Variety (Mar 1949)

Wiidneflday, Mawfc 30, 1949 nCTIJItBS EXHIBS' YARDSTICK ON RENTAI^' Factioiial Maneuvers in UA Dickers Sidelight to the current negotiations for sale of United Artists Is the jockeying for position by top management execs Grad Sears and Arthur W. Kelly. Sears, UA's prexy, is reportedly closely aligned with the Nasser brothers.and pushing for consummation of a deal with them, since they reportedly hold him in high esteem and he would continue to dominate the management of the com- pany under their ownership. On the other hand, Kelly, exec v.p., who reps partner Charles Chaplin in the sale, is by the latter fact put in a highly contradic- tory position. If he successfully negotiates the sale of the company for Chaplin he is almost certainly negotiating himself out of a job, since it is unlikely that he would stay on jf Chaplin had no further interest in UA. It is reported that for that reason Kelly has been endeavoring to line up a sale with a buyer Who would permit him to purchase a small piece of UA, and insure his continued associa- tion with the company. Sears, it is believed, would remain with the distribution outfit no matter which of the varied buyers took it over. One of the reasons is that it is figured it would cost almost $1,000,000 to buy up his contract. He has about 2Vi years to go on his five-year pact and an arrangement whereby the company must pay him for 10 years after its expiration. s. Aside from that, however, the UA prexy is generally held in high esteetn, Degree of poA*er . he would continue to hold in general policy of the company, however, would undoubtedly vary with different buyers. It would be greatest with the Nassers in control and probably least if the Si Fabian-Ted Gamble syndicate bought up the Chaplin-Mary Pickford stock. LJabianjind Gamble contemplate Gamble's taking over the presi- dehcy. Jtn that case, Sears would no doubt revert to v.p. in charge of distribution. That is the job his contract calls for. He was upped to the presidency when Edward C. Raftery left. Nassers Have Inside on UA Deal; Even Setting Up Prod. Financing James E. and George Nasser aii-4 peared definitely to have taken the lead this week as the United Art- ists sweepstakes continued in high gear. Nassour Brothers, the SI Fabian-Ted Gamble and, Edward Small syndicates all were showing continued interest in talking a deal to Acquire ownership of the com- pany, but were confused and re- sentful over what was going on on the inside track whlclv was appar- ently held by the Nas.sers. _ Sam Wiesenthal, Nasser's . rep, who has. been in New York for sev- eral weeks, has not only been han- dling negotiations for purchase, of the Mary Pickford-Charles Chap- . lin stock,.but has been-setttng-up- credits for production if-and-whcn the Nassers acquire UA. It is un- derstood that among deals he has made is one by which the Ideal Laboratories, N. y., would advance cash and lab credits to indies who might make pix for UA under the new ownership. In the meantime, Fabian and : Gamble were somewhat burned over the fact that they had had no Word in several weeks on their of- fer and request for an option. And Edward Nassour, in New York, stated he was just sitting by, wail- ing for the woods to cleftr of other negotiations before he .slopped in with a firm offer. Small, on the Coast, is understood to be a minor contender. One of his partners in (Continued on page 18) Splitup Into 2 Cos. Poses Novel Legal Points on Contracts , Hollywood, March 29. The Paramount splitup into wo companies, carrying with it the dissolution of the parent or- ganization, is presenting a knotty question to Par's studio legalites. " IS understood that thfe fadeout of the parent company automati- cally terminates a number of Par's employment contracts with stars, producers, directors and other stu- dio emfiloyees. .In the main the question is tech- nical, since both sides will un-j ooubtedly renew pacts signed by we new production-distribution ■company. However, the tegalites are asking what the score would If either the company or any tract wants an out on the eon- Reason for the novel out is that *?™e of the contracts include a standard clause which terminates jne relationship on dissolution* of we company. It is a provision in- r,°'P^/»tpd in many employment "CKets \(ithout any particular sig- nmcanee being attached to it genr . (V^ontinued on page 14) Conciliation Blues New Jersey Allied, after blasting 20th's proposal to hoist rentals. In a lengthy statement, wound up by say- ing: "It is evident that (Andy) Smith's conciliation boards will be very busy from now on." C. Skouras Backs Upped Rentals For Top Films Hollywood, March 29. Instructions by Charles P. Skouras/ head of National The- atres, to his aides to support the majors' drive for higher film rent- als has raised plenty of distrib eyebrows. District and theatre managers at NT's FWC Southern California .division were told to "give all'good pictures all the film rental they can get." NT, heretofore, has been a tough nut to crack on rental terms. Skouras, in a change of pace, said he believes theatres must support worthy pix if studios are to con- tinue making them. While major distribS may not always agree with Skouras on what constitutes proper rental, he de- clared he has a strong talking point in amount of rental paid (Continued on page 18) BEHIND YEN TO PRODUCE 01 PIX A movement is growing-among large indie circuit operators for an invasion of- the production-dis- tribution domain, heretofore large- ly ruled by the major companies. Sentiment for the creation of a new company,: owned strictly by exhibs throughout the country, is so strong that bigtime exhibs are now predicting It as an inevitable development within six' months' time. In their eyes, the chief pur- pose of the organization would be as a measuring-stick to hold- tlie majors in line on film rentals. The maneuvers of SI Fabian. Ted Gamble and other undisclosed principals for control of United Artists was aimed more as a way of keeping rentals "within reason,'' judged, of course, by exhibition standards,, than: to propel the syn- dicate into 'lush profit-taking as producers-atid-distribs—W-ith-those- maneuvers still fruitless, it is re- garded as more than probable that circuit ops will turn to the forma- tion of a new company. Sparking the movement-^and making it more likely—is the, now current push by 20th-Fox for high- er rentals and the indications that other majors are heading in the same direction. Theatre men frankly disbelieve the majors' con- tention that a more "equitable'* share of the film dollar must : go to distribution. They are convinced that the distribs are making more than is admitted in print and that production costs have not yet been brought within reasonable bounds. Check on Costs These convictions, it is: under- stood, have spurred the idea of set- ting up a measuring-stick. The big circuit ops want a company of their own so that they can have a constant check on the production nut claimed for pix and the as- serted costs of distribution of ma- jor product, By reference to their own overhead and outlays, these exhibs would be in a favorable po^ -sition- to-argue-r-ental* 20th s Drive for B^ger Returns Seen Developing Sniilariy for Other Cos. ♦ The big drive by 20th-Fox to hoist film rentals another 25% shows signs of diey^lopiiig iiito a^^ offensive by all the majors for bigger returns to distribution. While 20th is the only outfit to openly trumpet its objectives, in- dications this week point to a determination by the other v com- panies to stay abreast the growing, battle. The entire industry is gear- ing for what may be the bitterest exhib-distrib fracas in many years. Plans have been quietly formu- lated by all other majors to shove; rentals to a level which would again "restore the balance of profits in the industry." That de- termination is whetted by the : threatened loss of theatre interest.<i and" the' knowledge that the distrib wing is now the vital segment of major company activities. On the other hand, the caiQpaign ■ ■ i.s expected to touch ott ah un- precedented string of attacks from exhib organizations. With the growing \. tension, every theatre ' group, ranging from Allied to The- atre Owners of America, will line up in an effort to stave off the distrib assault on rentals. Already the opening gun has been fired in the form of a challenge by Har- ry Brandt's. Independent Theatre Owners of America to 20th's Spy- ros Skouras, Al Liclitman and Andy W. Smith, Jr., for a full-dress debate. ,■■ Exhib organziations' reaction to I the 20th announeiement of a rental: „ , , ... , , ; boost proved as instantaneous as it Crackmg back at mdependent | „,as inevitable. In a string of ex- plosions, five groups riddled the campaign in bulletins circulated ': : (Continued on page 20) 20th Into Action In line with its drive for a 25% boost in rentals, 20th- Fox: swung into drastic action this week. Several large east- ern circuits have been advised that all bookings of 20th prod- uct must be specifically nego- tiated on terms where licens- ■ ing contracts have not yet been signed. These exhibs have been asked to cancel their play- dates on films of 20th which have been pencilled in, pend- ing these negotiations. Old terms for the pix^ where not specifically inked in contracts, are no longer applicable and new ones must be worked out, circuit toppers have been in- formed. It is customary to -book-pix-in advance-on-recog-- nized terms and then Iron out details: when . licensing deals are inked. Brandt s Beefs On Rental Hikes Are laughable': 20th The -new -exhib-conttolled outfit would also give these theatre men a whiphold on production. Once in a position where employees of the company were negotiating for indie product, or that made on the lot, exhibs with access to the com- pany's books would have a better knowledge of what the ma.tors are (Continued on page 14) Indie Producer Sues Rep. on Distrib Deal Columbus, O., March 29. ' John K. Teaford & Co., inde- pendent producer of Union City, O., filed a .$1,800,000 breach-of- contract suit in Franklin county common plea.s court Friday. (25) against Republic Pictures. Firm claims it gave an exclu.sive contract to Republic to distribute several of the Teaford-made films and that $1,800,000 in profits have never been handed over. "Only two pix were mentioned in the petition, "Winter Wonderland" and "The French Key." Teaford con- tended it financed and produced these films. Petition also charged that Republic refuses to give Tea- ford an accounting. Suit was brought into Franklin county courts via a technical law procedure which permits the Tea- ford firm to attach Republic prop- erty in Ohio. RKO Realignment Brings . 