Variety (Jan 1949)

Hrednesdajr, January 5, 1949 Forty'third P^^OSIETY Anniversary irVTEttXATIOXAL 201 $12,000,000 Profit k Govt. British Picture Industry Views 1949 Via Argentine's Casinos Pessimistically; Production's Retreat $140,000,000 Grossed on Gambling, Time When Film Biz Seemed to .Thrive on Crises at an End—^Threat to U. S. Just a $20,000,000 from *urf, Pix T^ng of the Past—^Indies Squeezed Out of Business Do $15,000,000 in B. A. By HAROLD MYERS Buenos Aires. The 100% increases: which labor has obtained on the wages of all but the whitecoUar workers in Argentine, since President Peron took over the government, are mostly pouring into the casinos and racetracks. , The breakdown of what the citizenry spends, on .cnter- fainineat is approximately as follows (in U. S. currency): Racetracks $20,000,000 Casinos 140,000,000 Pictures '. 15,000,000 beeit 3,000,000 Football 1,102,300 Boxing: 277,200 ~ . Concerts 115,000 Millions of the workers' earnings pour onto the green baize roulette and baccarat tables at Argentina's casinos every year, although the Government, which operates the gambling palaces, claims that these millions .flow back to the people in the shape of new roads, hospitals, schools and social welfare schemes. Opposition elements, oh the^ other hand, charge that, these millions are squandered/ by the Peron regime on its own political ballyhoo and in making the people ''gifts" in the way of bicycles, free tider and cake at Xmastide and other forms of donations. Close to $12,000,000 profit was netted by the governr ment in the 1947-48 summer season through operation, of the seven government-controlled casinos scattered- throughout the republic. The total gross,for the period has never been made^public, but careful libservers esti- mate it at $140,000,000. The .seven casinos are .mostly concentrated in and around Mar del Plata, known locally as the.'"Pearl of the Atlantic." It's a coast resort teeming With gigantic apartment houses, deluxe hotels and beauti- ful villas^ Mar del Plata has proved a colossal boom real estate development in the last decade. Mar del Plata itself boasts three casinos. Most im- \portant of all is the palatial Gran Casino, built with the proceeds of the gambling, which includes indoor swimming pools, racket courts, bowling alleys^ concert halls, restau- rants, cafes,: a nightclub,' barbershops, skating rinks and the Gran Hotel Provincia, inaugurated in March of last year. An annex of the Gran Casino operates at the old Club Pueyrredon and another at the traditional and for- merly very snobbish Club Mar del Plata. The socialites, for whom Mar del Plata was formerly a sort of exclusive deluxe Newport, now patronize the sea- spots on the Uruguayan coast, like Punta del Kste and Carrasco, where life is freer and they can say what they . think about Peron without feariof the cops tapping them on the shoulder. Encouraged by the millions pouring into the state coffers on the Argentine side of the River Plate from this: summer gambling, the Uruguayan government has ta^cn over the casinos at Carrasco and Punta del Este. It uses the profits to build more and bigger resorts, and : Wider and smoother roads over which the Argentine cars run from the ferry that brings them to Colonia on the. ' Uruguayan coast, out to the Atlantic beaches. I 'Family* CasinoB | A half hour's drive from Mar del Plata sees the smaller and more family type of bathing resorts of Necojphea. and ' Miramar, each having its own casinos, which also rake in ' plenty, of coin for the Argentine state, even though the 'Stakes are smaller. In the winter season, when, the Atlantic coast casinos are shuttered, Argentines can still gamble at the. Termas de Rio Hondo, while taking the waters at this spa in the arid northern province of Santiago del Estero. The Rio HonclO' Spot, .mecca of the, rheunjatic rich in the deep of 'Wihter, netted the state around $807,400 in the 1947-48 season. ' \Mendo;za, the sun-splashed valley city on the slope of the Andean foothills, surrounded by fertile vineyards; has a casino which made a profit of about $300,600 for the same season. The Mendoza spot is open all the year ■round, and this year the Buenos Aires provincial govern- ment, which controls the Gran Casino, Mar del Plata, ar- . ranged to keep this essentially summer spot open all year : for weekend gamblers from Buenos Aires, who can spin ■ down to the^ Atlantic spot by train or automobile, for a . Saturday-to-Monday fling at the tables. There are no of- ficial figures to show what profit has been netted by this weekend operation, but a safe reckoning is that attend- . ance fell short ot what was expected. _ The casino operation is closely tied in with the Argen- ■ tine film industry, as the Gran Casino was the creation of picture tycoon Miguel Machinandiarena and his broth- ers, of San Miguel Studios. A percentage of their profits was supposed to go back into the pic biz until the Govern- ,. ment-stepped in and cancelled their concession. Recently the provincial Government turned film-conscious and or- ..ganized' a filmcfestival coinciding with inauguration of the Casino hotel. The festival was planned as an annual event; . but uncomfortable questions have been put in some quar- . tbrs about the fabulous sums absorbed in its organization, 6i»d the current prediction is that no festival will be held in the 1948-49 season. Of the fabulous profit made by the state-operated casinos, $4,000,000 go to public works projects and Public health service. The l>alance swells the Senora de Peron's social welfai'e fund-4-wbicfa has never published any balance sheet. 1 .SOOG Bet on Favorite | The coin spent on the, tote machines at the Palermo and San Isidro racetracks in Buenos Aires during 1948 hfve^spiraled way above anything, recorded in the history of the Argentine turf. The favorite in one race Was backed up to $500,000 for a win and $160,000 for place (the horse came in second). So much money has been bet .