Variety (May 1941)

Wednesday, May 7, 1941 PICTURES WB'S NEW SALES HOW PK WRITERS ERRED Rank-and-file membership in the Screen Writers' Guild is growing impatient with the interminable, long drawn out and constantly postponed negotiations with the film studios for adoption of a contract covering scenarists' working conditions. There is talk of a 'strike-vote' among Guild members, many of whom have expressed greater dissatisfaction with their own le^idcrship than with the producers' group. From Hollywood also comes the report that the scriveners are investigating the functioning of distribution and exhibition to ascertain why they are not getting the gratis advertising and publicitv that they believe their efforts entitle them to. There is current among them the apprehension that film directors are taking too many bows for the finer creative points, to which the writers alone are entitled. - Any parallel between the two dilemmas may appear some- what remote on the surface of things, but actually there is defi- nite relationship. Screen writers several years ago were regarded throughout the industry as important contributors to the ever-growing art of motion picture production. Among them were many who appreciated the showmanship necessity of keeping their talents and their accomplishments sufficiently before the trade as to merit recognition for their individual efforts. Names of a few possessed boxoffice value. The scenarist occupied a pivotal cog in the production machinery. His importance is no less today, but much less appreciated, chiefly through circumstan'ces' of his own making. Screen Writers' Guild several years ago adopted a resolution con- demning self-exploitation by its members on the theory that such practices were 'undignified.' That was the night P. T. Barnum turned over in his grave. If screen writers now are faced with studio procrastination, as they claim, they have only to look into the management and rules of their own Guild to find out the reasons. Having placed no importance on the value of self-6xploita- tion, there is no reason for them to look elsewhere for en- oomiums. In show business no one ever was acclaimed greater than his own estimate of his own importance. Neither talent, nor a light, can shine when covered by a bushel. Both Broadway and Vine street arc thickly populated with showfolk, out of work, who boast wonderful scrapbooks of press clippings. The men and women who always are on the payrolls, m good times and bad, insure their careers with unceasing exploitation of their own origination. They never have to knock at doors. The wickets swing when they approach. i 7 SELL IN BLOGKS-OF-li Grad Sears Favors Flexibility in Selling Under Decree— May Market Majority of Product Singly — Giv- ing Exchanges Local Aiitonomy ADDING EXECS AT H.O. By ROY CHARTIER Making the observatio/i that the whole industry seems to be thinking only in terms of groups-of-flve, un- der the consent decree, Grad Sears, in charge of distribution for War- ner Bros., states that he is consid- ering a selling policy that will be very flexible and, in eftect, place virtually every Warner picture on its own. Instead of spotting all the Warner product into' packages-of-flve, Sears is planning to sell certain films singly. In fact, he may sell the ma- jority of the 'A' features that way rather than make up blocks of one top feature and four others of lesser importance. While exhibitors have expressed considerable concern over the decree provisions for blocks-o'f- (Continued on page 22) U May Consummate In Long-Term Loans This Week Pending deal whereby Universal would obtain approximately $5,000,000 in long-term loans may be finished this week on the return of J. Cheever Cowdin, chairman of the board, from the Coast. About half of this sum already is covered by present loans which may be switched into longer-term obligations, but $2,500,000 to $3,000,000 would be used to supplant the present revolving bank credit, rated a short-term proposition. If much in excess of $5,000,000 is borrowed, it most likely would be employed in some new proposition calling for bringing in additional 8% preferred shares. This plan has been denied as likely to operate under present conditions, but a modified withdrawal of more U preferred into the treasury is looked for in some circles. Nate Blumberg, U president, planned to return from Hollywood this week after two weeks on the Coast, checking on the current pro- duction alignment, but was forced to delay his trip because of illness. Cowdin is expected in irom Cali- fornia some time this week. Blum- berg is now expected back May 12. Universal either will set the new long-term loan deal soon or forget about it for a year or longer be- cause borrowings in excess of $1,000,000 loom in the next few months for 1941-42 production. If the long-term deal is not completed, U will take advantage of some $2,750,000 revolving bank credit in getting this production coin. Only about $400,000 of total presently is in use. With seven features on the 1941- 42 program completed this week. Universal is now piling up a backlog of new season films so that nearly half of the program will be ready on Sept. 1 when the new season opens. U now is lining up produc- tion skeds so that at least 16 features for next season's program will be available for release at the start of the new product year. Desire to have this backlog is back of the need for additional coin on production just now. WALKEK JOINS SMALL Hollywood, May 6. Thomas Walker joined Edward 1 Small Productions, succeeding C. W. : Thornton, who shifts over to Hal I Roach as general manager. Walker was treasurer of the Gene Towne-Graham Baker production unit at RKO. CANADA'S 20% NEW WAR TAX Toronto, May 6. ' New war budget regulations slap a heavy 20% tax on the motion pic- ture industry's earnings here, this to be passed on to fllm-goers. Latest nick on theatre receipts (this, in- explicably, not levied on legit houses or concert halls) is expected to see an immediate attendance drop. The new 20% tax is going to have .the greatest effect on picture-goers in the lower income brackets, ac- cording to J. J. Fitzgibbons, v.p. of Famous Players (Canadian), in charge of theatre operations. Faced with additional taxes, Canadians are expected to curteil their spending in some way, he stated, and would pre- sumably cut down their amusement allotment on personal budgets first. Business has been excellent in re- cent months but, as spokesmen for the industry in this country, Fitz- gibbons says, 'we'll feel