Variety (Mar 1941)

Wcaneisday. Murch 5» 1941 raticHis MakeW ,tii) ; for additional losses. In . the foreign ' market : and :« grieatly Impi-oved cash position, by leadlnir ; iaiin companies now are prompitlijg . Wall Street to envteion much^higher ' Earnings for thiB picture ^ i^^^^ - eeaspn^posslbly greiitet- than in the past two yearp. Financial observers are convinced also that film , com- panies have realigned their sales and production setups to.'conform, with the U; s; consent decree. NotV do. they expect rtiodiflcation ol selling policies via the decree to adversely effect incoftie. . ■ •Present strong cohdltion of: vlr^ tually every picturie cpmiiany is held ;the rtiain. reason for this optimism despite the .European ,war and fpread of the conflict. Present In- dication is that the film business as a whole now hais. the strongest cash : positibn in Its history. That In it- .. self should enable , the industry to weather further business shifts. . Along with the reduction oif debt by several companies, niany pro- ducer-distributor;, corporations have trimmed inventories in th6. last eight months. This Is considered by Wall Btreet as a further sign that the pic- ture business. has placed its produc- tion household in order. - It is im- portant, tod,: because flniahcial ex- pei'ts terlned these inventories were at 'outlandishly high levels' prior to 1940. ' Saner Qud^ets Resiime by financial district in rcr cent months has brought the con- viction lhat there will be fewer euper-epics this year, with produc- tion outlay geared more in line with domestic returns. Coupled with this, Wall Streiet believes the profit trend will be helped by the fact that con- traction in ireceipts frorn foreign ac- counts is not liable to be feslt so keenly-as In the past 18. months; ber cause pictures going out at present ere not ihose pirdduced at relatively high budgets as a yeat ago. While figures are not completie for every company covering 1940, ma- jority of larger companies in the past month have revealed their cash 'and inventory pdsitions via fiscal, or latest quarterly statements. , Loew's (Metro) as of Aug. 31, 1940, last compliet'e fiscal year, showed $31,768;173 in'cash and U. S, securities as. compared with only $17,161,812 on Aug. 31, 1939. Com- pany also revealed trimming of In- ventories in yhe with -reduction in Income from the foreign market, listing inventories at $37,607,526, plus advances of $280,803 on. the last Au- gust daitef as against $44,354,138 In August, 1939, plus $1,443,660 ad- vances to outside producers. Warner Bros, reported $8,452,922 cash on hand on Nov. 30 last, close of Its most recently finished fiscal year, ^ compared with $6,909,383 on Nov. 25, 1939. Inventories were about the same on the two dates but are tinderstood to. have beeh reduced materifilly in the last. three inonths. . Ppsltloii Improyied .Uhlversal's cash position also was . Improvedi at the close' of its last fiscal year, Nov. 2, 1940, with net working capital listed: at $6,823,563 oq that date : as against $5*512,194 the pre-: ceding year. Company also re- funded Its: studio niortgage' with a. bank loan at a^^ lower interest rate, thereby paying off the 6% mortgage of $1,000,000. held ■ by Consolidated . Film Industries' and increasing the corporation's workihg capItaL Unir versal also piulled In several thoii- sand shares pf first preferred repre^: sentihg a substantial' savings in an-: nual dividend outlay. Handling of the- loan left U without" anjr ma- turity close at hand other than the company's. current reVolvIng batik ;;credits;- ' ■ r/; •.; ,:\,V ^^ ^KO. which has not made its re- port covering operatlons in 1940, is regarded in /financial circles as be- .ing in its best position In years be- cause on emergence from 77^3 last year the corporation was left with (Continued on: page 62) They're All Wei : 'Hollywdod, March 4. : ^'Unusual miits'- haVe been: iflPodlng ' Sah. iPernarido ' Valley ^ 'for more than a fortnight and still the water bills at Warner's .fot.'