Variety (Oct 1940)

Wednesday, October 30, 1940 PtCTURES 25 exhibition of spid features , m the complainant's theatre specified, m his complaint was ^ in fact because the ♦hpatre licensed: to exhibit them pn the run requested by «(e complain- ant y/as a circuit theatre. C In determining 'whether;; the exhibitor's complaint is established by the evidence, the arbitrator shall take into; consideration, among, other things the following factors iarid ac- cord to them the importahce and weight to which each is entitled, te- (jardless rtf-the order in which they are listcdr the terms, if any- offered in respect of each of the two. com-' petirig ^ fheatries; the seating capacity of each of said theatres; the eapacity of each for producing revenue fbr ■the distributor; the character, ap- pearance and condition of each, in-., eluding: - its furnishings, - ■ equipment and c6hv,cniences; the Ibcatioh: of each, of said theatres; the: character and iextent of thi^ area -arid . popu- latiph each.. serVes; th.b iEdmpetitive conditions, in the areia in Which: they •/are located; their comparative sui t- ahility** for: exhibition of the dis- tributor's features oil - the, run rev quested; tlje 'character and ability of ; thC!-eixhibitbr operating' each and his : reputation generflilly in the industry. and in. the community for showmhc-.; ship, honesty .and faii" der-Iing; the. policy under which each of' the the- atres has. been operated -ahd ;th<* policy . under which the complaihiant .proposes to operate his ;Said theatre it he obtains the run requested^ the. ; flhancial respOrisibility of the exr hibitbr. pparating each of said the- atres;.'and the distributor's prior re- la,tibns: with each :6f the two theatres invdlyed and with their .owners, and operators and any equities, arising tiierefrom. , .■; ' ' • ■ ": Finflings .Not Rietrpabtive D, ' .If ill any suoh .arbitratidri the' . arbitrator; findsM for the complain-;. .ant, he frisy enter aa awiard agaihst the distribUtbr which shall not affect the liceiiise to exhibit any . feature then under license to the circuit the-; litre but which shall prohibit such distl-ibutor fromi thereafter .licensing its featurss for exhibition; either in the circuit: theatre specified; in the cbniplaint' the riih. requested by the cbmplainant", or in !the complain- ant's theatre.;, specified in the .com--. plaint, on such • riiri, -Otherwise than by .a separate contract or agreement which shall. not be ■- a. part,, of iany . contract or agreement for the licens-; ing of features for exhibition in any bther -theatre; or cphditibned upon the licensing of: features for exhi- liitibn in any other theaitre. • ; E.; After a final award' in' favor of, a cpmplaining exhibitor has been made . under this' Section,. isUch ex- hibitbr, may institute a further ar- bitration ' proceeding (to be; held be-: lore the arbitrator who 'entered the' original award, if available) upon the girb/uhd that such award has not - been complied with in good faith by -;the distributor :against whicK it was entered. If in any such proeeeding .the arbitrator shall find*? that the; distribUtbr has hbt complied in good faith with the original award, the arbitrator may. awaird 4anniages to the.~ exhibitor for loss, resulting froni the; distributor's, failure to: comply with the original., award but any. siich : award of darnages ishall ■ be purely compensjatbry. . ; ; ■. Any 1 u rther arbitratioh ^ proceed- ing for ah award'of damages fpr'yip- latiPh of the original siward mUst be cbmitiehced within sixty days., after . such viblation has occurred, by filing a statemeht specifying.the facts con- stituting each; alleged viol atibn for which daniages are -sought and the exhibitor's allieged damages result- ing firom. each such alleged violation.. No awaird of damages shall be made i:in any. Such proceeding lor any vior latipn of the original award not oc- curring ; within- said sixty day pe- riod,- but prior Violations may,, in any such proceeding, be considered by the arbitrator as evidence beair- ing upon the question of the dis- tributor^ gd^d faith, -v ^ / Thi^^-lTear Clause On T ,(1) For: ai period of thiree years after the entry of the decree herein ;each of ; the ednsentihg ; defendiarits :WiU.notify2« the Department of Jus- tice imniediately'Qf any Ibgally bind- ing cpmiriitmeht for the .acquisition; by it pf any additional theatre or theatres. . (2) During such period each such • defendant ; will, alsoi; report* ta the Department of Jiistlbe on or before the tenth day of each month the changes in its theatre position, if any, that have bccurr^d duiring the preceding month, as fbllows, together with a statement of the reasons for such changes: . (a) .Theatres: ;contracted to: be . : built, or under construction;; : (b): Theatres lost or dispbsed, ;;'of;s-' ^ .' ■• y .