Variety (Dec 1948)

Wedncgday, Peccmlicr 15, 194» EXHIBS TRAPPED IN DIVORCE ME Increasing Pace of Exhibs Suits A Staggering Legal Bill for Majors The rush of suing exhibs to the<- Federal courts to get in their anti- trust blows against the major com- ' panies to the tune of triple dam- ages has now reached such propor- tions as to generate emergency meetings on the part-of the de- fendants. A committee of attor- neys has been huddling at the Mo- tion Picture Assn. of America of- fices to worlc out ways of cutting the costs of defending these ac- tions. Included in the special group are Austin C. Keough, gen- eral counsel for Paramount* and Edward C. Raftery, attorney for United Artists. the staggering increase in these ^ actions regarded by many biggies as one of the top problems con- fronting the majors—is brouglit into focus by a roundup of suits | filed since October, 1947, when the , Government's main anti-trust ac-i tion went on the U. S. Supreme | Court calendar. In the 14 motiths that followed, 37 actions seeking an estimated $30,000,000 in dam- ages have been CEutnped into the courts." . >■•■ ■ ■ ■ ■ Typifying the acceleration in the recent number oi dciions is the fact tliat 31 other suits $re pend- ing, filed in all the years before, which demand $45,000,000 dam- (Continued on page 15) CHALIFS UA JOB TO UP PRODUCT FROM ABROAD ; Selmer (Sunny) Ghalif, named this weelc as "international product V scout" for United Artists, will spend: a good portion of his time abroad seelcUig out completed films and possible production setups for UA producers^ He expects to leave shortly after the beginning of the ' year for England, France and Italy. : Grad Sears, UA prexy,, who negor ' tiated the deal with Ghalif on the : Coast last weelc and finally set it in New.Yorlc Monday (13), sees Euro- ' "pean product as a source for boost- ■ ing UA's tight supply. It is thought that Chalif may be able to set up some of the financing abroad that Indie producei's are having such difficulty in getting currently in the V.% Chalif will also aid George L. ': . Bagnall, v.p. in charge , of produce - tion, in seeking out. new product on the Coast. He will report di- rectly to the New York office, how- ever. Chalif has been general manager of the film interests of Mary Pick- ford, UA p!trtner> and was producer tion manager for Comet and Tri- angle indie units. In which she par- ticipated. He is related to her by marriage. His brother, Vitalis, is a member of the UA board, Howard Dietz talntat annlvtriarlm, runiiinq Hi* gamHt from VARIETY'S 43d to M«tre's 2Sth, anolhm Kitt«rieal highllgM In ■ hrany plM* tltl«d »». ''Hello, '49 In th« ferlhcominq 43d Anniversary Number of Due Shortly DISTRIBSINSPOT TO HIKE Republic Will Make Limited Number Of High Budgeters, at About 7006 . pcthronemeht of exhibition as the kiilgpin moneymakihg: 'wink of | the filin biz may ;be the final up- shot to the (30vernmeiit's' trust- busting efforts. That's the way a number of, promirteht . theatre. men^ are Viewingthe immiiiiCnt" di^^^ of theatres fi'om tlie iriajor coin; panieS: vto \vhiCh . rapiid, develop- ments now point' aS aii'eady; :ln ^sight:;:',;■.:>.-,:;•'■;-■,■; ■■^'^'^^ ■ The fear is definitely growing among exhibs that' divbrceiTieht, paraddxi.cailyejibughi ' '■ will .hoist' distribution again :int6: the; driver's. seat. They bolieye squeeze play oh; theatres foreshadovved by new I activities on the part of producing* I distributing; cornpanieS such ' ai^ 20th-'J"ox'S: now terminated nego- tiations for control of the Arrieri- can Broadcasting. Co, will be the first iirnpqrtant ■. isspeii^cttSSioR^. >f diyorce:; H^^ <jf .Ja'rg'^ indie Girciiit-^p his . brought; to '- light .■yfetY:::little exultation over irtipendihg thfeatre-: a.vings. Freed from, the exacting obliga- tions of running large, theatre c ha ins, . production-di.stribution units will be able to extract con-: siderably higher reiital's, the pat- tern of exhib thinking goes. . Upper- most in many minds is the question as to what force will compel stu- dios to turn out large blocks of films if these outfits have no thea- tres of their own to feed. ; "BKOi for instance, it's now g^., thought, will ultimately reduce its . . .t,. , » .,. . ; output by half, concentrating on periments with General Anilme &|..surefire" films with not too much Ansco s Daily Color Rushes Intrigue Metro Hollywood, Dec. 14. Speedup of color processing and printing to the point whei>e daily ! rushes on tinted productions be- comes possible is the main objec-1 live of Metro's current joint Herbert Yates vitws 1948 as the Year of Transformation ■ .■*..• ■..»■.. ' c|ii :«dliterial'ftatHrt in V 4iSd Anniversary Number Out Soon For this reason,' M-G regard for the necessities of volume elaborate . laboratory production. Other companies,, also, will trend toward the indie type of production in whicli accent is on (Continued on page 6) Film Corp. has built equipment; to work on GAFC's Ansco -color process and the two companies are engaged in simplify- ing the processing which goes into the preparation of daily rushes. The work has now reached the point where several test films are to be put out in the perfected Ansco process. In the spring, M-G plans to make several shorts in Ansco as well as a number of color musical interludes which will be DOS-EL Talidng Again Hollywood, Dec. 14. On-again, off-again negotiations between David O. Selznick and Eagle Lion for a releasing deal of Selznick's product through EL have been revived again. Talks' are now taking place with Selznick and . . , . , , , , ,. Daniel O'Shea, former's financial inserted in regular black-and-white , aide, on one side of the fence, and features. It is expected that sue cessful tests will lead to production of all-color features by Metro in Ansco.' ■. Technicolor still remains the: kingpin tint process but complex printing techniques required by Techni has Metro seeking a simpli- fied and faster method. Arthur Krim, EL prexy, on the other. New discussions follow a denial of the possibility of the deal made by Selznick Releasing Cu-ganization in a statement by O'Shea. If a pact is inked, it may range from re- issues only to an entire sweep of Selznick's product. Republic will return to making a limited number of high-budgelers each year. Ceiling on them will be about $700,000. Move back into bigtime coin-spending resulted from lengthy discussion on the' subject at a meeting of the board, presided over by prexy Herbert J. Yates, in New York last Thursday (9). Action was taken partially as re- sult of urging by Rep's v.p. in charge, of distribution. James R. ' Grainger. He is reported to liave' told the directors that the big prod- , uct is very advantageous in heliv ing to move the smaller-budgeted ' films faster. Even if a good $700,000 film doesn't do any more than get its money back, it will prove profit- ■ able to the company, it was pointed : out, in the aid it gives in selling other product. Board took no vote on the move, but gave Its informal assent after ; long discussion. Yates is reported to have remarked that he was of the opinion that the directorate did , not want him to go into any further big^budgeters. Board members said' that was-nof soi but that it depend- -. ed "entirely on the quality of the., scripts and the amount to be spent. They said that they felt pix cost- ing $1,000,000 or more now were out of the question, but had no ob- RK0s$3W Loss But Regains $1025,000 Taxes RKO stands to gain a $1,02.'>.000 refund from the Government by i jection if the ceiling was held to reason of its Writeoff of $3,560,129 during the current year as dis- closed in its 39 week statement made this: week. Claim for that sum will be made to the Bureau of Internal Revenue under the excess profits laws. While the writeoff is a bookkeeping, entry, the refund will be in dollars and cents. Excess profits provisions grant the right to refunds to any com-, pany that- paid taxes in the excess bracket during the years when the law was in effect, if the company $700,000. Yates agreed, stating he would attempt to get some scripts in work ior- productions :of that, size. Yates, during the war and imt mediately after * started to go .in lor. the big-budgeters to lift the pres- tige of the company, which had been built on westerns and pro- grammers. Results in general were not profitable. This was mostly, board:, members; felt,. because. the pix were too expensive in propor- tion to the quality. A number of shows losses in later years. Hence, | them went to /"^ RKO, by tossing out inflated values on stories and'continuities gather- ing dust.on company shelves, has been able to mark up the loss. Net loss for RKO during the first nine months of 1948 comes to $356,024. Actually profits before the writeoff amounted to $3,479,105 but the deduction of the $3,560,129 brings the company into the red by- $81,024, Added to this loss is the sum of $273,000 as estimated in- come taxes, resulting in tlie final, figure of $356,024. For the 13 weeks ended Oct. 2, RKO had a net of $122,306 before the bookkeeping operation. For (Continued 0|i page 20) er^ It was as a result of, displeas- ure over this policy, expressed by (Continued on page 22) Meantime Grad Sears Is NY-LA'ing Like Cuh-razy United Artists' owners and man- agement have still not come to an agreement bn the films to be financed -with the $600,000 Howard Hughes has offered to advance the company. Grad Sears, UA prexy, returned from the Coast over the weekend after confabs with owners Mary Pickford and Charles Chaplin and various producers. 4,u. P ""^"^ saw in New York this week that no deals for pro- duction of the films had been set because of inability of any of the producers interested to come up With an acceptable package. Miss ficktord and Chaplin are under- stood still to be interested in ' "Sing part of the coin for financing I ineir own productions, but would I not hold up other deals on that! account if any other producer dem-' onstrated to Sears he had a good ; ■■setup.-. ,:, ■ ■.•|, Deal, which is set so far as the i Hughes end is concerned, does not ■ i^^ln set number of films ! w be financed with the coin, It I i? Senerally accepted, however, 1 that It will be used for three. In return for the financing, UA will, jelease to Hughes three of his pix,' tra ts distribution con- OUT SOON! The 43rd Anniversary Number OF Forms closing shortly Usual Advertising rates prefoil Special exploitation advantages Copy and space reservations may be sent to any Variety office NEW YORK If 1S4 W. 46»fe St. HOLLYWOOD 2S «311 Yucca St. CHICAGO 1 360 N. Mlchigoii Av«. LONDON, W. C. 2 • St. Martin's Plaec Trafalgar SqMir* STOCKHOLDER SUES ON WB-SPERUNG LINK Los Angeles, Dec. 14. In stockholder suit filed in L. A. superior court, William B; Wein- : berger charged that Milton Sperl- ing, son-in-law of Warner Bros.' prexy Harry M. Warner, was "en- riched" at the expense of the con- cern. Action asks court to com- pel WB board of directors to re- imburse the company for "any losses incurred." Suit says Sperling received con- tract late in 1945 for six pix. Un- der agreement, Sperling and Jo- seph Bernhard were to make them for United States Pictures. Wein- berger contends agreement was to , disadvantage of WB because it was required to provide 50% of cost of producing pix, with no security. Remainder of financing* suit alf leges, was to come from a N. Y. bank which handled WB finances* and the bank, as security for loan, held a lien on most of assets of U. S. Pictures. Variety Clubs' Backing Insures Pic's Quick Loan I Allied Artists, Monogram's high- er-budget affiliate, has engineered I a $200,000 bank loan on "Bad 1 Boy,'' which it recently completed. I Company wants the coin to finance : i further production at once, rather I/than await its coming , back via [ playoff of the picture.: I Advance was made by the Chem- I ical Bank & trust Co., N. Y. Total I negative cost of the film was .$375;- I 000. It stars Audie Murphy, Marine I Corps hero, and concerns the Va- I riety Clubs. Original financing was by private sources through the Va- ' riety organizations. Variety Clubs are cooperating in • promotion and playdating the film, j It is understood a 300-theatre preem is already set. Bank, as a re- sult, is understood to figure the 200G loan a soft touch for a quick payoff.