Variety (Dec 1945)

Wednesday, December 5, 1945 PICTURES SMALL ■ SEATERS DOMINATE U. S. Upped Grosses and Reduced Taxes Bulling Almost Every Picture Stock Besides the increase in gross in- f comes, expected to run 5-8% ahead «f a year ago, the end o£ excess pi-otits" taxes on Dec. 31, is held re- sponsible in Wall Street for the sensational rise in film shares on the N. Y. exchanges. Virtually every picture company issue on the Big Board.and-'Curb Exchange-has been soaring to new highs on successive days in the past week. The fact that large cash balances have been built up by film com- panies, their debts reduced and is- sues refunded in many instances, places most picture corporations in a position to boost dividends or re- store common divvy payments next year, in the opinion o£ financial ex- perts. Then, too, many film compa- nies are counted on to be benefited by. higher wages and the generally higher level of U. S. income. This is expected to, partially overcome higher production costs and outlay for theatre construction and re- modeling. Elimination of the heavy excess profits taxes naturally will mean much larger net profits for numerous companies if gross income continues close to current levels. And, after all. film companies as with other corporations, must depend on net operating income as a base from which to draw any stockholder melon cutting, The repeal of excess profits will particularly help such corporations as Universal, Columbia, Republic. Monogram and others having no theatre subsidiaries be- cause wording of the law left such companies in line to pay the Gov- ernment comparatively higher ex- cess profits taxes than theatre-own- ing outfits. Financial circles are now check- ing on how gross revenue has in- creased for film companies over the last two or three years as being the key to what may be expected with the elimination of excess profits taxation. Naturally the corporation with high gross earnings stands the best chance for enhancement in net profits after Dec. 31 next. Loew's, Inc., for example, showed $21,800,000 gross, before federal taxes, in 1942 while $31,500,000 was shown in the fiscal year ended on Aug. 31, 1944, also before taxes, this being the com- pany's most recent report. Twentieth - Fox gross income amounted to $18,000,000, before Fed- eral taxes in 1942, while last year it was $33,400,000. RKO reported $4,500,000 gross be- fore taxes in 1942, while in 1944 it was $12,000,000. Warner Bros, gross before Federal taxation totaled $16,800,000 in the fiscal year ending in 1942 as against $25,200,000 in; fiscal year ending in August, 1844. Paramount hiked its operating (Continued on page 49) Real Horror in 'Stranger' Hollywood, Dec. 4.' International will cash in on the trials of Nazi leaders through the use of iiewsreel shots of German prison camp atrocities in its forth- coming picture. "The Stranger." Footage has been borrowed from RKO newsreels which have never been shown in public because of their shocking nature. Extras' Groups May Merge • Hollywood, Dec. 4. Wat between two groups of film extras is approaching a settlement in a merger of the Screen Players Union and the Screen Extras Guild into a single organization under an American Federation of Labor char- ter , ' Settlement basis, now under nego- tiation, calls for an election to be held under auspices of AAAA, and a tally of voters to determine whether SPU or SEG will be retained as the iiahie for the new union. Pantages, Pine Out Hollywood, Dec. 4. S'Sgt. Lloyd Pantages. after three and a half years it! the army, became a civilian again yesterday. Pantages served 18 months in the South Pacific and since returning here has been entertainment contact for the Santa Barbara redistribution- center, which is closing. Pantages is con- tinuing his entertainment work by providing shows for hospital patients in the California area. Howard Pine, son of Bill Pine (and Thomas), is out of fhe army and will rejoin his father's producing outfit. Young Pine worked with Pine-Thomas before entering service three years ago. . MONROE GREENTHAL GETS UWPUB.-AD POST First appointment in a series Of "top management" executives has' been made by Matty Fox. presi- dent- of the new United World Pic- tures. He's Major Monroe Green- thai, just out of the service, and former United. Artists publicity-ad- vertising director, who assumes a similar post with UW. only that it will also have added executive scope. Greenthal and Fox are due to meet on the Coast the end of this month and, among other thing's, will discuss future production with Bill CoeU - Leo Spitz (International Pictsi worldwide sales, worldwide theatre exhibition, and all the other factors encompassed in their new al- liance with J. Arthur Rank and Universal. C " * Slill another salient will be the future development of personalities for their own company, legit fi- nancing, etc. Fox and Greenthal were intimate- ly thrown together during their wartime service with the War Pro- duction Board when Greenthal, first as a civilian; was drafted to become chief motion picture specialist for WPB and Fox—also then a civilian before enlisting as a private, later becoming a major—was on Donald Nelson's planning board with WPB. Greenthal has been chief of the mo- tion picture branch of tne industrial service division under Asst. War Secretary (then x asst. secretary) Robert Patterson. Universal Especially Benefiting From Taxes Because writeoffs for excess profits tax amounted to nearly as much as net profit in recent years, Universal is expected to show about 80% in- crease in net profit in its next fiscal year. For the first full fiscal year under the new tax law (eliminating excess profits taxation). U's net might reasonably be expected to soar almost -100^. For example, if the net profit for the fiscal year elided in October amounted to $3.- 000.000, the wiping out of $3,000,000 in taxes would enable the company to show close to $6,000,000. Realiza- tion of this is reportedly back of the great increase in price of shares on the N.'Y. Stock exchange along with realization of what the now United World Pictures companies means to Universal. For the fiscal year ending next October, Universal will be benefited by repeal of excess profits tax for a 10--monlh period.. Company pavs 10-12ths in Federal taxes under the new law; and 2-12ths under the old law. which means that it will have to pay under the excess profits setup for two months of the next fiscal year. And. of course, for. the fiscal year ended last October. U will re- receive no benefits whatever from repeal of excess profits tax. SEAT 350 OR LESS An exhaustive survey covering all film theatres in each of the country's 32 exchange territories brings out the startling fact that 35%, or more than one-third of all houses are not larger than 350 in seating capacity. Only 5% seat from 1,501 up. A total of 18,413 theatres, includ- ing a minority that remain closed, are covered }n arriving at the over- all picture on seating capacities as existing today. Of the total number of houses in the United States, 6,507 or 35% of the total are houses ranging up to 350 seats.." There are 4,311 in the bracket running from 351 to 503 seats, representing 23% of the com- plete number, while houses seating 501 to 750 total 2,979 or 16%, Other brackets and percentages arc 751 to 1,000 seats. 2,087 (11%); 1,001 to 1.200 seats, 801 (4%) from .1.201 to 1,500 in, capacity, ,732 (4%) and seaters from 1,501 up, 996 (5%). The region served by the Dallas exchanges has the largest number of theatres, being 1,167. It is in- teresting to note that all but 59 have capacities ranging from 1,000 down. In this territory there are 430 houses accommodating only -up to 350, and 398 between there and 500. Figures on Minneapolis offer an- other intriguing picture. Out of a total of 797 theatres, 484 or better than 60% are in . the 350-seatcr groove. Tops on the smaller houses, howev er, is Omaha, where over 72% of the theatres in tho area have capacities of 350 or less. The Char- lotte territory, which has 329 of the smaller houses out of a total of 616. serves only one that runs over 1,500 seats. The New York territory is tops en larger operations. Having 1,062 theatres, the number in the various brackets are 46 (up to 350); 97 (351 to 500), 293 (501 to 750), 94 (751 to 1,000), 110 (1,001 to 1,200), 132 (1,201 to 1,500) and 290 (1,501 up). Chi- cago territory with 1,084 theatres, third highest among the 32 ex- changes, also has a large number of high-seaters, this also being true of the Boston, Philadelphia, Detroit, Cleveland, Pittsburffh, Los Angeles and San Francisco territories. Smallest exchange of all, being New Haven with only 188 theatres in the area served, has only nine houses up to 350 seats; .47 (351 to 500), 50 (501 to 750), 29 (751 to 1,000). 13 (1,001 to 1.200), 17 (1.201 to 1,500; and 23 (1,501 or more): Borzage Vice Wayne As 'Malone' Producer Hollywood, Dec. 4. ■■ Frank Borzage, who recently fin- ished "I'll Always Love' You" as his first producer-director chore at Re- public, will follow with "That Man Malone," starring John Wayne. Wayne was originally slated to produce as well as star in "Malone.". but his producer efforts will be saved- for a later picture. Dimes Campaign Cues Pix Praise Washington, Dec. 4. Film industry played a double fea- ture in the Washington limelight today (4), completing its plans for the 1946 March of Dimes campaign at the matinees and topping oft in the evening at a dinner in which the war service of pix was lauded by reps of the Government agencies which benefited by the cooperation of Hollywood and the nation's the- atres. The dinner in the main ball room of the Willard hotel was topped oft by the presentation of plaques to representatives of all branches of pix and the trade press, and by laudatory addresses by John J. Sul- livan, Asst. Sec. of the Navy; Gen. Kenneth C. Royall, Asst. Sec. of War; Fred M. Vinson, and Basil O'Connor, Red Cross chairman. Toastmaster was E. Palmer Hoyt. west coast newspaperman, who for- merly headed- the domestic branch of OWI, which was- generously helped during the war by the in- dustry. Hoyt presented the plaques which were received by Joe E. Brown. George Schaefer, Si Fabian, Charles Reagan. Maurice Bergman, Jack Ali- coate and Tom Baily. Dinner, attended by more than 300. brought under the same roof Ihe heads of major companies. Holly- wood and Broadway reps, members (Continued on page 20) State Dept. Concerned on France; Spec on Pix Pickin's; Trade Treaty i Bill Halligan digs into the memorabilia files for "A Footnote on George Raft" .. . in the 40th Anniversary Number Out Soon $50,000 STORY BUY IN * RKO-WALLIS TANGLE .' Hollywood, Dec. 4. Legal battle looms over screen rights to the Gordon McDonnell story, "They Won't Believe Me." In- volved in the literary mixup are Hal Wallis,-. who claims to have an op- tion On the property; RKO, which bought the story for $50,000 a day before Wallis' asserted Option ex- pires, and Frank Vincent, agent who negotiated the deal. Loyd Wright is handling the legal .end for Wallis, and Vincent is represented by Simon & Carbus. John Mock, story chief for Wallis, said: "We were approached by George Landy of the Vincent agency and obtained an option expiring at 3 p.m., Nov. 20. The morning of that-day the agency informed us that the property was sold to RKO the night before. Meanwhile we had mailed a check to the agency for $25,000 a? the first installment against .$50,000.'!. .. X. ■ * ' Milton Garbus, Vincent's attorney, gave a different version, He said: "All Wallis "had was a promise from George Landy that he would hold up the sale of the story until 3 p.m., Nov. 20. At best it was a friendly, cooperative gesture which cannot be construed as a legal option. No legal binding deal was •made, and the agency was within its rights in sell- ing the story to RKO." Par Studio Execs May Not Depart on Friday Henry Ginsberg, Paramount pro- duction chief, and William Meikel- john, company's casting director, are scheduled to leave for Hollywood next Friday (9) following a trade press luncheon tomorrow (Thurs- day>, but may delay their departure until the weekend. Ginsberg and Meikeljohn have been east on production matters, looking for new story properties and talent. L. A. to N. Y. Havelock Allen, Sidney L. Bernstein. Ralph Blum. Louis Calhern. George" Coulouris. Reeves Espy. Charles Garrett. Dorothy Gish. Joseph H. Ha/.en. John Howard. . Nunnally Johnson. . v Carole Landis. Abe Lastfogel. Emmett Lavery. Jose Liceaga. Collette Lyons. Anthony Mann. James K. McGuiness. Llewellyn Miller. Paul Misraki. Eleanore Mitchell. Joe Moskowitz. Herb Moulton. ■ Carmel Myers. Ken Parker. Irving Pichel. Louis Shurr. , Dwight Taylor. Gleen Wallichs. Hal Wallis.. Orson Welles. Washington, Dec. 4. Despite denials from the State Dept. that there is any concern over negotiations with the French on the entry of American pix into that counr try, informed unofficial sources here say the Dept. is considerably con- cerned over the situation. Worry is over the political situa- tion in France, which, of course, af- fects the nation's economic policy. France now has a strongly labor- minded government, which is ex- pected to do everything possible to step up employment opportunities in that country. One source of jobs is to get the French studios working at full speed: which would mean that fewer U. S. pictures would get in. Foremost factor helping Holly- wood is the negotiation of a loan which the French want from the U. S. However, the French negoti- ator, who went home from Wash-' ington some time ago, has not re- turned and is overdue. This may be significant, particularly in view of the fact that films have played an important part in the loan conversa- tions. ■ On the other hand, George Canty, motion picture specialist for the Telecommunications Division of the State Dept.; has denied that he has received any information about the; Paris, reports that the French were getting ready to denounce the 1936 trade treaty, which included pro- visions for the export of films from this country, Canty says there has been no word on this irom the American Embassy in'Paris. He in- sists that the new deal will go through although there has been little progress of late. . Beji. Patterson Raps British Incidentally. Rep. Ellis E. Patter- son (D., Calif.) declared in the House last Wednesday (28) that he will refuse to vote for any loans to Britain if a ban is placed on Ameri- can films there. Patterson referred to an article in Daily Variety re- garding proposed crackdowns on U. S. features in the British Empire market. "I ani amazed at this short-sighted view on the part of our wartime partner and ally," he said. "It is my feeling that the attitude of the British motion picture industry and its press be admonished by this' house, which will have to raise the revenue and authorize the loans re- quested. . I could not put my stamp of approval on a loan to be made if the recipient were to deny us the right to trade with her nation. "I hope that the present policy reflecting such thought by the Brit- ish motion, picture industry will be rescinded, and that all trade between our two nations will again become peaceful and harmonious." Patterson represents the Beverly Hills district of Los Angeles. Reagan Hits'Road' Hollywood. Dec. 4. Ronald Reagan, recently dis- charged from the Army, draws the male lead in "Stallion Road" at War- ners, a role turned down by Hum- phrey. Bogart. Instead. Bogart gets the title role in the Albert Arnold production, "The Dealer's Name Was George." N. Y. to L A. Joseph Bernhard. Julian Blaustein. John van Druten. Sam Gold wyn. James R. Grainger. Walter Gould. Edward EvereU Horton. John Joseph. Oscar Levant. Al Lowe. Irwin Margolies. Louis B. Mayer. James A, Mulvey. Ken Murray. Vic Orsatti. Robert E. Sherwood. Howard Strickling. Sailing* (London to K. Y.) Alan Collins.