(e) Theatres acquired; ' <d); Interests in. theatres ac- ■icjuired, .with a statement of this /: . nature- and extent. of such, ip- '■■;terests, ■ ■ ■ '.V':.-. ;■■ " (3). If upon, receipt of such in- fbrmaition the Departnrieht of Justice requests.any - siich defendant to fur-, nish f urther information with respect to 'any of the;;abPVe; transactions in which it is inyblved. such defendant .will make;:a reasonable efTort to sup- ply .such; infp'rmatiP'n; prbmptlyl,, ' ' Informatib (4) No iriforrhatibn f u r h i s h e d under' subdivision (1),' ..(2) ; or '(3) hereof sliali be divulged by any repr resentative;; of ' the' Department of Justice to : any persbh other than ^a duly authorized reiDresentative of the DepartnioTn.t of Justice" except in. the c'pUrse .of lesat proceedings,tb which^ theMJnited States ii-a' party, .br as pthe'rvvise'.roquired by law. (5 ) ; ; Fbi^ a period of three years, fbllcwing the entry of ■ this decreb, ho consenting defendant shall enter upbh a; peneral program, of expand- mff. its theatre holdings..' Nothing herein shall prevent any such; de-- fendarit; frbm acquiring, theatres or interests therein to .protect its * vestiment >)r: its cbmpetitive pbsitioni ;or for .ordinary purpbses of its busi-. riess. iProceedings based bn' a vibla- tion bf this' subdivision; (5) shall he only by £\pplicatibri to the. Court for injunctive relief . against; the con- senting; defendaint complained against, which shall be liinited ; to restrain- ing the acquisition, or ordering the divestiture.: of the theatres or in- terests therein, if any. about tp; be acquired, or acquiredi in violation bf this Section. or defendants to • said provisions of such other decree and entitle it or them; tP the benefits of any ; terjms thereof providing for the . suspen- sion, modificatibn or vacation pf said provisions, and relieve it: or them from, further compliance. ■ with the prbvisions of subdivision (a) ;0f Sec-, tibn ly; of this.decree.;, ;: (e) :If, prior tb JUne 1, 1942-(1) a decree .containing the provisions re^ ferred to in subdivision (c) hereof, or (2) a diecree: cPntaining the pro- visions; referred to in subdiyisiph (dX herebf, or (3) a.; decree containing the provisions referred ta in both pf said; subdivisions, ; shall have ,.been ehtered;'. agaiiist; the:■ .; defehdahts United Artists Corp;; Universal Cprpi and . dolunibia Pictures Corp., but ah perSbns not selling ; exclusively in accordance with isaid prpvisibns of said Sections, or of either of them,«w compliance by the; applicant defehd- aht with such proyisions of said Sec- tiphs; br of either of; them, has sub- stantially and adviersely affected the applicant defendant's business.;:, ^V;; ::'■• ■::■;-■' ;:'v:;-XIIIv'^r-;,'.X:vV-.;.,:: Decree ^I>plies Oitly .. Nothing cbhtaihed; in this decree shall apply to' operations or activities of any ; consenting .jdefendant but- side , of the . continerital United StatesSi or tb pperatibns-or activities the date of the decree and owhs at the time, of such license, directly Of. indirectly,' by stock ownership or otherwise, a flriincial interest pf hPt less than 50 per cent., • \ ■•';; :;■■ ;',.-xviti: Gpy't May InteiT Employes, See. fiook^ : Fpr the purpose of securing eoin-^ . pliance with this deer arid ^for no other piifposey duly authbrized rep-, resentati.ves. of the Departme.nt. of Justice-'shall, , oh the written xequest of the Attorney -General br .