Variety (Sep 1941)

Wednesday, September 8, 1941 P^b^tki'fY PICTUBES 7 NEW SEASON SELLING SLOW ■ f ♦ 15% Tax Idea Stuns Show Biz Tax committee of the Senate, which is doping out the $4,000,000,000 new taxation bill, delivered a haymaker to the solar plexus of the film business when it voted to put a 1B% tax on amusement admissions at the tagend of last week, according to opinion In the trade. It Is fig- ured as a $217,000,000 tilt in theatre ticket taxation, and one that Is figured to add another $25,000,000 nick on the distributors since it is estimated that would be carrying the freight on a percentage of all boxoflice dollars collected. This tax committee intends reporting this 15% tax on the floor of the Senate today (Wednesday) where it has to be voted by senators be- fore it can go to a conference committee of the House- and Senate. Chief hope of the industry is that House representatives on this com- mittee will stand by their guns and insist that the House's original 10% levy be restored. At least the film business feels it will receive more just representation from the House leaders. Thing about the surprise 15% tilt that nettles industry leaders is that it was taken up unannounced in a committee executive session, with the film business given no chance to be heard or even state its side of the question. Some are inclined to feel that because film busi- ness representatives forestalled asking too much leeway on the orig- inal 10% proposal as a patriotic duty, the Congress has taken the idea Vaa\ the picture industry is a pushover for heaping on added taxes. I Tax Load on All Amusement Patrons WiD Be Jmnped Over 100% by New Tap Exhibs Squawking (But Not Too Loud) at Fast Gearances Given Army Gamp llieatres by Distribs Again Postpone Trial Of Bioff and Browne Trial of William BiofT and George E. Browne, respectively Hollywood representative and president of Inter- national Alliance of Theatrical Stage Employees, Inc., by the Government, on charges of extorting $550,000 from four major film companies, was post- poned to Sept. 15 yesterday (Tues- day) in N. Y. federal court. Mathias F. Correa, U. S. prosecutor, told Judge John Bright that even on that date he was not certain of the trial because of lack of a judge. Bioff and Browne are accused of having extorted the money from Warner Bros., Paramount, Loew's and 20th Century-Fox, under threats of calling a strike in the union. MINNESOTA (PAR)-U STALLED ON PROD. DEAL Minneapolis, Sept. 2. Because they can't agree oh terms and conditions, Minnesota Amus. Co. (Paramount circuit) and Universal have been unable to make a 1941-42 deal. With the distributor demand- ing much stifter terms than ever be- fore, negotiations conducted by E. T. Gomersall and Manie Gottleib, west- ern sales and district manager, re- spectively, for Universal, and John J. Friedl, Minnesota Amus, president, got the parties nowhere and ended in a stalemate. They were reported so far apart that further dickering was regarded as useless. One of the principal reasons why no agreement could be reached was because the Minnesota Amus. in some cases has not played its Uni- versal first-runs In the Twin Cities for more than 100 days after their national release dates. McBrlde'a U Deal Spokane, Sept. 2. H. C. McBride, manager of the Granada, has signed a three-year contract with Universal for entire output. He opens with new policy of a first run, single feature on Sept. 19. McBride is a former publicity and exploitation man for the western division of Universal, and opened the State for them prior to its pur- chase by Evergreen interests. The new policy makes it the only in- dependent first run house, and the only single feature house here. PhiUy UMPTO Suing 20th. Par, RKO for Failure to Deliver Pix Exhibs throughout the country ara squawking—most of them under their breaths—at the agreement entered into by the distributors with the War Department Morale Bran(;h last week whereby clearance pre- viously demanded before pictures played Army camps Is abolished. Both the War Department and dis- tributors are counting on fear of public opinion by the exhibs to keep them from making their howls too vocal. Even with the new agreement. It is understood, several of the majors —primarily Paramount—have made reservations in certain territories in deference to the exhib demands. Paramount affiliates, particularly E. V. Richards-Saenger in the south, are said to have put up the strong- est battle against the loss of pro- tection. War Dept. has been bitter about the Saenger attitude from the start, it has been learned. War Dept.'s end of the confabs, which had been going on with dis- trib reps for several months, was sending out notice to theatre officer* that no civilian is to be permitted In an Army theatre. Although Army has always attempted to discourage civilian attendance, this new order definitely eliminates everyone but soldiers, officers and their wives and children as officially listed.. Quick Showings Distribs agree to provide pictures to the Army at the time they play first run in the territory. In prac- tice this is expected to mean that War Dept. theatres will get_fllm« four or five days after their first- run openings. Major companies have