Variety (May 1948)

nCTDIIBS 1947 GROSS OFF 81 NET 25% Hi^d^ of Anti-Trust Decision , Washington, May 4. HlgWight^oints of the Supteme Court's ruling on the big New Vorte antl-feowt case;..., . ' 1 The eoJttpetitlve bidding procedure set up by the lower court it tiirbwn out the window as of no particular help to the indepen- dent exhibitor, but as something which would involve the Federal judiciary permanently In the day-by-day operations of the film 2 The matter of divestiture is sent back to the trlai court for further study, with the Supreme Court, in effect, ielllng the Dis- trict court to get tough with the defendants. The Supreme Court ^'fnipnfew artrounition in the hands of the trial coyrt by pointing out tftat it had not fully considered all the types of monopoly in- volved on the part of the theatre-owning majors. 3. The Supreme Court found a cross-licensing ban a short-term reinedy and only another form of divestiture, and suggested that the'lower court should buy the original paclcage rather than a " sutfstltute. . • 4, The trial court was told that it had authority to set up an arbitration system which would be strong enough to work. The lower court had felt jt lacked power to do this. 5. The majors were found to be discriminating in favor of their ri^KiiUated theatres and of the big independent chains. In view of • that'fact that competitive bidding was killed, the trial court was ' asked to do something else to cure this discrimination. ' 6. Conditional blockbooking was outlawed, but It was agreed ' that the companies might sell blocks of pictures so long as there were no strings attached forcing exhibitors to buy what they did ■- not want in tie-in sales. 7. The lower court's ruling on the illegality of formula deals and . master agreements was upheld. 8. The Supreme Court found that not all franchises are illegal, '■< per se. The lower court had ruled them out,' claimhig that com- petitive bidding took care of everyttiing. With competitive bidding terminated, the matter of franchises was remanded to the lower : court for further study. , 9. Joint ownership of theatres by two or more defendant com- ;. panics was outlawed. Joint ownership of theatres by a defendant . company and an independent was ordered dissolved where the • defendant acquired its share illegally, or whether the partial own- ' ershlp helped to create a-monopoly situation. In such cases, the majors are required to sell only. TJhey may not buy or sell, as provided by the lower court. In cases where partial interest was acquired legally and where no monopoly situation resulted, the majors are allowed to either buy or sell. 10. The dissolution of pooling arrangements, ordered by the lower court, is sustained. 11. The lower court was upheld In Its findings ordering the end of "unreasonable" clearances and In Its ruling that a distributor' must justify his clearance where it is challenged. 12. Prlcfr-fixing was found to exist. 13. The Supreme Court ioimd no monopoly in the production of films, upholding the lower court on this. GoUwp Merger Deal with E WouU Lrave Him Great Autonomy Deal which Samuel Goldwyn*' and Robert R. Young have been ' talking for merger of Goldwyn 3Productions into Eagle ' Lion would leave the producer great autonomy. There would be an ex- change of stock, similar to the way International was merged with Universal and Liberty with Para- mount, but, in contrast to those setups, Goldwyn would retain his V identity as an Indie producer. That negotiations between Gold^ wyn and Young, controlling stock- holder of EXi, were started in the east three months ago and are about to continue on the Coast was confirmed authoritatively in New York yesterday (Tuesday). Deal is far from consummation, however. Young left for the Coast last night, arriving there Saturday (8), for the huddles wifh Goldwyn. .He'll be in Hollywood about two weeks. Merger entails a combination of Goldwyn's eight-page studio with that of EL, release by EL of the , Goldwyn product, which now is distributed by RKO, and financing of Goldwyn's pictures by EL. It will serve to relieve the producer (Continued on page 27) One for Ripley! Indie's Reverse, Asks Last Run Duluth, May 4. JJenme Berger, prez of North t'Cntfal Allied and one of the in- dustry's stormy petrels, wants major dlstribs to call all bets off on a settlement which he won here tor^his Lyceum theatre. Deal came early m 1947 gs result of an anti- trust action which Berger brought against the eight majors. It raised wie Lyceum from last-run to sec- ond-run after Berger had sued Claiming the house was entitled to the higher notch. Now, Berger is asking for a return to last run. His letter to the majors Says the ftouse isn't paying its way on second-run rentals. Drawing the Line Distinction between divorce- ment and divestiture, general- ly used interchangeably in the industry, is