- 'London.'''" The British picture industry has reached the stage of perpetual crisis. The year 1948, which 6pened with the ad valorem crisis and threatened^ to close most theatres, ^ was followed by a series of intermittent emergencies throughout the year, and as 1949 saw the light British pro- duction, was faced with Its biggest slump as studios be- came idle and technicians unemployed; . 'There was a -time when the British film industry ap- ' peared to thrive on a crisis, but that time has now clearly -. passed. The British'-made.picture, which in the immedi- ate postwar period was developing as a serious competitor •to Hollywood, is now receding into the background. Its predominance in home and certain overseas markets ap- parently was little more than, a one-day wonder. The depression in British production has squeezed the independent out of business. To all intents and purposes British production i;s now in. the hands of the Rank and Korda groups, with Associated British as' modest runnerup in collaboration with Warners. Odd production's -are being made here and there, but the independent has little hope of continuing production while the present difficulties per- sist. Even among the bigger groups the policy of retrench- ment is developing. The Rank Organization, for example, in closing its Islington Studio, is adhering to a produc tion program of around 40 pictures, and although it has facilities available, does not propose at this stage to in- crease that figure. Improved production methods, which, are being tried out within the Rank colossus, may eventu- ally lead to further closures but not apparently to an in^ creased output. British production, which is the center of all the ills ot the picture industry, is fighting on two fronts, for in- creased production and improved quality. With few ex- ceptions, however, the campaign is not proceeding accord- ing to plan, and a retreat is taking place on both fronts. The number of topflight British productions which made the boxoffice grade during the past year could almost be counted on the fingers of both hands. The de- cline. ;ih quality, a se.rious factor in itself, h;as not been compehsatdd for by any substantial improvement in quan- tity. Who would have thought that when the 45% quota was introduced in the summer of 1948 that within a few weeks ; British production Would be at its lowest ebb? Who would have thought that with this new incentive that studios would go dark, one after another; and search in vain for potential producers? And who would have thought that unemployment would reach a new peak? i Seeks to Salvage Industry Frankly no one thought that, least of all Harold Wil-. son, president of the Board of Trade, who is devoting more and more time towards the salvation of the British picture industry. The first failure of the quota to keep the studios going was put down by Wilson to lack of finance. Too much money had been lost by banks and insurance companies,, and financial circles in the "City" (the British Wall Street) no longer regarded British pro- duction as a good risk. So Wilson introduced legislation to provide for financial aid to be made available to dis- tributors. So $20,000,000 of public money was set aside for this purpose; and a Film Bank was set up. But as the ' first loans were made^the studiO crisis deepened.. Finance on nags which any racing' fan could tell couldn't possibly get to the winning post first, as to make it obvious that the betting is not bemg done by the usual racing crowd, biit is pouring on to the gee-gees from the .blue denim pockets of the newly-rich laboring classes, who don't know what to do with the shekels Peron has put in their grasp. The total coin bet on the first 10 months of 1948 was around $16,000,000. When the fall year is counted up, it will probably reach $20,000,000. The state takes 17% of the totalizator. Football is a sport which absorbs an immense propor- tion of the average Argentino's surplus cash, and a fund; of his enthusiasm and energy. The 16 professional foot? ball clubs grossed gate receipts of $1,102,300 last season. : Grosses toboganned spectacul9rly as a result of a squabble involving professional football players. The grosses lost by the football clubs during this rift swelled the already high legit and film grosses, especially the latter, which spiraled steadily throughout the year, notwithstanding all the snags distributors and exhibitors had to overcome to get good films in face of government- curtailed imports. There were 204 pic theatres in opera- tion as compared to 19 legit houses. Xegit grosses also spiraled, mainly due to increased iidmission scales. At- tendance upped as regards comedies and musical revues, all of which were sellout hits. More serious fare, on the other hand, was distinguished by a notable succession, of boxoffice flops. This may be the result of much govern- ment interference in the choice of plays and players. Nitery operators are cagey about revealing what their returns were on the year's operation, but at 12 pesos (about $3 the drink) it stands to reason that they have been raking in coin in proportion to the spending mania of their patrons. Most niteries report that they have been working to capacity every night of the week. The trend towards presentation of shows has increased and has gone, a long way to helping.the increase in niteiy ''-.attendance,.'". alone was not the sole stumbling. bl«ck, and Wilson has been compelled to make .this admission. Obviously something has not gone according to plan. What is it? What explanation can they give in high gov- ernment' circles that a 45% quota has produced one of the biggest production slumps in the