-the: :As^ .sistant Attorney Genbrgl in charge ; ;of, anti-trust, rhatt.erS, arid bn; riotice' to any cbrisentirig; defendahts,; rea^ . appeal therefrofh has- been taken; or [ 9*. ^^^;;Conseirt^ a-cl subject mati any of said; prbyisions have riot be- i i^;^^ilf defendant at its cbm'e..operatiye arid of full ibirce and effect, ;theri the operation of the- prp- vjsipns dealing with, the -same sub- ject:;m<itter contained in , Section . III or subdivisibri (a) ;bf Sectibn ly of; this, decree shall ; be suspended .;arid : shall; be ,of np 'biriding force and eiir feet upon apy cbnssntiri't defcnchnt; except: with respect to licerises . en- tered into prior tb Sspt ;i, 1S42, fpr the exhibitibri of features rcle;^sed prior tP said date aind .subsequerit to Aug. 31, ;;1941, ;unless arid- until', such • Nothing cbntained ■ in, :.this ;• decre Ehali be construed, to limit or af- fect the right, of any . distribUtbr .de- fendant, prior . tath6. general :ir^lcase pf a, motion picture, ■ to-srpad 'show sudh picture' or 'tb; license or other-, W ise arrange fbr the road. showiiig32. dbcree shall become final; and such" i rV^,;?h'^ Xt^T'Vh^ S provisions shall be iri^ full 'fprce and tSJ Effect against the defendants United conditions as may be fixed by the Artists Goi-p., Univbrsal; Corp. arid Cblurribia Pictures, Corp.' After such decree shall have; becpme final, any consenting, defendant. riiay^ at .any time exercise its right,, of election provided fbr in subdivisibns :(c) and" (d); of this Section, ' ,..'•■■• ■".•■',; ;Con,;ress.Cah' Nix Decree, (f) If, at any timie,: ain Act of Cph distributor. ./XV.' The provisibris of this; decree shall not apply to ariy frarichiSe" ■which was signed prior .to June; 6, 1940; or to any license entered into'pursuant to such franchise, except..that Secr; —. , . tiori. vm "iie'reof Shall apply tp . all gresS' or a: rule or regulation; made IsUch. frarichisbsVarid siich licenses be- piirsUant tb an Act of Congress;shall.ftween. parties bound by this debiree requii-e' the trade showing; of fear othsr than licenses referred -to iri; tures before licensing the; skme. for section Xyil herebf, exhibitipn, .each . of the. consenting ■ ^(HU cdnsideririg this, factor in situd- ^9^? where the exhibitor customarily exhtbita ieatttrJBs irv tiuo orimqrc thea- tres ori the same ruri in the same tltua- tto7i as a unit by contracting fof.grouvsi 9J features on art :"or" basis; li.c ior exhibition at one: of two or more ^pecv Traideshow Clause Oiit IJitless IJA; tJ, Col Sign (a) It prior to June 1, 1942,; a. decree shall riot have ibeen entered against the defendants United Art- ists Cbrp.. Universal Corp. and; Co- lumbia Pictures Corp., ; reciUirihg each of them-to trade show its Iba- ture.s befbre licensing the same lor exhibition, Sectioa III of this de- eree; after said, date, shall be inbp- erative; and of no biiidirig. force , and eftect. upbri ,the consenting: de- feridarits, or any pt them, except ■with respect;;' to, 1 icbnses entered into pribr to September 1, ;i942,' lor the exhibitipri of features released prior to such date and .subsequent to Aug; 31, 1941. '• ■ ■■ ■ .• (b) If. prior to June 1, 1942, a decree shall; not have been entered against the defendants United Art- ists Corp., Universal Corp.; and ;Ca- lumbia Pictures Corp., limiting the number of features which may be licensed in a single group, subdi- vision (a) of Section IV of this de- cree, after said, date, shall be inop- erative arid of no/binding force and effect upon the cohsenting de- fendants, or any of them, except with respect to licenses entered into prior to September 1, 1942, for the exhibitibn of features released prior to such date and subsequent to Au gust 31. 1941. (c) If, prior to June 1,1942, a de cree shall have been entered against the defendants United Artists Corp., Universal Corp. and Columbia Pic- tures Cbrp.. containing provisions requiring each of them to trade show its features before licensing the. same for exhibition,; any con- seriting defendant' may at any time thereafter file herein a written; no tice of its election to be relieved fronri further. compliance with Sec- tion III of this decree and tp com- ply with said provisions of such de- cree agairist said defendants United Artists Corp.. Universal Corp. and Columbia Pictures Corp., and there- upon an order or supplemental de- cree shall be entered herein on the application bf the defendant ;or de- fendants so electing which shall sub- ject said defendant or defendants to such provisions of such other decree and entitle it or them to the bene- fits of any terms thereof providing, for the suspension; modificatiPri.. or vacation of said provisions, arid re- lieve it or them from further com- pliance with the provisions of Sec- tion III-,pf. this decree. •; . ." : ;.' Equ»i;Terins;fbr^Aii ;■;.