pointed up in comments by lawyers on the U. S. Supreme Court decision. Order of divorcement would require a division of exhibi- tion from distribution with a company granted the choice as .to what branch It would stay with. But the decision i m p 11 e s divestiture. That means the sale of its theatres, or part of them, and no choice offered on where to go. Testifying that film business in 1947 suifered far more from rising costs than slipping revenues, seven major companies In that first post- war year of normalcy slid only 8% in gross returns while their net profits dipped a full 25%, The seven top companies (every major except United Artists), grossed a total of $952,000,000' a tremendous figure by pfewar standards. In the peak year of all times-^1946—^thelr gross totalled $1,029,306,000. By the close of the fiscal, year, film inventories mounted to an un- precedented high of $330,000,000 for the big seven. But that figure is expected to represent a peak, probably for many years to come, in the Industry as the production- distribution end of the industry has thrown its weight behind econ- omy moves. The rise for '47 was some 10% over a total backlog of $302,311,000 when the stanza started. Included in inventory are hot only films before the cameras, in release and completed but not yet released, but also story rights and other film materials. Considering net rather than gross, the .seven Tsompanies stacked up a total of $95,000,000 (with RKO's net estimated at $8,700,000), against a 1946 all time record of $124,245,000:. Significant In com- paring the net with the gross is (Continued on page 31) Lower Court Nudged Into Action On Divorcement by Instructions From High Court to Restudy Case 70;000,000 Pix Tk Sold Weekly, But Only M Of Fans Over 30-ARl still behind attendance figures publicized by the film Industry, Audience Research, Inc., revealed surveys today (Wed.) showing an average weekly attendance of 70,- 000,000 at the nation's filmeries duririg March. Considered espe- cially significant, despite the dis* parity in estimates^ however, was ARI's confirmation of other Indus- try figures showing that only 35% of the 70,000,000 film customers were over 30 years of age. Rathvon Seeks Coin N. Peter Rathvon, RKO proxy, will return to the Coast from New York at the end of this week. He has been east for the past week." It Is reported that his trip may have been in a final effort to line up New York financial Interest to take over RKO before Floyd Od- ium's Atlas Corp. sells controlling Interest to Howard Hughes. Rathvon has long been anxious to head a syndicate to buy RKO. Hughes Takeover TechmcaDy Frees Schary from RKO Hollywood, May 4. Dore Schary will be a free agent if Howard Hughes' deal for pur- chase of control of RKO goes through, studio production chief's pact carries a clause terminating his employment If ownership is changed. This doesn't necessarily mean that Schary will leave RKO, but it'twill make him free to nego- tiate a new setup with Hughes or with another studio. Possibility that William Dozler might replace Schary in the RKO production setup vras seen in the admission of the Universal-Inter- national exec that lie has already huddled with Hughes on taking over the RKO spot, if the deal goes (Continued on page 27)" By HERMAN A. LOWE Washington, May 4. The Big Five of the motion pi<>»~ ture industry was pushed a long way toward substantial divorce- ment of its theatre interests yes- terday (3), The Supreme Court, ruling, in crushing fashion for the Government, threw out the com- petitive bidding system created by the trial court and sent the case. back to that tribunal to restudy the- question of divestiture. The lower -court was virtually nudged into action along the lines: of divorcement by some of the in- structions given it by the Supreme Court, which also ordered.the Big Five to get rid of much of the the- atre holdings in which these com- , panies — Metro, Warners, Para- mount, RKO, and 20th-H>wned partial Interest. At the same time, in ruling on various trade practices, th^ high court broadly upheld the lower tribunal- in a field which not only affected the Big Five but also the Little Three defendants—Unit- ed Artists, Universal and Colum- bia. The decision was 7-1, with Jus- tice Felix Frankfurter dissenting, and Justice Robert H. Jackson tak- ing no part. The ruling was seen as a tremen- KContinued on page 69) PIX BIZ CHILLS CHILE'S UQUOR-SWAP PROPOSAL in the country between 31 and 60 could be induced to attend film- eries once a week, the national box- office take would be increased $800,000,000 annually after taxes. For March alone, ARI declared, the Increased revenue would have totaled more than $75,000,000. Im- portance to dlstribs of getting people in the older age brackets to (Continued on page 24) Trust Decision Rates Films With Press Freedom Washington, May 