always ex- pressed themselves as In favor of more rapid clearance than the 30 to 90 days—and In a few cases as much as six months—demanded by exhibs. Being more dependent on their commercial accounts than the Army, of course, they always bowed to the former's demands. Squawk by draftees, however, has been so great about the age of pix that dis- tribs felt it was not In the interest fit good public relations—aside from 3l break for the soldiers—to let the exhibs force them to delay pictures any longer. Another factor, which may have led to stronger stand by the Army with the distribs andpas a result, by the distribs with their exhibitor ac- counts, was a recent changeover from fiat rental to percentage deals. All pix are now playing on percent- age instead of all on fiat rental, as before. That's understood to mean a very substantial take for the dis- tribs, with the result that the Army felt it was entitled to a better break. PREVIEW BAN MODIFIED Washington, Sept. 2. Tax load on the patrons of motion pictures, legit, dancehalls and other commercial entertainment will be jumped over 100% if Congress fol- lows the recommendations of Senate Finance Committee which has rapped show business hard in frantic moves to ■ increase Federal revenues by around $4,000,000,000. The emerg- ency tax bill comes up in the Senate tomorrow (Wednesday) carrying a greatly intensified levy on admis- sions. Without advance warning, the Bolohs Wednesday (27) decided to wipe out all exemptions, except for kids and men in uniform, and to hike the long-established 10% rate. Breath-taking addition In the tax burden on amusements was necessi- tated by elimination of several items approved by the House along with the House's refusal to require mar- ried couples to make joint income returns. Chances of killing the recom- mended rate jump to 15% are not encouraging, .despite the failure of the Finance Committee to. take tes- timony concerning the possible ef- fect of such a heavy additional bite on turnstile volume. The Senate Is disposed to trail along with the committee, and the time to organ- ize a fight is so inauspicious that the best hope is to put heat on members of the House with the idea of get- ting conferees from the lower cham- ber to balk when secret huddles take place In efforts to reconcile dif- ferences between the two versions of the bill. House Ways and Means crowd, however, may he hard to sway, because they are in a spot of having to agree to a hodge-podge of additional levies which will fill the hole resulting from death of the $300,000,000 mandatory joint return clause. Outsmarted Show Biz By taking final action Friday (29), with the bulk of the Senate out of town over the Labor Day weekend, and the House almost entirely ab- sent until the middle of the month, the Senate Financers outsmarted the show business. They adamantly re- fused to reopen hearings to take up the last-minute ideas for swelling the take from the bill, heading off any industry move to make a record with protests that the patrons will resent the additional 5% tap to the extent that ticket sales will decline and the Treasury's slice may fall far short of experts' guesses. The ex- perts themselves had a hard job ar- .riving at any likely figure. Furfher study of the effect of the contemplated higher levy led Sen- ate experts Friday (29) to revise their estimates of yield. While the Senate Committee action initially was exoected to bring in another $72,500,000—making the aggregate boost over current yield $132,500,000 —second thought was the take would be swelled only $37,800,000. Treas- ury estimates of the over-all in-' crease In admissions tax yield under (Continued on page 12) 4 Matty Fox in N.Y. Again Matty Fox, after 10 days on the Coast, returned to New York over the weekend to resume control of Universal's homeoffice affairs. He was west to attend celebration of Nate Blumberg's wedding annl a week ago Sunday. No date has been set yet for the annual switch in which Fox goes to the Coast for the winter, while Blumberg returns east to take charge at the h.o. Shift is expected shortly, with Blumberg returning to the studio at the end of December. MINIMUM 40-55c SCALE FOR m YORK' Having completed a series of try- out engagements at various box of- fice scales for 'Sergeant York,' it was announced yesterday by Grad Sears, in charge of Warner distribution, that the film would start in distribu- tion generally with minimum prices of 55c, eves., and 40c, mats. Contract terms with theatres, Sears said, would be 50-50, without guarantee, and Warners will share in advertis- ing above the usual house budgets. Sears said he discussed sales prob- lems on his trip to the Coast and found nothing in the new situation created by the consent decree to change his earlier announced policy of selling Warner product individu- ally this season, and not in groups of five or fewer pictures. He was convinced that the new sales require- ments made it more advantageous for producers to expand the number of larger budget pictures. The num- ber of releases by Warners this year, he said, depended entirely on the figure the studio was able to pro- duce, consistent with market pos- sibilities. Don't Libel the Petrol Cowboys, Hackmen Beef Minneapolis, Sept. 2. Local union of taxicab drivers has written film producing companies in Hollywood requesting them hence- forth not to portray cab drivers as 'rough, uncouth, unscrupulous in- dividuals who drive without regard for life and limb of their passen- gers.' Pictures have been putting them in a bad light with the public and hurting their business, the taxi- cab writers claim. Most of the local drivers are men with families, interested In doing a good job for themselves and their companies and are regarded as solid, substantial citizens, it's pointed out. N. Y. taxi association did like- wise incidentally; it's part of a na- tional drive. APPLIES TO ALL eiJORDISTIUBS Consent - Decree Companies Find That They're in No Panic to Sign Up for 1941- 42 Product — Ditto the Other 3 Non-Decree Firms WAIT TO PILE UP PIX Although selling of 1941-42 prod- uct officially got under way this week under terms of the Consent Decree, and a number of circuit af- filiate deals are set, the vast bulk of selling on the initial group of de- cree productions remains to be ac- complished. Pretty much the same situation prevails with the three major non-decree distributors and some of the indie distributors which began their new selling season a couple of months ago, several pri- vately admitting their keen disap- pointment over 1941-42 deals to date. While business is good with most of these distribs, it is not measuring up to earlier expectations. Actually the selling season is re- ported as being far behind last year which also was regarded as unusu- ally laggard. While distributors have had their salesmen around calling on custmcrs, the exhibitors are not buying just now. The sales resistance accordingly, so far this fall, is reported double that of 1940. Mainly it can be attributed to the Consent Decree alignment and the fact that many exhibs are not will- ing to be rushed into new pacts even for the first groups of pictures. Some deals have been made with outstanding circuits, both inde- pendent and producer-owned, be- cause of intensified activity on the selling front during August. But the total number of accounts set for Initial groups of films is extremely small. Have Enough For A While Aside from the fact that ex- hibitors are feeling their way slow- ly on buying under the decree, the basic reason for failure to go for initial picture groups is that many theatres, particularly subsequent runs, have enough product to run (Continued on page 12) 20tb Confabs C. D. Sales Hollywood, Sept. 2. Herman Wobber planed here from San Francisco today to begin con- ferences at 20th-Fox with Joe Schenck, Darryl Zanuck and other production executives. Wobber will report on the com- pany's first month's operation under the consent decree. Philadelphia, Sept. 2. The United Motion Picture Thea- tre Owners of Eastern Pennsylvania, Southern New Jersey and Delaware, will file suit soon in U. S. district court against 20th-Fox, RKO and Paramount, charging breach of con- tract for alleged failure to deliver product promised on Its 1940-41 schedule. Pictures cited by UMPTO officials . as having been promised under last year's contract are 'Sun Valley Serenade,' 'Belle Starr,' and 'How Green Was My Valley.' The suit against RKO is based on the non-delivery of 'Citizen Kane' under the terms of the '40-41 termer, and Paramount is accused of holding back with Bob Hope's 'Nothing But The Truth." The suits were announced by George P. Aarons, UMPTO counsel. He said he would file three separate actions. All exhibitor units in other territories are being canvassed to take part in the suit and exhibs were urged not to make any con- tracts on these pictures. Four years ago UMPTO called a buying strike among its members against Par, when the latter was also accused of failing to deliver product allegedly due on the 1936- 37 schedule. The strike lasted for several months and resulted in a suit being filed by Paramount in which the exhibs found themselves charged with attempted violation of the Federal anti-trust laws. UMPTO, at a meeting at the Belle- vue-Stratford Hotel last Wednesday (27) voted to declare the post of chairman of the board vacant. Lewen Pizor, president, was elected to assume the duties ot< the chair- man until the next election in Janu- ary. Selepted List of Scribes to Be In- ' vited—Honor System Invoked Hollywood, Sept. 2. The Producers Association has ■ agreed again to permit general press previews, as a matter of courtesy, ahead of release date on pictures, by a margin sufficient to enable cor- respondents and reviewers to meet deadlines. List of those to whom invitations will go, however, has been pared down to around 100 working newspaper folk. General previews, aside from the trade press which sees films by different ar- rangement under provisions of the consent decree, will be held either in sludios- OF in out-of-bounds ther atres. The honor system will be applied to these privileged press previewers. Every invitation will carry a re- minder from the Studio Publicity Directors Committee that corre- spondents are not to print notices or comment prior to the date of na- tional release, and local newspapers are not to run notices until the date of local showing.