■..;,./;../; . (d) If. prior tb Jurie l, 1942, a de- cree shall have . been , entered against the defendants United Art- ists Corp.. Universal Corp. arid: cp- lumbia Pictures; CPrp. containing, provisibns limiting the number of features which, may . be licensed in defendants shin be; relieved frpm; further cornplianCe witti .Section III; of .tiiis; decree, and if; at. any time, an Act of Congress' a rule or regulation made pursuant to an. Act of ebngress shall limit ; the nuniber of features that may be;licensed in a single giroup, each of the consent- ing defendants shall be - relieved from further compliance with sub- division, (a) of Sectibn IV of this decree. In either of sUch events any consenting defendant may at ariy time make application to this. Court, of which riotice shall be served uppn Petitioner and all other consenting defendants, for an order relieving the consenting defendants,, and each of them, from further cpmpliarice with Section III or subdivision (a) of Sectibn ly of this decree, or both, as the case, may be, and vacating the same, and thereupon this Court shall make and enter sUCh an order. V (g) At any time after September 1, 1943, any consenting; defendant may inove to vacate the then effec- tive provisions; of -Section III and subdivision; (a) of Sectibn IV of this decree by filing an;application under bath stating that during any con- secutive twelve-mbnths period pre- ceding the filing of such api>lication either (1) distributors of motion picture films have licensed 25% or more of the features released for ex- hibition in the United States other- wise than In accordance with the thenireffective : provisions of Section III ; and subdivision (a) of Sectibn ly: of this, decree^ or (2) 12%% or more of the total gross income from licenses for the exhibitipn of motion pictures in the United States, ex- cluding the groSs income of states rights exchanges, has been derived from pictures licensed otherwise than in accordance with the then effective provisions of Section III, and subdivision (a) of Section IV of this decree.2? . ; ,* ; ; Dbtribs' Coart Relief Petitioner and all other consent ing defendants shall be served with notice of the filirig of such; applica- tion Upon such application the Court so lar .as they relate to the distribu- i principal office, and subject tp; any tion.,or exhibition of motion pictures : legally reco:r?ni2ed privilege/'(D. be . putside of the. continental Unaed .-pgrj^itted reasbnable. access, during.:;., btates; .; .\ the office hours of such • defendamt, to all . bo oks, ledgers, accounts, cor- . rc.-;pcndence, memoranda. arid other records-and dPdurtients in the pos- session of Under; the cbntrpl .bf such . defendant; rbla'dri.? -tb ;;any of the .matters contained in this decree; arid (2) siibject to the reasonable con-. ; venience of such defendant,' and; without restraint or interference ' frbrh it; be pefmitted to .interview its officers br employees regarding : any such matters, at which iritefview counsel; fbr the ;pfflcei or employee interviewed and 'counsel for' the conipany may ; bp present. Without in ;, any Way limiting the rights granted in the foregoirig provisions of 'this section each of the distribu- tor defendants shall keep at its prin- ; cipal office cuirterit records ..which shall be accessible for the purpose ; aforesaid; showing— ,;; ■ ■ ' Distribs' Records ■; (1) The dates when and the places " where each of its features is trade- shown, the nam. es of the; trade pub- Ucatibn whereiri; notice of each: . trade-showing was published, and the, d^te. : of; puhlicatibn; the name,' and location (,by town and exchange, . district)80 of each theatre in which each feature is licensed foir exhibi- tipn, arid the date, of license thereof; (2) As to each license;entered. iritp by it, the date thereof and the names arid" location (by town and exchange district)3» of ,the. theatres involved, the names of the parties thereto arid of the; distributor's s^lcs representa- tive who negotiated the license, and the names of the features licensed for exhibition; :(3) All ■ arbitration : awards ren- dered: against the distributor with .a , statement shoWing what the distrib- utor has done to coniply therewith. Information obtained pursuant to: the. provisions of this section shall not be divulged by any representa-! - tive- of the Dept of Justice to any person other than a difly author-^ ized representative of the Dept. of Justice except iri the course pf legal proceedings to which the United . States is a party, or as otherwise required by law. ^ v'v ;;;;■ ;,.x:yi.v...