4. Tucked away in the big motion picture anti-trust case decision yes- terday (3) was a sentence which may turn out to be the most sig- nificant feature of all. In writing on the matter of monopoly and di- vestiture, the high court declared: "We have no doubt that moving pictures, like newspapers and radio, are included in the press, whose freedom is guaranteed by the first amendment. "That Issue would be focussed here if we had any question con- cerning monopoly in the pi-oduc- tlon of moving pictures. But mon- opoly in production was eliminated as an issue in these cases, as we liave noted." Thus the Supreme Court, in a single paragraph, settled one of (Continued on page 71) Film Industiy has- just missed getting into the wholesale liquor 'xbT''*.M.i.^^+l^~tw«+~« oir Aannio l buslncss. International division of ARI estimated that if all people] ^j^^ ^j^^.^^ p.^^^^.^ ^^^^ ica, in hunting around for meth- ods of getting blocked currency out of Chile, Was offered a d^eal by a local distillery th^re : to provide it with $1,000,000 worth of Scotch- type ^whiskey for' distribution in the U. S. In return for the equiva- lent in frozen Chilean' pesos. Offer was under consideration by major companies here for more (Cbiitinued on page 27) Metro, Ent Reported In U.S. Distrib Pact Enterprise Productions has re- portedly closed a deal with Metro to distribute its product in the U. S. Metro already releases Ent product abroad. Deal was under- stood set with Metro homeoffide execs by Ent proxy Charles Ein- feld, who returned to the Coast yesterday (Tuesday) to relay de- tails of the pact to the Indie unit's board chairman, David' L.'Loew. Until now, U. S. distribution of Ent product has beeii handled by (Continued on page 22) National Boxoffice Survey spotty Biz in Many Key*—'Union,' 'Bells,' 'Clock,' 'Lady,' 'Sitting,' 'Furnace* Pace Field Returns from firstruns in some 22 key cities covered, this week by 'VAniETY again attest to gen- erally spotty biz picture. Most ex- hibitors are blaming the mild weather and seasonal influences in spots where offish trend is most evident. In only the mildest keys have the big boxoffice films been seriously hurt, however. This is particularly true of "State of Union" (M-G), which is parading with the biggest total for a single feature in many weeks. Metro opus will come close to $578,000 in 21 key spots where it's on display this session, making it easy winner of national boxoffice sweepstakes in current week. "Miracle of Bells" (RKO) is sec- ond place winner for second week in a row, while "Big Clock" (Par) slipped out of top groove to third. "Lady From Shanghai" (Col) fin- ished in fourth spot, having a good margin over "Sitting pretty" (20th), fifth money favorite. "Fury at Furnace Creek" (20th) wound up in sixth but was not particularly strong in many keys, "Naked City" (U) headed the runners-up with "Casbah" (U), "Tarzan and Mermaids" (RKO) and "Panhandle" (Mono) finishing in that order for this classification. Unusual aspect of the way product was spotted around this week is the fact that real money was widely split among some 12 to 15 films outside the Big Six. Of the other newcomers, "Home- coming" (M-G) looks most promis- ing, being sock on initial week at N. Y. Capitol. "Best Man Wins" (Col) is turning in a fancy round on unveiling in St. Louis. "Sainted Sisters" (Par) shapes considerably better this stanza with a strong week in Denver and fine Boston session. "Ruthless" (EL), given a boost via Hollywood stars' personals in San Francisco, shapes big there is thin in Seattle. "Ft. Apache" (RKO) is displaying great strength this round on a few new dates. "Anna Karenina" (20th) looks dis- appointing on N. Y. preem. "Hat- ter's Castle" (Par) is solid on U. S. unveiling in Frisco. ,"Are You With It?" (U), while mild to thin in most keys currently, will be brisk in Louisville, "Noose Hangs High" (EL) is having a sock Port- land session. (Complete Boxo//ice Reports on Pogfes 12-13) Trade Murk RegtHtorefl ■ POUNDED BT 81ME SILTHKMAN FnbUsIied Weekly by TABIET1C, Inc. did SUvermftn, President 164 West 46th St., New Tbrfc J», N. T. Hollywood 9S 6811 Tucoa Street n'aBhlngton 4 1292 National Press Bulldlnc t Chicago t S60 NO. Mlchlc;an Ave. ' Iiondop WC8 . 8 'St. Martln'« PI., rTrafalsaT M<u SUBSCBIPTION Annual UO Foreign. $11 Single Copies..., .....iS Cents Vol.170 No. 9 INDEX Bills 62 Chatter 70 Concert 67 Film Reviews ........... 8 House Reviews .....,.... 22 Inside Legit 64 Inside Pictures .......... 27 International.....24 Legitimate........ 63 Literati 69 Music .................. . 51 New Acts ...,...'.,..... 62 Night Club Reviews...... 60. Obituaries . . , ...... ,,. 71 Orchestras 51 Pictures 2 Radio . 32 Radio Reviews 38 Records .>.. 53 Frank Scully . .... ... 69 Television 40. Vaudeville 58 (Pqbllshed in BoUywood iqr Da|l«^ Variety, Ltd.) tlS a Year—120 : FotvlKit