. It might be used to advantage by another house. As pointed out in buying circles, there is a theatre for every picture. , A possibility Is that, under the ex- clusion provisions of the trade prac- tice code, deals may be made on a basis that If there are any cancel- lations to a distributor by one the- atre, they may be made automatical- ly available to-the other fellow. In other words, imder such selling the distributor might offer 'B' the- atre any of his pictures that are be- ing cancelled by the opposition 'A' theatre. Thus 'B' theatre would be assured of anywhere up to 20% of the distrit>s pictures, if cancelled out by 'A' theatre. The question of cancellation of pictures on moral, religious or racial grounds is something else again. If oner:exbibitDr~Tancelted''a~pictare "oir such grounds, with arbitration up' holding his reasons, can an opposi' tlon theatre in the same situation then avail Itself of that picture?- It is assumed it could. In addition to the cancellation feature and elimination of score charges, the average exhibitor is very iliterested In iti arbitration system that will impartially handle disputes AISNER'S EASTERN MC MAY G£T PAR RELEASE arising between buyer and seller. The demand for more definite de- tails of arbitration machinery is likely to be insisted on by the ma- jority of exhibitor organizations be- fore final acceptance of the code. Numerous exhib bodies have indi- cated acceptance and endorsement of the code with this and some other exceptions. The only Important rejection fiat- ly is that of Allied States Assn., which has informed the distributor committee it refuses to consider the code because of lack of arbitration details, and other trade reforms It seeks, including elimination of block booking. William F. Rodgers, Metro's gen- eral sales manager and spokesman for the distributors on the code, stated yesterday (Tiies.) that up to then only one exhibitor body outside of Allied has turned the trade prac- tices concordat down fiatly. This is the Intermoiintain Theatres Assn. of Utah. No reasons were given for the rejection, according to Rodgers, who also adds that Allied States has never officially informed the dls- tribs of its reasons for failing to consider the final draft While Uie MPTOA is submitting the code, as ultimately drawn, to its board members and will convene the directors at an early date, not yet set. It is believed ibia national body will be among tiie groups accepting. The ITOA of Southern California and Arizona, the MPTO of 'Virginia, the Theatre Owners & Mgrs. of the Rocky Mountain Region and the ITOA of New York have all in- formed Rodgers of their acceptance of the pact with minor reservations noted. The Allied Independent Theatre Owners of Iowa & Ne braska has endorsed the code with one exception and is submitting rec- ommendations to its board of di- rectors for final action. N. T. Indies' Partial OK After intensive study of tiie latest revised trade practice agreement, tiie Independent llieatre Owners of N. Y. has partially endorsed the code as a step in the right direction. It is not entirely acceptable to the theatre owners, however, due to omission of all vital trade practices which the code should cover. According to Harry Brandt, presi- dent of the I. T. O., the new agree- ment fails to provide specific guides for arbitration. While arbitration is specified where it Is claimed a con- tract, has been breached, the code specii&cally exempts from arbitration the question of license fees or other terms and conditions on which pic- tures may be licensed. Unless the phrase 'other terms and conditions' is clarified, much confusion is bound to arise as to exactly what is the subject of arbitration. The I. T. O. is unqualifiedly op- posed to any code which does not make every dispute, no matter what its nature, the subject of arbitration, Failing that, the code would have to be rewritten and greatly amplified. Snndry Objections The' association Is also not In aC' cord oh other grounds. First, while exhibitor associations are to choose the general panel of arbitrators, the code provides that the neutral panel of arbitrators, is to be mutually agreed upon by both distributors and exhibitor interests. This means that affiliated and independent exhibitors shall have an equal voice in their selection. I. T. O. believes that choice of a neutral panel by distributor reP' resentatives is a sufficient protection to affiliated exhibitors and only indie exhibs should have a voice in choos- ing the panel, instead of both classes of theatre owners. Second, code provides that if distributor breaches a contract, arbi- trators are restricted to awarding damages on the amount fixed in the license contract This, it is claimed, -merely—perpetuates present unfair provision of standard contracts. Ar- bitrators should be allowed to ade- quately compensate an exhibitor for any breach by a distributor, since the liquidated damages, as fixed in the standard contracts, unreasonably limit such damages. Finally, one thing which hasn't been dealt with and which the I. T. O. feels should go in, is a clause to Bobert Aisner, head of .Heraut Films, who plans making several pictures at the Eastern Service stu- dio, Astoria, L. I., returned from France this week. He went to Paris to arrange details of his first on this side,. 'Bricks Without Straw.' A budget of $300,000 has been set, and Sylvia Sidney will star, with Marion Gering directing. Scripting will be by Irwin Shaw, author of The Gentle People.' Aisher will start shooting next mbntli. Negotiations between Aisner and Paramount for release by latter of 'Bricks' are held up pending Aisner's return from Paris ^nd Russell Hoi- man's return from Hollywood. Lat- ter will be back In two we^, fol- lowing Par studio huddles. S. W. SOUR ON MUSICALS; OK WESTERNS Other News of Interest to Films Italy feels lack of Yank plx... .Page ig Metro, Par and 20th O. it. In Reich Page 19 Irene Rich piqued at Welch's ......Page 34 Goldwyn countersues radio agency ...Page 35 Radio reviews: PhU Baker, Bob Benchley, Blng Crosby, 'Grouch-Club* ............Page 44 Mae West's big $17,600 in Atlanta;....... .;...Page 49 Pic coin for strawhats. Page 57 Details (A WB Conversion Program M Set; 6% Debentures Doe in SepL Oklahoma City, April 18. Only the bravest exhibitors are showing filmusicals in this and near- by states nowadays, with the gallop- ing notes having definitely soured as far as the folks In the villages are concerned. Even the tbpnotch musi- cals are killing cashiers from loneli- ness. ' The occasional exception often gives exhibitors hope, but after he runs a couple more he tisually says never again. Preference for, good westerns, on other hand, has mounted even In the bigger cities. 'Mustangers,' such as Stagecoach,' 'Oklahoma Kid' anid Dodge City* are finding plenty of folks lining up for their pasteboards. Rtiult has also been a healthy addi- tion to the b.o. at the smaller houses playing the dyed-ln-wool horse operas from the. smaller studios. U. S. Bin of Particulars To Be Filed by May 1 The U. S. Government will file its bill of particulars against the major companies by May 1, if not sooner,' is the statement Issued by Robert L. Wright, special assistant attorney-general, handling the ex- amination before trial of United Artists. Harry Muller was on the witness stand during Thursday's (13) proceedings, and was questioned on exhibitor contracts, names of pro- ducers and their Identities, amend- ments to contracts. Identity of pro- ducers' representatives In N. Y., con- tracts on single pictures, and meth- ods of Indexing cards. Various ex- hibits such as long-term contnacts were given to the Government to' examine. Hearings postponed' imtil today (Wednesday), at which time the U.S. may call Harry Gold, Jack Schlalfer and Paid Lazarus of UA to testily. BROADCASTERS RAPirWOOD 'CHISEI^' L. A. to N. Y. Neil Agnew. Fred Astaire. William J. Baker, Jr. Irving Berlin. George Brent Nana Bryant Ted Denton. Gene Fowler. Dave Ciould.. MUton Gunsburg. Nils T. Granlund. Mitzi Haines, Joy. Hodges. Sidney Howard. Larry Kent Feg Murray. Lya Lys. Lillie Messenger. Norman K Moray.. Troy Orr. • Ben Peskay. Ralph Rolan. Eleanor Powell. Sam Sax. Nick Schenck. Randolph'Scott Sol C. Siegel. Harry Spears.' Kathleen Wilson. Mrs. Max Winslow. N. Y. to L. A. Maxine DeShon. Richard Carlson. Earl Carroll. Mr. and Mrs. WUl Fyfle. Harriet HilUard. John W. Hides, Jr. Sam Levine. Mr. and Mrs. Albert Lewin. Russell Morrison. Rags Ragland. Charles Ruggles. S. Sylvan Simon. George J. Schaefer. PhU Van Zandt Anthony Veijler. Franklyn Warner. Andrew Weinberger. Gordon £. Youngman. Washington, AprU 18, Strained relations between films and radio have been tautened by the attempted free-time grabs of two Hollywood producers, which have caused the'National Ass'n of Broad- casters to protest' chiseling attitude toward broadcasters. Warning was sent to all association members last week that Metro and Warner Bros, are seeking to Induce station pro- prietors to pl«ig the film industry without remuneration. Direct rep- resentations to WB, but only sideline comment about the M-G attitude^ The trade body pointed to the WB transcription .series, 'America March- es On,' which Harry Maizlish, man- ager of KFWB, Hollywood, contends is strlcUy non-commercial and the script, offered as news about forth- coming film production, disseminated by Metro. Commented In italics that whUe M-G-M will spend $2,500,000 in boosting features in papers, maga- zines, etc., the studio proposes 'not a dime for radio.' TORRES SUES WB FOR 11,000,000 ON 'JUAREZ' Los Angeles, April 18. Miguel . C. Tbrres, Mexican pro- ducer, has filed a $1,000,000 suit against Warners, charging parts cf his picture, 'Maximilian and Car- lotta' were used in 'Juarez.' Plaintiff claims his script was re- jected by Warners in 1036. Gabriel Pascal also is being sued for $51,000 by Torres, charging breach of contract Plaintiff alleges Pascal withdrew from a co-produc- ing deal to make Italian-German versions of Torres' Spanish film, ■Juarez and Maximilian.' ■ piohibit a distributor from reallocat- ing pictures for any reason, such as redesignating a 'B' picture as an 'A'. Once classified, original designation should be allowed to stand. Zehner Goes Hays Hollywood, April 18, Harry Zehner, Universal exec for 18 years and recentiy the studio's censor contact, moves over to the producers' association to work with Joseph I. Breen.' Fills the berth formerly held by Iselin Auster. With more than 75% of outstand- ing debentures deposited under the. i)eposit Agreement, Warner Bros, directorate last week declared the Plan of Exchange (dated July 22 last, year) effective. . This provides for exchange of Optional 6% Con- vertible Debentures, due next Sep- tembeir, for new 6% debentures, series being due In 1948, Under the plan, $19,338,000 aggre- gate principal amoimt of the old' bonds were deposited and. certifi- cates to be exchanged for new bonds issued for same. Statement to bond- holders said that $6,196,000 worth of the old bonds have not been de- posited under the Flan of Exchange and are now outstaftding. Directors gave holders of these until next May to exchange for the new obliga- tions. The new bonds, due In 1948, have been listed on the N. Y. Stock Ex- change and will be sent direct in exchange for old liens to those de- siring to exchange. Certificates of deposit Issued to old bondholders who wished to switch to the new issue now are exchangeable for 6% debentures due in 1948. Warner Bros, statement to holders of these certificates of deposit showed that $28,534,000 aggregate principal amoimt of tiie old bonds' due next September were outstand- ing at the close of business last April 11, of which $19,338,000 worth have been deposited under the plan. Be- sides the undeposited total, $485,000 principal amount of Certificates of Deposit are held in the company treasury for use for sinking fund purposes. Warner' Bros, has bought $3,102,000 worth of old bonds (due next Sep- tember) in.the open market and re- tired them. Company has from now until next September to retire the $6,196,000 worth of old liens pres- ently outstanding. 'While Warner Bros. Is hopeful that an additional $500,000 worth or more of old bonds wiU be exchanged, open market operations may be resorted to in handling others. Warner Bros, now has a bank loan set enabling company to borrow up to $6,000,000. Loan is to be at 5%,. being in the form of notes. These will be retired at the rate of ei>out $500,000 every six months starting in April, 1940, with final payoff in 1944. . Stanley Co. of America, some theatre properties and $3,000,000 mortgage on the Burbank studio, Hollywood, go up as security for the loan. SAILINGS April 21 (New York to Paris) Truman Talley (Queen Mary); April 19 (New York to Paris) Her- man Wobber, Walter Hutchinson (George Washington). AprU 19 (London to . New York) Ben Blumenthal (Paris). April 18 (New York to London) Mr. and Mrs. Fred Astaire, Mr. and Mrs. Godfrey Tearle, A. E. Matthews (Georgic). April 15 (Los Angeles to Hono- lulu) Richard Crooks (Lurline). April IS (Los Angeles to Tahiti) DeU Lord (HaraU). AprU 15 (New York to London) EUen Drew, Ray Mllland, W. Buch- anan-l^aylor, Brimo Walter, Sir Robert Peel, Jeffrey Bernard (Aqui- tanla). AprU 15 (London to New York) Gieorge Sanders, Adolph Zukor,_ Gladys Cooper,' Victor. Savilie, Hela Lugosi, Cierald C^k (Queen Mary). ARRIVALS (At the Port of Neva York) Mr. and Mrs. WUl Fyffe, Albert Basserman, Jean Sablon, Robert Aisner, Paul Giaetz, Pla Igi, Walter Saxer Dancers.