.that period are the highest In .the hlstdry ;df the studid. : .Scripts on seven pictures called for an Indoor ocean on the 'Sea Wolf setr a trout stream for- 'Miss Wheelwright discovers. America,' a- waterfront layout for 'The Gentle People^' a-water- fali for ISergeaht, York,' sprinkling system ' for 'Afifec- tlpnately Yours,' a cataract and a pool for .'Shining 'Victory,' and . a" cloudburst for 'Highway . We$t.' With expiration of N. L. Nathan- son'a (Famous .Players-Canadian) contract in June,understanding Is that .Paramount officials have al- ready discussed jnatter ot: renewal, Possibility is reported! that a modi- fled operating deal may' be worked out, though no great changes in cur- rent setup are expected. .'Nathansoh, operating some . 600 houses in .Canada, has a partnership deal With Paramount in, the . Do- minion. Nathansoh also controls sev- eral major exchanges north. of the border. J. J. Fitzgibbons Was . also reported . huddling with Paramount execs last week. Paramount officials will make ho comment.- Nathansoh, who. left New York for Toronto last week after a Miami vacation, \yill likely attend the Paramount convention this month wheh contract terms may again be discussedi Before leaving N. Y. Nathanson denied contract re- newal matter had been taken up, Meantime, name of Paul Nathan- son, son of N. li . has been linked with formation of a new chain of theatres In Canada known ias Odeon Theaters. No corifirmatlon of young Natharison's affillatiPn with new or- ganization has'been made available to date.. ' Plan Odeon Chain Vancouver, B. C., March 4. . Orgarilzatlori .of a hew chain ipf theatres, stretching .across Canada from coast to coast, ^yas announced here by W. J. Long, df Edmdnton, Alta. : The group Avill be called the Ddeoh .Theatres of Canada, Ltd. . iiong has been named supervisor for British Cdlumbia and associated with him In the organization of th6 chain In. this province Is Howard Bodthe; long an Independent theatre owner in Vancouver. chain hais gained contrdl of four in- Vancouver, the new Vogue, Plaza, Paradise and Dunbar, and plans to acquire, theatre sites .in every City arid to'wn iri British Columbia. . Contrdlled etit'ii*ely by. Cariadlan interests and financed by Cainadiaii and British capital, Odedn ia:npt af- Aliated with arij^ ;other; qhaln In Cahada or the .U.Si ; Rubiil*8 Coast Trip - ij.'Robert Rubin left last week for a vacation which will Include a visit to Metro's Coast plant. ■ MtG v.p, arid Counsel will spierid most of the time awiiy from; the hdme office at' La Quirita, near Pailni Springs. Cai; ' He'll be gdne. about threi?^ weeks, • B^t^er DUtributing T e r m s One Lure to Attract Top- flight FiItn«Makers —^ Also |Financing---Bergia8: Bros..| From Berlinv Still Want to b With UA PRESSBUkG|R THE 1ST Two radical changes In the Unltied Artistsr plan of operation, ; Jn order to strengthen, the company, weire put- lined by chieftain ^iurray SilvWr- stone yesterday _ (Tuesday). .Both plans are designed to attract tbp- notch producers to the Company via lowered distributing costs and fi- nancing by: the releasing company, Siiyerstpne also revealed that Arnold Pressburger, ■ former ; .cdn- tlnerital producer, has. joined . the company's producing irariks. . • The two .plans Will be ready fot complete public unfolding In about a month, he said. . Silverstdne re- turned from 'the. Coast Moridiay: (3) with all the preliminaries,..; expects to Wotk: put further d.etails during two or three weeks In Manhattan, and will be ready to make full; an- nouncement of the setup when he leaves again for the Coast at that time; Changes In distributing charges will give Indie producers of 'quality pictures' the 'lowest costs In the his- tory of UA or any other: company,' Sllverstone said. New method be^ Ing lyprked out is a revision of the Sllverstone Plan of bonus payments to producers wh'oSe pictures' reach certain grosses. Final nayoff on the Sllverstone Plan for 1940—the last year the three-year plan aDplled— (Continued on page 60)' Hays' New Contract May Be Acted Upon By Execs on Coast Hollywood, March 4. Meeting of Hays office directors to go oyeir terms of new contract for Win Hays likely will be held, here this week but actual date is not set so far. Fact that Hays Is In Cali- fornia recuijerating froiri his recent siege of. flu and that a majority of Motion Picture Producers & Dis- tributors Assn. directors currently are on the Coast is reason for inten- tion tp have a dlrectdrlal sessldn here. • Hays' present five-year pact ex- pires this month and action on new pact Jias been scheduled for spme time to come up at this next direc- tors'session. ; Hays Is not due back In New York from the Coast for 10 days or two weeks. Wants to arrive In the east In time to whip his annual report of the MPPDA in shape for the annual meeting scheduled for March 31, SHERWOOD SET FOR 3 MORE With COL Three-picture deal with Columbia has virtually been set'by producer Robert C Sherwood. He has :been In New York confabbing with home office toppefs on It for the past two weeics, arid most of details were Ironed: oiit in a series of huddles last week. • : ;'' ■ ' : Sherwodd recently completed ?Adam Had Four Sons,' his first ;pr6- ductlorii which is awaltlrig. release. It was made for Gpl on^ a dnerplc deal, the producer prdvidlng all pf his own financing. New-pact calls for, the studio to. share in thie..;,backing of '■iture films; tieiail yet to be worked dut Is the , ime liriilt dn the. trio;Pf pix,; Sher- wood, it Is UnderstOPd- wants 18 months , Washington, March. 4. ; . With the total iJayroir jumping 4% in two years, 'the prodUc^^ the flliri industry staged' a;. breadth • taking, comeback :botween^:l^ 1939; acPrdlrig ;td- preiiminary^^ - turns . from last, year's . censiw;* of manufacturers. Just relieased by the U.S. Coniriterca Dept, and as a re- sult the dpUar volUnie of output mpunted 9.1% to a level of $215,- 664,929. • The • number of ;estabUshrilents doubled during the twb-yeat period and the 1939 tally of 178 was 49 more than In 1939, when the real re- trenchment set In. : Commenting on the lignlflcance of 20th Ceritury-;rox . stockhdlders are due to get back' some coin paid to Uncle Sam in 1937, acCprd- ing to a -letter sent them, by Sid- ney R. Kent, president. Kent's let- ter states that If li937 dividends from 20th-Fox. were Included in grosS in- come for 1937 taxes. It may be pos- sible to secure a refund should it be ultimately determined that some part df the dividends virerc .not tax- able income to the shareholders..:: More important; perhaps than' the money tp be secured, is the; belief that ; ■ ; accordance with certain Treasury Dept. decisioni, the ..case of the Gpverririierit vs. Joseph M. Schenck and Joseph H. Mp'skdwitz, chairman, of tlie board and. eastern representative of 20th-Fox, .respec- tively, may receive ^ a: severe : setr back. . A large, part of the Gov- ernment's case was based on the 1937 earnings, and it may be : that the U> 'S. wUl flnd that . both Schcrick and Moskowltz were \yholly within the laW; In filing re- turns for . that yekr. It is understood that the reasons for the delay of the trial of the suit against the film executives until yesterday (TuesJ was caused by the Government's desire to examine and revise these flgures. Kent's letter discloses that a total of $1,450,024 In preferred or 31ViC a share was paid oUt on the preferred, stock, and $4,304379 or over 50c a share on the cpmmon In 1937, Trial of Schenck arid- Moskowltz' starts today (Wed.) before Judge Grover Moscowitz.'Trial is expected to consume frorii six to eight weeks. Trial was put over by Judge Vlri^. cent L. Lelbell on. Monday. (3) to give Judg.e Mpscpwitx time to flnish .up In BrdoWj^ . The fllm. execu- tlvei: are charged With evasion of In- come tax returns, while both assert any errort art^thpse arising frbrii bookkeeping, Jf they. exist, and riot any; attempt at evasion. JACK WARNER EAST FOR 2 MORE WEEKS jack; L. . Warner will remain in New York about two weeks longer to discuss balanea of this season's product as well AS producing plans for the 1941-42 semester under the consent decree with Grad Sears, Carl Leserman and others. Likely that Sears,. Leserman, Sam Schneider and Mort BlUmenstock win return west with Warner for coast huddles similar to those al- ready held by other companies there and in Chicago. the rilost cdmplete- check "ever made by: Government qiilzzers, Dr. Vergil D.; Read, : acting ' census ■ direcldr, " pointed out that the value of pro- duction now Is; about 23 times that recorded in 1921. Production bud- get for • 1939 Was more than twice ' that in 1925, when the sound era ' was JUst starting arid even . $31 ;060.