8 Changes in N. Y. Area Realignment of RKO division managers this week will see eight changes in the N. Y. metropolitan area and upstate N. Y. Michael Eaelstein, formerly in N. Y., is be- ing brought down from Rochester- Syracuse district to handle the Palace, Fordham, Coliseum, Re- gent, Alhambra and Hamilton, in New York City. Lee Koken, who had charge of the last four-named houses, has been placed perma- nently in charge of concessions de- partment.: He formerly handled much of this activity along with the four theatres. Sol Sorkin, manager of the Flushing, goes to Syracuse as city manager. H. R. Emde, division manager, who formerly handled Newark, Union. City, the 86th Street, 125th St., and Palace, also will have added to his lineup the Chester and Franklin in the Bronx. Sigurd Wexco has the Flushing added to his setup. Charles Oelrich, who has been in the Bronx, goes to Brooklyn where he will have the Kenmore, Tilj'ou, Shore Road, Republic, Prospect and Dyker. . Harry Weiss, Brooklyn division manager, is upped to division i manager of theatres in Minnesota land Iowa, headquartering in Min- I neapolis. Robert Whalen stays as his assistant. Under the changes. John Hearns will have the 81st Street, 23d St., I Colonial, Pelham, Castle Hill and ' Marble Hill. All the shifts involve division managers: excepting Sor- kin, Who was Flushing mstnagec. • exhibitors who lost little time in labeling 20th-Fox's new drive for Increased rentals a "brass-knuckle", routine, a top 20th spokesman de- clared this week that "there is so much justice on our side in this argument that it's almost laugh- able." At the same time, he I .stressed that 20th, in trying to re- align the splitup of profits be- tween distribution and exhibition for the ficst time since the industry has been stabilized. Is pacii^ ' One of-the most._imj>ortant_ancL-far^ .reaching Jnno.vaViQns_yet_to hit the I film business. New 20th veepee Al Lichtman,' who's spearheading the 20th drive for boosted rentals in conjunction with sales veepee Andy W. Smith, Jr., and ad-publicity veepee Charles Einfeld, meanwhile, singled out Ni Y. indie circuit operator Harry Brandt for one of the most, severe tongue-drubbings ever handed an exhibitor by a distribution topper. Speaking on his arrival yesterday (Tues.) in Philadelphia for another series of roundtable discussions with exhibs in that city, Lichtman accused Brandt of wearing the brass knuckles, "judging from the advantageous deals he has been: making for himself, or else he has been using ehloroform on the film salesmen." Referring to Brandt's blast earlier in the' week against the "unconscionable, arbitrary and un N.Y. Court Approves 20th-Fox Settlement Vs. C. P. Skouras, et al A referee's settlement of the long-pending minority stockholder actions brought against 20th-Fox. its wholly owned subsidiary, Na-"- tiohal Theatres, and some 15 in- dividual defendants was approved Monday (29) by N.Y. Supreme Court Justice Ferdinand Pecora as a "fair and reasonable" adjust- ment. Court held that the best interests of the stockholders would be better served by approval and it therefore 'granted a motion to- confirm the Referee Jacob Demov'? report. ■ Terms of th^ settlement call for defendants Elmer C. Roden, Frank P. "Rick" Ricketson, Jr., Harold .1. Fitzgerald and Charles P. Skou- ras, all execs of NT'and its sub- sidiaries, to relinquish claims ' for percentage compensation totalling not less than $1,750,000 due them under employment contracts. An amendment^of Skouras' pact is also expected to result in a saving of an additional $1,750,000 over a fair pricing of films by 20th'Fox," i seven-year period starting in .1948. Lichtman retaliated: "This is Justice Pecora pointed out in his startling in view of the fact that paper that all 20th-Fox stockholders we have not met with the exhibi- were apprised of the issues involved tors nor officially with Mr. Brandt in the actions as well as the text and thus had an opportunity to dis close our plans to them. From inquiries I have made regarding accounts in our New York ex- change, I have been Informed that,| Brandt has been buying for him-i self and his booking combine at ridiculously low prices." of the settlement offer. A sub- sequent hearing resulted in only nine stockholders, owning, a 'total of 658^ shares, who protested the . • (Continued on page 20) Ed Grainger to Do Semi-Doc on Iwo Jlma Edmund Grainger, who recently produced Republic's "Wake of the 'Hamlet' Awards Fail To Help U on Ghi Dates Chicago, March 29. Although "Hamlet" won double Academy awards, Uiiiversai ex- change here is unable to catch cream that usually accompanies tfr- Red Witch," feels that story trends run of films in Loop houses. Win- in the industry "don't, mean a ' ner was pulled out of Apollo after thing." For the public, he main- 17 weeks, with Balaban & Katz cir- tains, is ripe for good entertain-1 cuit bringing in two reissued last ment and the way that the subject I week. matter is presented is what counts j According to Jackson Park de- in the final analysis. 1 cree, which was modified for road- Prior to returning to the Coast; show of "Hamlet," court permiii- last week after a week's stay in ; sion must be granted for another' New York, Grainger revealed he's i Loop showing. Tom McConnell, now working on a semi-documen- tary which will deal with the U. S. Marines' South Pacific battles. To be tagged "The Sands of Iwo Jima,' the film is expected td roll in June could appear, attorney , for the Jackson Park, is hospitalized, and it is likely that any such request to the federal court, would be postponed until he