it; the new tax has come as a terrible surprise and perhaps a 10% tax would hcve been adequate but the war is a seri- ous matter, everyone is willing to do his share, and no one in the Ca- nadian film industry is going to object to doing his part.' Ontario is the only province in the Dominion which does not levy an amusement tcx on theatre admis- sions but, in Quebec for instance, the latest war budget tariff, added to the provincial rakeoff, will up admis- (Continued on page 26) $147M000 to$160M(lU.S.Tax Rise Foreseen By the Picture Biz What with Defense, Etc.; Start at 10c Feet on Ground? Hollywood, May 6. Newest Hays office ukase.de- crees an actor must keep one foot on the ground in love scenes. No explanation, but indicative of general tightening up all along the line. HAYS' ILLNESS STALLS BREEN SUCCESSOR Illness of Will H. Hays, which is keeping him In a Chicago hospital, probably will delay the appoint- ment of a • successor to Joseph I. Breen, as head of the production code administration of the Motion Picture Producers & Distributors Assn. for at least another week. In the meantime, Breen is staying on the job until an appointmient is made, PCA head having promised to re- main for a reasonable length of time awaiting the new official. Choice of Geoffrey Shurlock, pres- ' ent first assistant to Breen, seemed ! more certain during the last seven I days although he had been prom- ' inently mentioned, along with others including Francis L. Harmon, im- mediately after Breen's resignation. The importance of having the PCA function at its peak just now lends additional. credence to the report that Hays will insist on having a man entirely familiar with voluntary self-censorship of screen productions. This points to Shurlock because Har- mon has his hands full as executive assistant to Hays and serving as film business' national defense coordina- tor. No matter who Is chosen, in- terpretation of the industry's film code is bound to differ from Breen's administration excepting on iron- clad definitions such as nudity and obscenity. With new PCA chief executive- still undecided, there has been in- creased talk of tempering the pres- ent film code or removing the teeth from the present setup, particularly from some independent producer- (Contlnued on page 27) • Motion picture industry at present appears certain of having to., pay $67,000,000 additional in special Fed- eral taxes, for national defense. In- cluding excess -profits taxes, other Federal taxation and the $75,000,000 admission tax tap levied last sum- mer, the new tax bill likely will be $147,000,000 and may go as high as $160,000,000 greater than the taxes of a year ago. Federal income and surtax may run as high as 30% and most film companies expect the present excess profits tax to be revised upwards, possibly. double the present rate. In next few months. None of these special taxes take into account state admission tax fees, special state taxes and city levies, with even a guess today being haz- arduous .because so many state leg- islatures .still are in session. It now seems certain that the Fed- eral admission tax of 10% will start at 10c, leaving only admission of 9c or below free of this Federal levy. This drop from 20c to 9c is expected to raise $55,000,000 additional for the Government, with the smaller exhibitors paying the bulk of the additional amount. Based on figures for the first five months in which the U; S. admish tax limit was low- ered to 20c, industry tax experts figure $75,000,000 additional goes to the U. S. treasury because of drop- ping the tax ceiling from 40c to the 20c figure. Developments in the past 10 days indicate that the 5% tax on film rentals, which is expected to cost the industry $12,000,000 additional, what the Government figures this new special levy will raise, will be paid by exhibitors. It has been sug- (Continued on page 26) Jas. Roosevelt Resigns From Coast Producers Hollywood, May 6. Resignation of James Roosevelt from the Motion Picture Producers Assn. was accepted at yesterday's (Mondzy) session. He wrote that his withdrawal was due to foreign service with the U. S. Marine Corps and that his pro- ducing company was inactive. Also that he would resume his member- ship when his company goes into production again. Schaefer Still Struggling With RKO Revamp; Breen s Studio Bid RKO Okays Goldwyn. Elects Robertson; No Action on Meehan Approval of the Samuel Goldwyn producer deal and election of Hu!!h Robertson to the board was the principal business transacted by the RKO directorate at its meeting Thursday (1). Reported that no 'ac- tion was taken on the projected loan. .The extension of the option on Mike Meehan's Keith-Albee-Orpheum pre- ferred shares obviously preclude;' the necessity for the full $8,500,000. [The K-A'O directors did not meet, I (Continued on page 79) Although RKO prexy George J. Schaefer has struggled manfully dur- ing the past week to put his house in order, there is no preceptible evi- dence that the unsettled situation either at the studio or in the the- atre operalinfi department has been cleared up. Step to unravel the Coast snarl was taken last Wednesday (30) in a phone call to _Joseph I. Breen in which Schaefer offered him the i post of studio general manager. This was more than a week after '' reports started around that the RKO • topper was negotiating with the for- : mer head of the Hays office Produc- I tion Code Administration. Schaefer, in New York, otherwise ' spent- the week attempting to con- vince John J. O'Connor, head of the RKO circuit, and Fred Meyers, chief booker, that they had acted in haste in resigning the previous week. I On the financial front, which was I also pending last week. Floyd Odium's Atlas Corp. obtained a 60- day extension of the option it held for acquisition of the Meehan stock interests in K-A-O. This block ob- tained, for the purpose of later turn- ing it over to RKO in a refinancing move by that company, will enable the parent corporation to simplify its setup by eliminating the theatre op- erating subsid. RKO's Unit Idea Hollywood, May B. Post offered Joseph I. Breen by \ RKO head George J. Schaefer would give the former Hays exec entire op- eration of the studio outside of ac- tive production of pictures. It is \ understood that Schaefer has a unit procTuction'/plan in mind as studio ■ policy and will make deals with in- dividual producers. Breen is said to have Schaefer's offer under consideration and will discu.ss it turthc. when the RKO J mahatma arrives on the Coast from ! New York this, week.