■.';.;; . No consenting/ defendant and no officer.' director, agent or einployee of any' such defendant,; shall' be deemed to have.' yiolated. any pro- Vision of this decree if the arbitra- tion V of disputies or' controversies arising relative; to «*he subject mat- ter thereof is herein provided fbr," urileSs such defendant has refused to arbitrate such a disoute br contro- versy in the manrier and under the conditions specified in this decree and in the Rules of Arbitration and Appeals which are filed herewith, as amended from, time to time, or has failed or refused to.. abide by and perform the final awai-d*" made and entered in such an arbitration prb- ceeding. - W^mSlii^ a^^^^ group, any consenting de Zl^i^ footnote. 9 to Section IV\ J J ■ ^oti/icdtion and . report shall :^V^nide sHch commitments and changes w may have been rriade by corporar "ojLs not vartics to this decree which '■ f°"f'"o»ed by Such defendant: they , «niSU also include such comTriitments] ,^ - - •. ^rcJmgcs as may have been made by ] ^^^y,^^, ■ corporations in which such defendant United : Artists fendant may at any time thereafter, file herein' a written notice-Of its election to be relieved froni further compliance with subdivision (a) of Section IV; of this decree and to comply with isaid provisions of such ' said defendants Corp., Universal oiujM a yiuancial interest -hut which, it i.Corp; and CPlumbia Pictures Corp., aocs not control, 1/ such-defendant /ids : and. thereupon an order or sUpple- recetwed knoiDlcdge of such commit- 1 mental decree shall be entered rlVlrl?^ Changes. Eqch defendant vxllt j.herein on the application of the der iteS sach corporations to iiotiy it\ fp^riant or defendants so selecting Distribs' Free Hand In Affiliated Houses . Nothing contained' in this decree shali-.be construed to limit, impair or restrict in amy way whatsoever the right of each, distributpir de- fendant^* to; license the exhibition, or in any way to arrange or provide for the exhibition in such manner, Upon such'terms arid subject to such conditibris as may be satisfa.ctbry to it. of any or air of the mbtion pic- tures, which it may at any tiine. dis- tribute (1) in any theatre in the ownership, lease, management or operation, or in ■ the prpceeds or profits from the management or op- eration of which, it directly or indi- rectly, by stock ownership or other- wise, owns a financial interest*at the time of the entry of this decree and alsb dt the time of such license, and f2) in any theatre iri the owner- ship, lease, management or opera- tion, or in the proceeds of. profits from the mapagemerit or operation of which, such distributor defendant acquires after the date of the de- cree and oWns at' the time of such license, directly or Indirectly, by ownership or otherwise. . stock ownership or otherwise, a shall enter an order relieving the i financial interest of; hot less than 50 defendants from further oPmbl.ian ^.s per - centum and - (3) in; ariy theatre with the prpvisions of Section III in thie ownership, lease, management, :and subdivision (a) of Sectibn IV: or operation, or in the proceeds or of this decree, unless within- sixty (60) days after service of Such, ap- pliciation Petitioner shall establish to the satisfaction of the court that during said twelve-months period profits from the management or op eratipri of which, a cbrnpany in which such defendant owned not less than 42 per cent of the common stock at the date of the decwe and at the less, than 12%% . of the tbtal gross , time of such, licenses^, acquires after income from licenises. for the : ex- ' hibitibn bf ; motion- pictures in the United States, excluding the .gross income of states Tights exchanges; had; been derived ; from ' pictures .30 Sec /obtnote 29 to this Section. 3t The Continental United States as ^ .__ used herein means the territory.'lUith- licensed otherwise than in accordr j in the boundaries, of the^/orty-etght ance with the then effective prb- - states and the District of Columbvk visions bf Section III and subdivision , (a) of Sectibn IV of this decree.\ ; ; :(h) At any time ; after Sept 1, 1942, any consenting defendant rhay apply to the Court to vacate the ■ S'i:Rbad showing .is an. exhibition at-a theatre where a majority of the main flpor seats . for each evening perforin^ dnce dre ;reserucd di;id sold at an adviis- sion price of not lesy thart one dollar. 33 For the purposes of this Section ': provisions of Section III and sub-- T^'^f^^w^rf^^ 2t.,;<,.'A» /^s - A* CA>.ti<>«-Tvr'/vf 4v.:iv'r]/> ccertma, under Section X of this decree division (a) of Sectipn lV of this de.^ .^^i award for dam- ,cree, .pr the provisions pf either , of , age., -rtj, .tHercin :p^^ • such sections; .arid;'upon siich appli- i 34 For the purpose of this Section .cation, the Court shall enter an brderi fi> defendant RKO Radio Pictures. Inc., relieving the consenting defendants :pr its, successor,?, ."shall; be deemed to from; further fompliarice With such ! ^2^f;f^"L^-j^^^ |«rpvisipn^:.' ^upon^ .suoh^: m^6mi^^^ ^'V^r^c^^^^'So^^s showing to the satisfaction of the, ,nana£fcm6nt or operation of any tha-p Cpurt that, subsequent to said date dtre which Radio-Kcith-Orpheum Corp., arid by reason bf the cbmpctitibn pf or its successors, dirfectly or indireHly, , j hais; and f2) de/cndant Vitarrraph, Jnc., .■ '-' .. ■ ;:'.; '' ' , [or its succeissdrs,'.shall he'deemed to ■ ' ■■ have the same interest in the owner- 29 Or with corresponding then effec- \ ship. leOse, management or operation tive prpvisibns of a, decree against the • or in. the proceed^ or inrofitx. from the defendantSi United Artists Corp.. U.ni- ■manadainent or bperntiOn of any thea- versal Corp. and .Columbia , Pictures ire which Warner Brothers Pictures, Corpi, referred to in subdivisions (c)y Inc.. or its suece.'isors, directly or indi- and (d) of this Section. .•:':'-. rcctlj/; has, ' . : rl' xi^. ;; Distribs Still May Pick Own Customers .. Except as otherwise expressly' and specifically provided in this decree, • nothing herein shall be cbn.strued to limited the right of any distributor defendant to select its own '■■ custo- mers^, to bargain with them in ac- cordance with law, br to negotiate with or to license • to or to accept. any offer from any exhibitor to license its motion pictures or any number thereof upon Such terms and conditions as it deems advisable; or to its best interests. . . . ..XX.'.- The provisions of Section III, of subdivision (a) of Section IV, bf Section V arid of Section X of this decree shall have application only with respect to. features released in the United States after Aug. 31^ 1941. XXI. ■ .'•;. Petitioner; by its counsel, has. rep- resented tb the court that the pub- lic interest requires that the prpViV. sions of this decree shall operate if or' a trial period of three years from the date of entry hereof. : Petitioner has further represented to the court, and each of the consenting defend- ants has cpnsbnted to the entry of this decree upon thb condition, that petitioner will nbt for a; period of three years after the entry of this decree, either in this action or any other action or proceeding iagainst any such defendant seek either the relief or any thereof prayed in para- graphs (4), (5) arid (6) bf Section yill of the , petition filed herein July 20; 1938, or in paragraphs (5), (6) and (7) of Section VIII of the amended and; supplemental com- plaint filed herein November 14, ; ■ • <Cpritiriubd on. page ^27) Stiln the case of the distributor de- ycndant Twentieth Century-Fox Film Corp., or . its . successors, the defendaiit Natiorial Theatres Corp., or its siic-; cessors, shall 6c deemed to be. sucli a company if said., distributor defendant owned hot. less than 42% of its common stock at the date of the decree and not less than 35«/£, of its common stocli at the time-.of such Itcense, provided not less thart 42^:c of its. .common stdcTc is owned by Twentieth C<fntury-Fox Filin Corp., or its successorsi and by' present or .iuture officers or directors 6f Ra- tional Theatres . Corp.,' br its successors, ' See. footnote 4 of Section lU: