Variety (Jun 1939)

4 VARIETY PICTURES Wednesday, Jane 7, 1939 SELLING PEPS UP WITH EXHIBITOR ACCEPTANCE OF CODE PROVISOS Arbitration Setup Expected to Be in Operation Within a Month, but Meantime Exhibs Favor Accepting the Code Individually 'The trade practices code and ar- bitration thereunder should be in operation within a month, It is "be-, lieved, with the worlc of setting up boards in the various branch cen- ters begun by that time. Meantime, predictions are that a majority of the country's exhibitors will agree to the code and arbitration so . that deals on the 1939-40 product can be negotiated under the concessions made by the distributors. Film salesmen report . a wide- spread tendency on the part of ex- hibitors to accept the code and write the 1939-40 film deals in ac- cordance with the various provisions worked out, including arbitration. Even if exhibitor associations to which they belong may take is^ue, with the code, as finally written', and attempt to get even further conces- sions, many theatre owners are go- ing to accept the code as individuals anyway.. The exhibitor in a given situation who refuses to.accept for personal or organization reasons is going to be buying film under a handicap against opposition that is taking advantage of the code, 10-20% cancellations, etc. This very fact Is almost certain to place the code Into quick and complete operation in such cases. Now that the code has been finally drawn and the. complete machinery of arbitration worked out, the selling of '39-40 film, which has been lag- ging badly, is likely to pick up im- mediately, even bdtore the arbitra- tion boards themselves have been set up. This will not require much time. Mpls. Meet May Spur It The Allied States convention in Minneapolis next week, it is figured, may act as a spur to getting the code Into operation at an early date. It will be discussed from all angles at the convention and distributor lead- ers will be present to take part in the. issues reaching the floor. Various important exhibitor lead- ers not aligned with Allied States will also be present, but Ed Kuyken- dall, president of the Motion Pic- ture Theatre Owners of America, will not be among them. He is tak- ing the position that the MPTOA and Allied have nothing in common. An odd position of the MPTOA on the code, particularly arbitration, is that some of its members who are affiliated with major chains will be on one sii^e of the fence under ar- bitration while others (simon-pure Indies) will be on the other side. The dlstribs and the aSiliated thea- tres are as one imit under arbitra- tion, the indies as another. Kuykendall, in Myrtle Beach, S.C., yesterday (Tues.) on a South Caro- lina exhibitors convention there, will be in Roanoke, Va., next week for a Virginia convensh. On May 25-26 the MPTOA president at- tended the Missouri-Kansas conven- tion in Kansas City, and on May 28- 30 he was in Jacksonville, Fla., for a local exhlb conclave. He is ex- pected to be in New York toward the end of the month. MPTOA ap- proval of the code is virtually cer- tain. Tippetts Most Defend U's 270G Snit-Court entirely from outside the Twin Cities, according to the branch '.managers who, however, point out that this is always the case because actual solicitation of Twin City ex- hibitors does not occur until August or later. At the same time, it's as- serted, a number of the more promi- nent Twin City independents, as usual, are taking the initiative in making new-season deals. W. A. SteSes, Northwest AUied president and Allied States' national convention chairman, asserts it's 'imperative' for the Northwest inde- pendents to hold ofl from buying now not only because of the .'possibility' of the formation of the national buy- ing chain, but also 'because 'reduc- tions pn film jcosts are essential if the independent theatre owner is to continue in business.* He predicts that the Allied States' national con- vention . will accomplish -a move- ment to force such lowering of film costs.' Okla. Jury IStUl Got Oklahoma City, June 6. The arbitration code has exhibi- tors in this state thinking if nothing else. Opinions are scarce though all admit they are giving it serious con- sideration in an effort to form 'an opinion. Some exhibitors have re- marked that Vf and when' they are able to com^tletely understand it, they'll be able to make up their minds about it' Exhib leaders who have followed negotiations closely and kept abreast of developments express diversified opinion. Morris Low6nsteIn, prexy of MPTO, has expressed approval of the trade-practice code 'for the good it has done and will do, and for the influence, it? existence will have on industry affairs.' Other leaders have expressed opin' ions as chiefly in that while the re suits of code points are a matter of 'guess work' the fact that the trade practice agreements have actually been arrived at speaks well for the Industry. Biggest, expression of favorable sentiment i^ not so much on what the code contains as what it rep' resents in the way of the industry's willingness and ability to 'clean its own house.' The Appellate Division of the N. Y. supreme court Monday (5) de- nied an application by John D. and Eugene T. Tippett, to appeal to the Court of Appeals, highest tribunal in the state, from aq order refusing to dismiss a $270,000 suit against them by Universal Pictures Co. Universal claims a .split profit agreement between the Tippetts and Carl I,aemmle, whereby Laemmle awarded them the raw film stock contract of Universal from 1927-33, and during which period the film company purchased 300,000,000 feet of raw film stock. "The commission was $270,000, and the company is asking for the return of that amount. NW Selling 'Normal Or Better/ Aver Exchanges Minneapolis, June 6. Although. the word has gone out to all exhibitors in the territory to refrain from buying 1939-40 prod- uct until after the Allied States' na- tional convention, June 13-15, es- pecially because of 'plans to organ- ize a huge nationwide independent theatre owners.' buying circuit,' lo- cal exchanges insist that sales are formal or better. In fact, nearly ell the branch managers claim they're running ahead of the corre- fiponding period last year. Branch managers assert that the Independent exhibitors hereabouts are not taking seriously the pro- posal for the film-buying chain of 2,500 theatres over the entire United States. They think it's just 'a lot of talk, hot air and hooey' and they're proceeding to make their film deals as usual, the local ex- change heads declare. The business now being written by the exchanges-is coming almost BRITISH WAR SCARE FADES, FILM B.O. UPS Cessation' of war fears to a certain extent is responsible for the up swing at the boxoflice in Great Britain, ac- cprding to C. G. Dickinson, Para- mount sales manager in England Dickinson arrived in N. Y. the mid- dle of last week accompanied by T. C. Reddin, advertising manager for Par in Great Britain. Both now are on the Coast attend ing the annual sales convention. SAILINGS June 28 (New York to Paris) Elsa Maxwell (Notmaiidie). June 17 (London to New York) Johnny Johnstone, John Steele (Mauretania). June 9 (London to New York) Jack Davis (Washington). June 7 (London to New York) Sue Ryan, Danny White, Paul Draper (Aquitania). June 7 (London to New York) Ralph Hanbury, Maurice. Cowan (Normandie). June 7 (New York to London) Johnny Johnstone, Vic Orsatti, Sonja Henie, Charles Tucker (Queen Mary). June 6 (New York to Paris) Mr. and Mrs. Thomas Mann, Erika Mann Auden, John Barbirolli, Maurice and Cordoba (He de France). June 4 (London to New York) Sir Adrian Boult, Leon Goosens, Arthur Bliss ((Seorgic). June 3 (New York to Stockholm) Cornelius Vanderbilt, Jr. (Kungs holm). ARRIVALS Mr. and Mrs. Fred Astalre, Sir Adrian Boult, Arthur Bliss, Carl Zuckermayr, Jean Masson, Wanda Cochran, Lady Dunn, Gus Scbaefer, Nit Liebeskind. H wood Britons Salute Royalty Via NBC Gab Hollywood's British film colony combines next Sunday (11) for a gala 'salute' to visiting King and Queen via a worldwide NBC hookup which will be heard 3-4 p.m. in the east, or just as George 'VI and Eliza- beth are with President and Mrs. Roosevelt at Hyde Park, N.Y. Ger- trude Lawrence left last night (Tues- day) by train to m.c. the show and Radie Harris, who conceived the idea, fiew to the Coast Monday (S) to script and aUgn the film people. Sir Cedric Hardwicke, BasU Rath- bone, Leslie Howard, Herbert Mar- shall, Ray Noble's orchestra, Greer Garson, Henry Stephenson, Roland Anna Nagel, Edna Best, Bartholomew, Laurence Errol Flynn,. Raymond C. Aubrey Smith, Norma Shearer (who is Canadian by bjrth), Cary Grant, Brian Aheme, Judith Anderson (Australian) and David Niven will participate. Because of the wealth of talent, several will be grouped in sketches, but the main idea is a 10(>% English accent over the radio. Judith Anderson, Olivier, Marshall (who is en route east) and Massey will do their stuff from the New York end; all the others from the Coast. Frederick Lonsdale, in the east, has authored a special toast to the king and queen. Young, Freddie Olivier, Massey, Par-CBS Salute Hollywood, June 6. Paramount is cooperating with CBS on a half hour broadcast Satur- day (10) saluting Thomas A. Edison on the 50th anniversary of the in- vention of kinetescope. Program airs from banquet room at Par sales convention. Jack Benny emceeing. Adler's RKO Deal Luther Adler has closed a con- tract with RKO for pictuies. He has gone to the Coast, and expects to begin work shortly. ' ' Adler was represented in nego- tiations by Phillips & Nizer, attor- neys. Amus. Stocks Ughdy Controlled Washington, June 6. Tight control of amusement corporations with stocks listed on na- tional exchanges is revealed in a special Securities t Ex- change Commission study on distribution of American investments. Novel analysis, shielding identity of the firms, showed that more than three-quarters of the individuals interested in amusement enterprises account for under 100 shares apiece. For amusements—presumably leading film companies—the S. E. C. study was confined to seven units, with an aggregate of 5,682,361 shares outstanding. Researchers brought out that two of the companies are 'closely-held' outfits while, ownership of the other five is fairly well spread. In the two 'closely held' companiesr-with 1,995 investors accounting for 405,202 shares—the small investors (less than 100 tickets) repre- eented 04.2% of the total. Considerably above the average for. 244 cor- porations of more than 50 types. This group accounted for only 8% of the outstanding paper, or 28,430 tickets. While ownership in the other five amusement concerns was much more generally distributed, even these were tightly controlled by a minority of the investors. WiUi 38,909 persons- holding 5,277,150 shares, >0,455, or 78.5% of the total, represented but 15.6% of the outstanding ' ducats. S.E.C.-WPA Analysis of Major Films Capital Structure, Except RKO, UA Washington, June 6. Thorough physical and fiscal exam of major film companies (excepting RKO and United Artists) shows Educational Pictures leads the pack from standpoint of net sales to capital. Special study of picture business ledgers by the Securities and Exchange ComitAssion and Works Progress Admin- istration gives new comparison of the money aspects of the industry. Novel picture revealed seven companies, which have 689 live and IS inactive subsidiaries, turned'in a gross profit of $197,317,733 on sales of $406,855,095 in their fiscal years ended Dec. 31, 1037. Operating profit was 10.1% of sales, up from 8.7% in 1936, while the net was $34,000,000, or 8.3%, compared with $27,000,000 or 7.2% the prior year. The Federal researchers made the following discoveries: Total dividend payments of the seven enterprises were $22,000,000 in 1937, against $14,000,000 in 1936 and $6,000,000 in 1925. lioew's has the biggest executive payroll ($2,717,000, compared with 20th Ontury-Fox's $906,000) and paid the highest ($1,296,703), second highest, and third highest, salaries. Fattest check from any other was $370,000 handed over by Paramount. Figures for others were: Columbia, $182,020; Educational, $64,385; Monogram' $24,153 .(for 11 months), Universal Corp., $104,355; Universal Pictures, $143,500; and Warners, $209,100. No 1937 dope on (Srand National. - Columbia had the highest asset-to-liabilities ratio, $9.12 to $1, followed by Loew's $4.86 and Paramount $4.43. Educational's net-sales-to capital ratio ($15.90 to.$l) was challenged only by Warner Bros., with $12.51, No other company topped $10. Inventory. Ratio of net sales to inventory ran as follows: Columbia, '$2; Educational, $6.24; Loew's, $2.80; Paramount, $4.55; 20th Century-Fox, $4.55; Universal Pictures, $2.09; Warner Bros., $4.46. Educational led also on basis of net profit (before interest) compared with working capital. Showed a return of $24.17 for $1, against (^lum> bia's.$l.S6; Loew's $13.68; Paramount's $8.54; 20th Century-Fox's $21.09, and Warners' $7.81. Study revealed Universal Pictures' loss was $14.46, while the parent. Universal Corp., went in the hole $9.87. Material improvement for the industry as a whole. Combined operating profit of the seven companies went from 8.7% of sales in 1936 to 10.1% in 1937; net profit rose from 7.2% of sales to 8.3%; and return on capital (book value) climbed from 9.2% to 10.6%, Combined balance sheet assets rose from $512,000,000 in 1936 to $530,000,'- 000 on Dec. 31, 1937, but current liabilities went from $37,000,000 in 1939 to $55,000,000 in 1937. For the industry as a whole, the ratio of assets to liabilities slipped pro- gressively although business was improving. Figures were 3.90 to 1 in 1935; 3.52 to 1 in 1936; and 3.12 to 1 in 1937. Loew's led in business volume in 1937, with sales of $107,821,923. Next was Par, with $104,185,953, the only other studio topping $100,000,000 Warners led in assets ($177,545,000) and current liabilities ($20,231,000). with Loew's second and Par third in each category. Gross 1937 profits ranged as follows: Columbia, $7,585,000; Educational, $952,000; Loew's, $31,103,000; Monogram, $78,000; Par, $52,449,000; 20th-Fox, $24,120,000; Universal Pictures, $5,646,000; and Warners, $75,454,000. Gohry HVood-Boond; Plans to Make Pic There Paris, May 28. Sacha Guitry told the American Club at its weekly luncheon this past week that he has succumbed to the call of Hollywood after many years holding out. He announced that he was going to Hollywood shortly to make a film. Although he has already visited the U. S., this will be his first ap- pearance in America's film capital. Guitry made no mention of a con- tract or the company with which he would be connected. OAer Ne ws of Inter est to Films Foreign coin ciirbs U. S. films Page 11 Columbia's South Africa distribution page 11 I.eon Janney's radio serial Page 17 Edgar Bergen's tonsilectomy !page 17 Radio scripting discussed at writers' congress Page 18 'Big Town'-i. G. Robinson layoff.. Page 19 CBS abandons Hollywood fee Page 19 Joe E. Brown stays on tadio ', ' Page 19 'Circle' off, due back Page 23 Jimmy Fidler renewed on air Page 24 Television ' ' Pages 28-20 Par-Dumont television Page 29 Radio reviews: Elliott Rooseveltj Matty Malneck, kathleen Norrls ; p._g on 1938-39 legit resume !!!.!!!..;!;;!;Page 41 AL BOYD CAN'T SETTLE $55J10 DEBT FOR 3G Philadelphia, June 6. Common Pleas court here last Thursday (1) refused to allo\y Al Boyd, circuit op, to compromise a $55,710 judgment for $3,000. R. W. Doty,. Secretary of Banking of Pennsylvania, petitioned the court to accept the settlement as the best that Boyd, once wealthy, could do at present. Judgment represented the amount of three promissory notes signed by Boyd and held by the Franklin Trust Co. when it closed in 1931. L. A. to N. Y. Herbert Akerbergr. TVllllam H. Baker. Kdwln Clay. Broderlclc Cranforil. Harold K. Curtis. Walter Danirosch. Walter Damroscb. Mann Hollner. MIrlom Hopklna. ■<>idney KlnKsley. Eddie Lewis. W. B. Lewie. .\natale LItvak. Herbert Mnrnhall. John Norton. DouRlna .Muntgoin- er>-. .^1 Fearce. Harry Popltln. Hubbell RoblneoB. James nooseviiU. Meflord Runyon. Budd Hchiilberic. Richard .'^bennyn. Vinia I)ros Short. Herman .stein. Deems 'faylor. Walter Telley. Niles Traniiiiell. N. Y. TO L. A. Max Baer. Buddy de .Sylvo. flndle Hnrrls. Arthur Homblow. Jack Kapp, Irene Kuhn. Gertrude Lawrence. Aurlol J^r. Leo Morrison. Jean Mulr. Mr. and Mrs. I'liii-K Orsatti. Oscar Serlln. Lee Stewart.