- ■' 000 more than the boon year. 1929. The degree of recovery, particu- larly In the Hollywodd sector; is most strikingly demonstrated by the payroll: statistics, which also show marked pruning of the high -priced officer and employee brackets . jn ■ ' the 1937-39 span. Total workers employed In the Los Angeles in- dustrial area rose from 23.278 in 1935 to 30;250 In 1939, vl^ith the annual bill for salaries and wages going from $97,913,864 to $130,960,561. (The number of persons engaged was 2.071; greater, but the 1939 pay- roll in the L. A. area was $1,953.- ■ 841 lower), . : '. 91% Over 1937 ".Total cost of; work done in 1939 ($215,664,929) was up 9.1% over the 1937 level, which was 22.2% above : 1935; Wage bill was $45,735,926 which was 23.1% greater than 1937 arid; nearly doubled the 1935 figure. Payments for salaries, amounting td $93,341,137, were down 8.8% below 1937 which in tUrri was' 128.4-% < niore than in 1935. Studio supplies, con- talneirs, fuel, and' energy consumed $43,051,732, a rise of 21.0% as against a 20.4% Inci-ease in . the * preceding two-year period. Employment in the entire produc- tion wing (all sUtes) touched 33.687 in 1939, against 32,398 in 1937 and 27,592. In 1935. Salaried officers and employees were down to 9,iS35, com- pared with 13.060 and 12,675 in the corresponding previous years, but wage-earners rose to 24.052,' as against 19,338 and 14,917. Peak em- ployment In 1939 was 29,915 during June, compared with maximums oif only 21.335 In June 1937 and 11938 In September 1929. Average num- ber of hired hands was more than twice the 1929 figure. • California's 86% California accounted for 86% of the. production, same ratio as In 1^37. Value of product from the Coast state in 1939 was $186,848,971. com- pared with $l71,943,349 1n 1937. San Francisco was tabulated separately in .1939 for the first time, with fl studios employing 13 persons ac- counting for $80,270 of the state val- uatiori figure; New York, trailing In second place, enjoyed a slight pick- up In product value, going from $16,377,532 In 1937 to $18,059,670 . In 1939, but the number of persons en- gaged slumped from 2,883 to 1.845, with both the wage-earners and the salaried groups decllnlnjg.. . , Breakdown by types df production showed a substantial gain In produc- tion of shorts, although nothing com- parable to the rise in features. Trend toward color ; features was . unmistakable, with the investment in; tinted pictures almost twice as great in 1939. With the nuriibisr :irislng from 12 to 27, the production, cost shot up from $8,777,149 to $14,356,442. Black-'and-white production fell even more sharply, from 1.087 to 493, but the cost rose from $112,043,- 405 to $117,850,011. Colored shorts became more sig-. nlflcant, number going from 92 to 125, and cpst from $1,194,093 to $1,723,40.0. The Census Bureau did. not have a similarly complete break- .. down on black-and-white shorts, al- though the report showed the value rose" from $4,024i528 to $4,251,624, Total outlay for shorts was up more than $750,000. . Newsreel production In 1939 repre- ' sented ari experiditure of $4,440,805, with no' comparable flgures avail- able for the prior year, : Industrial • films , . amounted to , more - than $2,100,000, against $855,782. arid educational reels to $725,000 com- pared with' $3i2O.0b0. Total cost Of nori-'ti'":"itriop|., . films . was nearly double, $10,445.057 in 1939 compared with $5,715,977 two years before: