Variety (Jul 1946)

Wednesday, July 17, 1946 PICTURES WARMUP FOR HOT DECREE BOUT With Exhibs Free to Buy Quality Kx, Unprecedented Boom for Indies Seen Indie producers are expected to" be especially benefited by the auc- tion bidding system of selling pic- tures if that proviso goes through in the final decree in the anti-trust suit System is expected to build a terrific demand for indie produc- tions and to preclude the necessity for several of the larger indies, who've contemplated setting up their own distributing system, from tak- ing that step.. Exhibs. under the competitive bid- ding system, won't be tied down via contracts to taking product of two or three of the majors, since each picture will have to be thrown on the auction block and made avail- able to all bidders, Most of the indie producers are. throwing plenty of money into their Alms and taking plenty of time shooting them, there- by indicating that they'll be well worth bidding for.' Productions, consequently,. are expected to get a spirited ride under the new sales plan. System will also give the indies a > chance to sell away from circuits operated by the company distribut- ing their product.. Under the pres- ent, system, a company like RKO, which distributes for Samuel Gold- wyn, Walt Disney, etc., had first crack at the letters' output "for its affiliated houses. If the company has only a straight distribution'deal, with the producer, and no produc- tion money involved, it will have to bid along with everybody else for the product, with producer naturally ^selling to'whichever .exhib offers the best terms. Indies like Goldwyn, therefore, who's talked of establishing his own exchange system, will be able to get along under existing arrangements and still be assured of getting top returns for his pix. With the system expected to hypo the demand for salesmen and with the current build, 'ing freeze' making the possibilities of building physical exchanges al- most nil at present, it's believed that the Indies will ride along as they have been doing, if the com- petitive sales plan becomes effective, JOHN WAYNE STARRER AS HAWKS'FIRST INDIE Hollywood, July 16. Howard Hawks, former Warners director, checked into the Goldwyn studio yesterday (Mon.) to produce his first Independent picture for United Artists release. Film is titled "Red River," and will start Aug. 19 on location in Arizona, with John Wayne as male star and Margaret Sheridan, a . newcomer, as femme lead. Production manager of the new outfit is Walter Mayo. Hawks is understood to be groom ing Miss Sheridan for important roles In his future productions. * Kranze Resigns RKO; Reportedly Joining UWP B. G. Kranze, HKO eastern-cen- tral district salesmariager, has re- signed to accept another position. No announcement of his new post has been given but it's believed he's joining United World Pictures assistant to William J. Heineman veepee over sales. Milton Cohen, manager of RKO's Detroit Exchange, has been named by Robert Mochrie, RKO sales chief, to succeed Kranze, effective Friday (19). Cohen started as city salesman In Detroit eight years ago for RKO and was upped to branch manager in 1943. His successor, is expected to be named in a few days. Wash. Mobilizes Vs. 10% Theatre Tax Washington, July 16, in!/. l '? a PP ears little chance of a jo lo city' tax on' admissions going into operation in Washington. Thea trical interests are mobilizing iiJ he P r °POsed scheme. Theatre tax bite was recom '"ended last week by a special tax committee of the D. C. Commission- ers. Committee was named to search for new sources of municipal rev. enue. to D. J. Won't Play Washington, July 16. Department of Justice officials will refuse to serve as a channel for passing on to the New York expediting court any recom- mendations by exhibitors and exhibitor associations to amend the big five decree. Anti-trust division has taken the stand despite exhibitor pressure. The Government claims it does hot want to be in a position where the court could assume it approves .the suggestions. Auction Selling May Increase No. Of Film Xchanges The sale of pictures singly to'the highest bidder and tradeshowings, following which an account may cancel any deal made prior to view- ing a film that has been bought, may mean an increase .in the number .of exchanges throughout the country, it is believed in certain sales circles.; In some others' the attitude seems to be that if an exhibitor cannot come from miles distant to a branch point to see pictures when available for screening, that is his, the buy- er's, hard luck. Major distributors at present op- erate branch offices in 31 different keys. In former years additional ex-, changes were located at various points in faraway areas but since have been discarded. Prior to the decision in the U. S. anti-trust trial, it is reported, as a matter of fact, that there was talk in some quarters of further, reducing the number of offices through which film was sold and serviced but now the situation is in re verse. While few exhibitors have attend*- ed trade showings inaugurated' in 1940 with the consent decree, the importance of seeing pictures under the open-bidding policy and rejec- tion of deals previously made takes on new significance." However, in view of the. large areas served by some exchanges, it would be physically impossible for the average exhibitor to attend trade showings. The only alterna- tive would be to maintain a reviewer at branch points. Larger territories covered by ex- changes as now constituted include Dallas, Boston, Atlanta, Minneapolis, Chicago, New Orleans, Salt Lake City and Denver, among others. The largest number of theatres is served by Dallas with 1,167, while Chicago runs second at 1,084, and New York third at 1,062. Smallest territory is New Haven, with only 188 theatres. FREE-FOR-ALL SURE THIS FULL A crowded courtroom and a-'hot session are promised when the three federal judges sit down in the fall to pass on a Anal decree in the Government anti-trust suit. Every branch of the film industry will seek to intervene in the hearing to pre- sent, their ideas of what the decree should say. Regardless of whether the Government and the defendants named in the suit can get together over the summer on the decree's terms, a court battle is assured on the part of exhibitor organizations disgruntled over the statutory court's decision. ■ ■ Marshalling of forces is now under way, and the eight majors will likely be in the minority when it conies to briefs filed and expressions of oral arguments, Indications-are that the chief target of attack by exhibitors will be the auction method of sell- ing which is widely feared by them as a device to skyrocket film rentals. Intervention in the suit will be defi- nitely requested by the Conference of Independent Exhibitor A.ssns., National Allied States Assn. and the Motion Picture Theatre Owners' Assn. Also, likely to step in is the Society of independent Motion Pic- ture Producers currently engaged in drafting their proposals for a sell- ing system. The CIEA will meet in the near future to mull its proposals for court consideration, Jesse Stearn, prez, disclosed last week. Permission to, file a brief and to be heard on argu- ment will be asked by that organiza- tion, Stearn said. . The association had not yet decided whether to op- pose auction selling, but a stand would be - taken at the forthcoming meet. Justice Dept. Attitude The Dep't of Justice has indicated that it will not oppose intervention by theatre units or other interested parties, Stearn said. The CIEA will fight any sche'me that would permit a defendant to increase his theatre holdings, according to Stearn. Con- sequenty, the brief to be filed by the CIEA will ask the court to ban the buying out of a partner by a major inder the partial divorcement pro- viso of the decree. CIEA will also stress the Goverri- (Continued on page 22) Army Bans Metro's 'Jim' from Camps Offended at several sequences in Metro's "Little Mr. Jim," that al- legedly cast a bad light on the Army, the Army has banned the pic- ture from screenings at all camps both in this country arid abroad. General release date for the film, starring JacKie "Butch" Jenkins, James Craig and Frances Gifford, has not been set. Army officials objected to scenes depicting officers drinkirigjun their quarters; officers' wives dictating policy on the posts, and enlisted men sent out by their superior officers to hunt for an of- ficer's lost child, when they should have been attending to their, own work. ■ ■ Big 5, Little 3 and SIMPP (Indies) All at Cross-Purposes on Decree Curb on Chiseling A brake on chiseling exhibi- tors may be one of the byprod- ucts of the auction sales feature Of the anti-trust decree. At least that's the way a number of sales toppers see it. Eligibility of a theatre to bid on a given run for a film depends,- in part, on the grosses garnered by the house in the past, execs point out. Under the decree, only theatres' of a comparative standing in the ter- ritory, can vie for a run and b.o. figures are part of that standing. An exhib, anxious to stay, with the gravy early runs or to crash into a better spot, will be less inclined to play down his take in the interest of keeping that ex- tra dollar' out of the distribs' pockets, sales officials aver hopefully. Par's Ginsberg Probes Decree's Meet on Prod. Beebe Barks at 'Shep' Hollywood, July 18. Golden Gate Pictures signed Ford Beebe to direct its forthcoming ani- mal film "My Dog Shan." Film goes into work on location July 29. D.C. Fully Satisfied With Auction Selling Washington, July 16. Trade story (not in Variett) that Justice Department planned to seek a change in the "auction sell- ing" section of the Big Five decree was branded a complete phoney' by Justice Department officials. Spokes- men said they . were well satisfied with auction selling and were inter- ested only in details of making it operate in accordance with the de- cree. Assistant Attorney General Wen- dell Berge, in charge of the Anti- Trust Division, issued a statement in which he declared: "A published report that the De partmeht of Justice contemplates requesting changes in the decree outlined by the N. Y. District Court in the motion picture case has ab solutely no foundation.- It would not be proper procedure at this stage of the case for the department *" make such a recommendation. "The Department will accept any suggestions from producer, exhibitor and distributor groups on the sub" ject of securing compliance with the decree, according to the outlined decree, will be left up to the Gov- ernment." Last paragraph means merely that •under Section 8-B of the decree, the Anti-TrustjDivision must police the selling plan laid down by the court. "Hell,, no," was the comment of another Justice official on whether the Department would try to have, the auction selling section changed. Robert Wright, in charge of mo- tion picture litigation for the Anti- Trust Division, meets here Thurs- day (18; with MPTOA execs to go over provisions of the court's order. Wright also expects lo huclclle with spokesmen for the Allie-l States exhibitors within a few days, Effect of the anti-trust ruling on production will be weighed today (17) when Henry Ginsberg, Para- mount production chief, meets with company's h.o. toppers in the first of a series