history of the British film industry? After all, the quota means, in effect, that virtually one-half available playing time must be given over to native product. Yet despite this incentive studios 'are out of business, independents idle and technicians and craftsmen on the dole. The answer is not too difficult to find. This Island of ours presents only a comparatively small outlet for Britiiih .producers. With less than: 5,000 theatres.in the country, only pictures made on a modest budget can hope to show a profit if their exhibition is restricted to the home market. But everyone appreciates that the! entertainment value of a modestly made picture is all too frequently re- flected in the finished article. Cheaply made productions ■ have little hope of competing with the best from Holly- wood or the best from Britain; v With- this realization, many British producers have gone in for expensive pro- ductions in the hope that apart from achieving success with native audiences they would crash the export market^ particularly the American market. That appears to have been their undoing. Eric Johnston, prez of- the Motion: Picture Assn. ot America, during his visit to London in the summer, frankly intimated that the entire British production industry- would not earn $1,000,000 in America for the year. That is against a figure four times as great as in the previous year.!! Now the French market is closed to Britain, with the: exception: of 20 pictures annually, and only modest returns are coming in from other parts of Europe. ' The far-flung British Empire is all too sparsely populated to induce enough foreign coin b.kCk. to Britain to refinance new production.. Patently, the attraction is still America r^but America is not to be attracted. Only a handful of British pictures have any hope of making the grade, and these are productions of tlie calibre of "Hamlet," "Red Shoes," "The Fallen Idol" and "The Winslow Boy." Leaders of: the British industry, like J. Arthur Rank and Sir Alexander Korda, are unquestionably disturbed at the trend of events dunng the: past 12 months. The boycott of British films i'l the U. S. during the summer has ad- , versely affected their businesses and .unless there is a rap- prochement between the: British and American industries; their difficulties are going to; increase. In March they are, going to Neiv York with Sir Henry L. French, direc- tor general of the British Film Producers Assn., to discuss problems of mut,ual concern with their American counter- parts. They will talk mainly of the strained relations ex- : isting between the two industries in a frank and earnest endeavor to overcome the present situation. : I Mietro, 20th aa Prod. Aid | With the abolition of the renters' quota, American-spon- sored production in Britain is naturally curtailed, but were it not for .such-companies as Metro and 20th-FoXi' both of which, are carrying out Important programs, that the situ- ation in British studios would be-at its worst. Activities of these and other American companies, wliich are ab- ; sorbing some of their frozen coin in British production venturesi has avoided a big catastrophe. But notwithstandr ing their voluntary efforts, they are being blamed for not doing more, and there is many a Member of Parliament who would cheerfully hold the American-industry respon- sible for the grave situation at home. Under the terms of the Anglo-American agreement con- cluded earlier in the year between, Harold, Wilson and Eric Johnston, provision was made for the spending of frozen assets. The permitted total of $17,000,000 for the entire American industry is divided up on a proportional basis, depending on the turnover of indiWdual companies. The surpluses can be spent in a variety of ways but so far the only choice has been in production. Twentieth- Fox has allocated all its iced assets in an ambitious pro- gram, M-G-M: is even -going over the lim-it, and other com- ' panies such as Columbia are working along more modest lines. Therefore, to blacie the American distributors-for- - not:doing what they ar^Tiot 'ooliged to do is Symptomatic^ of the-present situation In Britain today. . Inevitably the troubles on the production side are re- flected in the exhibiting industry. From the outset ex- hibitors have never disguised their dislike of the 45% quota, which to them-'has always been anathema. Despite the mass reliefs proferred by the Board of Trade, there are going to be a large number of def aults which wiU.l>e-made up of two categories: those Tirho cannot get British, prod-' uct at all and those who can only get it at a price. The "have nots" who fall into the first classification will have a strong defense if challenged by the Board of Trade as, after all, they can hardly be expected to show product which is not available. In the other category, however, are the exhibitors who have been campaigning during the past few months against "onerous" film-hire terms charged by : some British'distributing companies. Indie exhibs who have a quota to fulfill cannot see the logic of meeting that obligation if by doing so they are involved In a direct financial loss. That is the crux of the negotiations which have been dragging on since Bank ad- . dressed the Cinematograph : Exhibitors Assn;'s general council last July. Britain needs American product. That point is con- ceded even by the bittere.st enemies of Hollywood. The plight of British theatres was more than demonstrated when American product was cut off, and it would be idlp to suggest that home industry could •be kept going with Britisl> product alone. Only too well ik it realized that nothing short of a miracle will provide the product avail'^ •ble to pull through the quota. Otherwise stalemate: may lead to checkmate, and checkmate may clearly spell disas- ter for tht British induitry.