Variety (August 1949)

Aiignt< 31, 1»49 HcnniBS TEEN-AGERS AS ROAD TO B.O. Blumberg Explains U-Rank Deals; ‘|y](|5J pmiHf UL’ I®® Divorce Delay Aimed to Keep Export Assn. Views It as ‘Violation Company prexies. after hearing ♦ . defense by Universal topper' Nate Blumberg of his company’s recent deal with J. Arthur Rank, decided to throw to their lawyers the question of whether U violat- ed the Anglo-American agreement. U’s arrangement with Rank elimi- nates its payments into the “B Pool” and bids fair to mark finis to that facet of the British-U. S. pact. Meeting as the board of the Motion Picture Export Assn, in New York last Thursday (25). the company chieftains listened at length to the explanations by Blumberg of the deal by which U will offset earnings of Rank pix in this country by using its frozen , pounds to buy outright U. S. rights to them. Only exec who spoke out on the U side and backed Blumberg was Steve Broidy, prez of Monogram- Allied Artists. Rest generally took the attitude that U was violating the agreement, but there were none of the violent fireworks that were anticipated for the session— first one devoted to the subject since U foreign chief Joe Seidel- man made the deal on behalf of bis company. While the presidents were criti- cal of U on moral grounds, they admitted they were uncertain of the legalities involved. Thus, after the rather mild discussion, they agreed to turn the problem over to their lawyers with instructions to report back to them when they had decided whether U had violat- (Continued on page 22) Britain’s 50GG Payment Payment to the majors this week of $500,000 by Britain represents the entire amount which the companies will re- ceive for the earnings of British pix in America during the first year of the Anglo- American film pact. Sum, al- most in toto, was derived from what Universal remitted to J. Arthur Rank as the latter’s share of revenues on his prod- uct di.stributed in the U. S. by Universal. Of that total, larg- est part by far was derived from one film. Rank’s “Ham- let.” Since special deals which skirted the requirements of depositing earnings in the “B” pool were made by other distribs on British pix, prac- tically no monies except those remitted by U landed in the pool. Incidentally, with the $500,000 now paid, American companies took out a total of $17,500,000 from Britain from June 1, 1948, to June 1, 1949. TII[|IIII[CO[|IS ^ Theatre Earnings Atlas Maintains Hold As Largest Corporate Owner of Film Stock Floyd B. Odium’s Atlas Corp. held its ground over the past six j months as probably the largest sin- j gle corporate holder of film stock, i Still retaining sizable blocks of I both Paramount and Walt Di.sney Productions’ stock, semi-annual re- port of the Investment company, aired this week, discloses a $75,000 stock interest in N. Peter Rath- von’s Motion Picture Capital Corp. It is the first official statement of the Atlas interest in the recently formed unit, which bankrolls in- die production. Atlas motion picture holdings will be further boosted when RKO completes its reorganization under the anti-tpjst consent decree. Re- port shows that Atlas has com- mitted itself to acquire 69.300 shares of stock of the production- di.stribution unit on a “when, as «nd if issued” basis for $2.50,113. Shares are valued at $225,225. based on June 30 market quotes. In the half-year period, only sub- stantial change of Atlas’ film hold- ings is in RKO, Holding company’s •lice of RKO option warrants dipped from 317,812 owned at the end of 1948 to June 30 holdings of 234,012. Value slid even more drastically from a $258,222 figure on Jan. 1 to $43,877 on June 30. Optipns expire Jan. 31, 1950. Atlas continues as large.st single shareholder in Paramount with a block of 50,000 shares. It also nas 91,700 shares of Disney coin- nion. Par holdings are valued at •*;PI2.500; Disney shares at $355,- Investment outfit also holds JJisney Series “A” bonds with a [ace value of $308,500 and a mar- ket price of $228,290. Only other show’biz stock listed s 11,000 shares of Madi.son Square ['/[pen Corp. with a market tag 01 >103.125. As.set value of Atlas common on June 30 was estimated at $26.27 per share, representing a slight cchne from $27.18 per share as During the six- month stretch, two quarterly divi- uh^i P®** share were paid Ifai ^'^o^her is due Sept. 20, Cap- 40 *)surplus amount to $51.- j.-„’^b2’ of which earned surplus lor $16,737,875 and net 114 729 ^ appreciation for $4,- NLRB Orders 3 Union Elections Among Painters Hollyw'ood, Aug. 30. NLRB in Washington has or- dered three types of bargaining elections among studio painters. First Is for 10 major studios, calling for yes or no answer to question as to whether painters want repping by lATSE. Second, for painters working for independ- ent Motion Picture Producers Assn., gives voters choice of lA, Local 644 of painters, or no union. Third is for series of el.ght elec- tions by unafflliated studios, call- ing for yes or no to lA. Painters employed as of Aug. 26 w'ho belong to 644 will be per- mitted to vote in unaffiliated elec- tion. In show biz’ perennial quest for the secret of a hit, numerous film producers were pondering this w'eek whether the road to b.o. suc- cess might not be a direct and con- scious appeal to the teen-age audi- ence. They were viewing the some- what phenomenal grosses piled up in the past two weeks by Samuel Goldwyn’s “Roseanna McCoy,” and —since Goldwyn staffers them- selves admit “the picture is not that good”—wondering about the only explanation that theatre oper- ators have been able to give. 'That is that the ratio of teen-agers pa- tronizing “Roseanna” is out of all proportion to the usual average for their houses. Conclusion regarding responsi- bility of the high school and early college group for the film’s success fits in with two tenets long held by , Dr. George Gallup’s Audience Re-1 search, Inc. Its surveys haVe con- j sistcntly shown that the teen-agers are the mo.st frequent and faithful theatregoers and that, as a matter of fact, the 19-year-old group leads all others in attendance. The second Gallup point—one of which it has made something of a preachment—is that profits do not lie in a producer's knocking him- self out trying to get into the the.a- tre that portion of the public which infrequently buys a ticket or that doesn’t naturally take to his type pic. Producer can do much better, ARI claims, in spending the coin and extra steam on pitching to the natural easy-to-get group. Tougher to Get ’Em Post-30 That’s a switch on a stand that Eric Johnston, Motion Picture Assn, of America prexy, and many other industryites have taken as the result of another set of Gallup figures. These show that after 30, customers greatly slow* up in thea- (Continued on page 22) Howard Hughes is seeking a I delay in the divorcement dale for 1 RKO because the company, without j support of theatre earnings, will I show' a loss at the end of the year. The dominant stockholder in RKO is said to fear adverse stuck reper- cussions against his production- distribution company at the outset of its .solo activities unless it is given more time to overcome red- ink operations during the first half of the present year. His move for a postponement from the present Nov. 8 deadline, it is said, has little or no relation to his recent negotiations for the sale of his j own theatre stock holdings. I Hughes wants to avoid the decla- i ration of a loss at the close of 1949 because he is aware that in I an uncertain stock market the announcement may have immediate I effect in driving down the stock quotes. All profit returns of the company, as well as other majors going it without their theatre wing, i will be carefully studied by Wall street and other Interests. If the deadline is extended pa.st the first of next year, RKO will be able to make its usual consolidated report which merges both distribu- tion and theatre returns. Exhibi- tion end of the company in the first half year has come up with « J u • i 1 4 j a net of approximately $ 1 , 500 , 000 . Howard Hughes nix last week ' addition, theatre w'iiig took another $1,500,000 from the sale of its holdings in the Butterfield payment of capital Choo-Choo Cycle? That old hand at the throt- tle, Casey Jones, looks certain for celluloid immortalization. Warner Bros, last week be- came the fourth studio to get in line for a whack at a pic with that title. It has an origi- nal yarn on which it wants to hang the moniker of the famed engineer. Paramount got to the sta- tion first, however, according to Johnston office title regis- tration bureau, and has pri- ority with ownership of the original copyrighted yarn. It first registered it in 1938 and re registered it last June 16, RKO and Edward Small are also in line ahead of WB. Odium s Option On RKO llieatres Now in Dispute ITOA Petitions FCC For ’ Theatre Video Hearings ^ Theatre Owners of America has j petitioned the Federal Communi -1 ! cations Commission for public hearings on the assignment of ex elusive channels for theatre tele I vision, it was revealed yesterday (Tues.) by TOA exec director Gael Sullivan. Move follows a similar step taken recently by the I Motion Picture Assn, of America and presages an all-encompassing j IndustiT front for the allocation of ' such channels. TO.\ petition seeks no specific frequency a.ssignments to any sin- f gle exhibitor. Sullivan said, “but I endeavors to obtain recognition I by the FCC for the need of mak- ‘ ing an allocation so that exhib- itors, if they desire to do so in , the future, might apply for In- I dividual licenses.” Sullivan con- tinued : “This action was taken for the future protection of the industry in the development of this new medium, as well as profit if the developments in TV make it feasi- ble for us to participate in its growth. It involves no prc.scnt commitment on the part of 10.\ to rcque.st theatre TV frequencies as an organization, but seeks to protect its membership, and that of other exhibitors, from having all available channels assigned to other forms of communications without an opportunity of being ' heard. M-G Still Unsure On Appeal-Vogel Chicago, Aug. 30. Metro has yet to make up its mind on the important question of whether the company will appeal to the U. S. Supreme Court from the complete divorcement ordered against it, Joseph Vogel, Metro’s theatre chief, revealed here. At the time. Vogel indicated the like- lihood of an appeal. “We haven’t decided the ques- tion yet,” M-G theatre topper said. “Mr. Schenck (Nicholas M. Schenck. company prez) has had no chance to talk to Mr. Davis (John W. Davis, trial counsel) and it will take some time yet to make up our minds. “However, as a layman.” Vogel added, “I can hardly see that we won’t appeal. What have we ever done wrong in the operation of our theatres that has merited this decision against us?” Metro’s vote for or against ap- peal is considered the key to the entire question so far as the com- pany’s co-defendants, 20th-F’ox and Warner Bros., are concerned. Lat- ter two majors regard M-G in the stronge.st position and consider their chances nil if Metro decides against an appeal. British Filins Council Nixes 30 Oldies on Quota London, Aug. 30, Stiffening its attitude, the Films Council today (Tues.i flatly re- jected 30 of 32 old British films which had been submitted for ex- tended quota life. Board members are insisting that the pre.sent quota can be adequately met from new films. In a further “get tough” stance, the Council is also considering steps to prosecute a number of exhibitors who defaulted in the fiscal year w hich ended September, , 1948. ‘ of all offers for his RKO theatre stock has thrown into further dis- pute the option that Floyd Odium’s Atlas Corp. was granted on the shares. Lawyers are reportedly again in a hassle, this time over whether Atlas still holds the option to buy at $4,500,000 or whether that was wiped out by Odium’s refusal to meet the $6 a share bid $(5,575,- 000) of Stanley Meyer, Matty Fox, Cliff Work and their syndicate. In the meantime, the Meyer-Fox- Work combo has not lost heart over Hughes’ decision that he’ll “tem- porarily” listen to no offers. They are underscoring that “temporar- ily” and standing by to submit their bid when the RKO owner is ready to listen again. How soon that will be hinges on his success in efforts to get the Federal court to extend the deadline from next Nov. 8 the time he has to dispose of RKO’s theatre holdings. It is believed that the Meyer group has an understanding with Hughes that when the inevitable day comes that he must sell his cir- cuit stock—as per terms of the con- sent decree into which he entered with the Dept, of Justice—they will get a preferred whack at It. ’There is mutual friendship between Hughes and Meyer and no recrim- ination by the latter at Hughes’ nix (Continued on page 25) TV Buying Roach’s Oldies But Not New Video Pix Unable to get the price he w'ants for the 12 series of 26-minute TV films he planned, Hal Roach has temporarily shelved them to turn to one-minute spot commercial bus- [ Iness. Vet comedy producer is of-' fering his full studio facilities and J experience to agencies for the spots and has already turned out some for Ovaltine and Chevrolet. Roach has made a sample film for each of the 12 comedy series he was aiming for the TV market. They cost him about $10,000 each. He’s found, however, that there is not that much coin available yet. although he's willing to sell any of the series at cost, on a one-year basis. As a result, he is putting them aside until he feels the mar- ^ ket is big enough to support this type product. Roach’s studio on the Coast is now' given over to rental to a half- dozen or so TV producers. They’re far from making it pay for itself, but help him meet the overhead. ; He i.s also getting a large measure i of income from some 600 features j and shorts which he has made over ' a period of many years. Grace Rosenfield, his sal.se rep, is get- ting considerable revenue peddling i them to TV, 35m reissue and 16m. circuit. After gains taxes, the sale price will total over $1,000,000. On the other hand, distribution (Continued on page 25) Can. Nat’l Film Board Sees TV Sporting Film Prod.; Asks Budget Boost Montreal, Aug. 30. In a 25,000-word brief before the Royal Commission on Arts and Science la.st Wednesday (24), the National Film Board in Ottawa in- timated it ha.s no fear of the ad- vent of television in Canada. The NFB told the Commission that video programming would call for increased demand for film and that in Canada motion pictures would probably play a still greater part in television, partly Realise of the difficulty in obtaining live shows and partly becau.se of the lack of relay facilities. To meet this coming demand, the NFB claims its budget set in 1948 at $3,000,000 is not enough, and an increa.se must be made to expand the board’s scope and ac- tivity, to bring all of its scattered studios into one central building and to increase its staff, which now numbers 540. The NFB also disclosed that since 1943 it had been supplying both the United Kingdom and the U. S. video outlets with Canadian film. During 1948, 72 Canadian subjects were given television screenings 367 times. The Board is currently prep- ping a series of five telefilms for the Dominion Travel Bureau to be used through U. S. outlets to pro- mote greater tourist business. WB’s Five Indies Hollywood, Aug. 30. Warners will release a minimum of 11 indie films, made by five companies, on its 1949-50 program. Companies currently working on the lot are Br>’an Foy Productions, Cagney Productions. Norma Pro- ductions, Transatlantic Pictures Corp., and United States Pictures, Inc. Pictures in work or lined up by the indies are: Foy. “After Night- fall” and “The Gold Smuggling Story’.’; Cagney. “Only the Valiant” and “A Lion I.s in the Streets”; Norma. “The Hawk and the Arrow” and “The Naked and the Dead”; Transatlantic, “Stage Fright” and “I Confess” (in England), and United States Pictures. “Rock Bot- tom,” “Narrow Margin” and “Mur- der, Inc.”