of .planned huddles. Gins- berg trekked eastward to swap ideas with other Par execs to determine whether the decision calls for any switch in Par's production plans. He'll be east two to three weeks. While withholding his ideas until he. had canvassed those of h.o. of- ficials, Ginsberg indicated that the decision called for revamped think- ing on the part of production heads. Rising production costs are giving the. producers "plenty of grief," Ginsberg said, and it was up to the exhibitors "to roll up their sleeves and go to work" to make pictures profitable for both ends of the In- dustry. Necessity for exhibs to pitch' in would be accentuated by the de- cision's auction sales method, Gins- berg stated, since hiked costs and film rentals would follow. He saw "State of the Union," which Par will film, last night (Tues.). SEC Mulls Petition By Lehman to Buy RKO Stock From Atlas Philadelphia, July 16. The Securities, and Exchange Com mission is mulling a petition filed by Lehman Bros, for right to pur chase 650,000 shares of RKO common from the Atlas Corp. ■ Representatives of Lehman Bros, testified at a hearing last week that the firm was -planning to put up the stock for public sale if the SEC okays the deal. Not more, than 25, 000 shares would be sold to an in dividual buyer, Lehman declared. The SEC's decision is expected shortly. ♦■ With implications of the five-week old anti-trust decision already shap- ing up, producing companies have split into three groups representing jarring interests in the final work- ings of the proposed decree. They are the Big Five, the Little Three, and the indies (SIMPP). All three tactions currently are drafting their separate ideas on how the decree shall operate, dictated by the varied impact of the decision upon them. Schism has grown/ more pronounced as the defendants mull the problem of whether to appeal and from what. While no official decision is ad- mitted by -any of the Big Five as to an . appeal, certain sales executives envision perhaps bigger profits from the new type of auction selling. It's certain that the five majors will ask for a review of one feature of the decision—the partial divorce- ment ukase. On the other hand the Government will probably petition for complete theatre divorcement. The Big 5 is not sorry- to see pools and franchises go. Single sales of pix are nothing new since they have been a part of company practices since the inception of the consent decree. Selling . 'seasons, once as much a part of the film business as drumbeating, have almost faded out along with season product contracts. Blockbooking . nix, therefore, holds no terrors for the Big Five. Nor does the ban on minimum admission prices in lush times such as these when the' tendency is upwards rather than the reverse. Stone Defies Johnston On'Bedfellows'Tide Hollywood,, July 16. Andrew Stone yesterday (Mon- day) hurled defiance at the Johnston office and stated he would Stick with his title "Strange Bedfellows," de- spite the fact that the Motion Pic- ture Association had banned the tag for the film after six weeks' de- liberation. This is the fourth handle Stone has had on the picture and he has al- ready put out some advertising, in addtion to having the film well un- 1 der way "in lensing. Other tags turned down up to now. include "Stripped for Action," "Here We Go I Again" and "Hot and Bothered." 'Victory' for Exhibs? Auction sales, execs concede; mean personal headaches and increased distribution expenses but one topper expressed the general view when he . said, "It'll cost us more but we'll more than make it up in increased Rentals:" Reverse side of the medal, proving the^ame point, are. the ex-, nibs' wails over possible hike in rentals. *One more 'victory' like this," said a New York exhib after reading the decision, "and we'll all be but of business." The Big Five, therefore, has been concentrating on their own ideas of how to sell at auction with little concern over an affirmance by the Supreme Court. While they will fight, tooth and nail, against divorce- ment, partial or complete, an appeal from the selling methods is not. likely. Little 3's Stance Appeal by the Little Three ,from the tag of illegality fixed to block booking by the decision and the auc- tion sales proviso is currently being mulled, particularly by execs of Co- 'lumbla and Universal. The two com- panies shied away from an agree- ment to conform with single sales provision because it was feared that they would jeopardize their right to a review by the high court. Until the question of an appeal is settled, one legalitc said, the companies would make no move towards single sales. With a raft of B pix, no theatres of their own to rely on for surefirf distribution and no previous experi- ence in individual film sales, both Columbia and U have been hardest hit by the decision. Consequently their thinking has been along differ- ent lines than that of the Big Five and they will probably fight the de- cision's Implications all' along the line. The trio's lawyers have .taken no part in regular Big Five confabs since the split which followed the lalter's agreement to put most of the decision's features into effect during the summer. Indie Producers The indie producers, banded to- gether under the Society of Inde- pendent Motion Picture Producers, with , their own interests to protect have been mulling the decision which, in the main,, they regard- as a break. SIMPP's ideas on how the decree should work is currently be- ing % draftcd in the form of a plan for handling auction sales with Gunther R. Les'sing, Walt Disney Productions' veepee as draftsman and Donald M. Nelson, SIMPP prexy, as sponsor.