Variety (August 1950)

Wednesday, August 9, 1950 PICTURES YANKS EYE BRIT. m ia,Suh.. London, Aug. 8. Burst of righteous indignation by Ellis G. Arnall, plus the for- tunate and timely intervention of the U. S. Embassy here were the only two reasons the’'American team here to negotiate a new Brit- ish film monetary agreement was able to go home with any pact at all. Harold Wilson, prez of the British Board of Trade, had calmly told the four-man U. S. delegation,, after it had already been in England for several weeks, thjit he was going off on a vacation and that if they cared to wait around a couple more weeks he'd talk to them again. That was just one day before the Yanks were pre- paring to go home. Arnall, repping the Society of Independent Motion Picture Pro- ducers in the negotiations, blew up. Already convinced by th at time that Wilson was using “wearing down” tactics, Amall explod- ed that the B. of T. topper was being mighty cavalier with a dele- gation that had come 3,000 miles to see him. The force of the outburst in ArnalTs Georgia drawl apparently took Wilson aback and changed the tone of the talks. Whether it would have done much good, however, is doubtful if at the same time Ambassador Lewis Douglas had not also strongly protested. As a result, negotiations were completed within a matter of hours on a plan which the Americans had developed during the weeks of waiting for Wilson to find time to talk with them. Metro’s long-running battle on rental terms with two big circuits, Skouras Theatres and Mike Naify’s United California chain, ended peacefully this week. The major will immediately renew bookings. Reportedly, the hassle with the George SkoUraS outfit faded be- cause of the personal intervention of Spyros Skouras, 20th-Fox prez, who shares an interest in the circuit with his brothers George and Charles. On the Coast, the Naify tiff ended after three years, with Joseph Schenck; 50% owner in the chain, said to have thrown in his weight for peace. Metro had been selling away from Skouras houses for the past year. Company took . that action after the circuit objected to the company’s sales policy, which re- quired a minimum guarantee of 25% on percentage films, It is said that the Skouras outfit has now agreed to meet that requirement. Metro was adamant because a change in that provision would have weakened its position with other exhibs. Two reconciliations give Metro the healthiest outlook, so far as the number of accounts are concerned, in many years. Approximately 300 houses are covered by- the two (Continued on page 63) Republic Eyes Future With Juve Cowpokes Hollywood, Aug. 8. Republic is bringing up cowboys in a juvenile oater series, starting with “Buckaroo Sheriff of Texas,” with the top roles played by a pair of kids, Michael Chapin and Eilene Janssen, Idea is to rear them as future saddle stars. Part of the profits will go to the Na- tional Kids Day Foundation, Rudy Ralston will be associate producer of the series, with Phil Ford as director. Net for U Seen Thrash Out Final Points As*Talks Go Into Stretch Hollywood, Aug. 8. The Jerry Wald-Norman Krasna production deal with RKO is in its final week of negotiating period, with both parties putting “final touches” to about 10 key points of the 110-point contract. It’s expected that; Hughes per- sonally will sit in oh Wednesday (9) talks, with controls of budgets, stories and casting still to be ironed out as well as “protection” for W-K from delayed decisions by RKO execs which might prevent taking advantage of opportune deals. If deal is not wound up by Sat- urday night p (12), Wald-Krasna have right to negotiate with other studios. It's understood several majors are standing by waiting tire outcome, and prepared to make offers if RKO deal doesn’t jell, ‘BABE RUTH STORY' Hollywood, Aug. 8. Monogram’s “The Babe Ruth Story,”, one of the Company’s heaviest grossers, will be reissued on a large scale in Japan, where the memory of the late Yankee out- fielder has been highly regarded ever since he toured there with an American ball club in the ’2Qs. Norton V. Ritchey, president of Monogram International, is on his way to Tokyo to huddle with Jap- anese distribs* , Full-scale recovery has now been marked by Universal, with the company doing its top business ih many years during the past six- seven weeks. A steady rise of gross rentals reached its peak last week when U garnered close to $1,300,000 at the end of a 15-week, sales drive. Company has done over $700,000 for each stanza in late June and the entire month of July. For the third fiscal quarter which ended July 31, it is expected that the company will show up with a net profit of nearly $1,000,000. This would represent a tremendous jump from bpth the second quarter net of $272,270 and the first quar- ter’s $12,924. In 1949, at the close of the third quarter, U was in the- red for $775,018, It wound up the year with a loss of $1,125,- 851. During the past week “Winches- ter ’73” alone brought over $250,- 000 into U’s coffers, previously, company’s big moneymaker: was “Francis,” which buoyed returns for many weeks. Company also expects heavy grosses from “Louisa,” just starting its rounds in the theatres. Prospects for United World Films, its 16m and Video subsid, are also brightening, While this unit has- not been turning in ; any sizable payments, it is now begin- ning to pay off its $2,000,000 bank loan on which U is guarantor. First installment of $500,000 has been made. It is expected that UWF will be able to retire the loan on its own earnings. While the new. British film pact has won wide approval in prin- ciple artfongU.* S. distribs, room is seen for plenty' of argument among the majprs on filling in the per- centage blanks that were left in the bonus clauses of the agreement. However, , it is not expected that the discussions will become so heated that they in any way will jeopardize final consummation of the deal, Feeling, as indicated at a preliminary meeting of the Mo- tion Picture Export Assn, board, last week, is that the agreement in principle is a very favorable one. Seven companies* gave their Okay at*once at a session in New York and three others (United Artists, Columbia and Republic) signified their approval later. A Second hurdle still to be faced is the reaction of Hollywood labor to the accord. One of the provisions is an incentive plan for encourag- ing American production in Eng- land.. Holly wood's guilds and crafts objected strenuously to this before and may still make themselves heard loudly enough to bring about some changes-^-or. at least some tacit understandings with Yank studios—on this angle of the pact. Labor is in a peculiarly strong position at the moment as a result of a bit of mystery that developed while the American negotiating team was in London. That’s the sudden interest of the U.S. State Dept, in the talks. It was almost purely a result of the strong posi- tion taken by Ambassador Lewis Douglas that the favorable agree- ment was reached. The Big Switch Neither Eric Johnston nor Ellis G. Arnall could account for Wash- ington’s interest. Both the Motion Society of Independent Motion Picture Producers prexies had spoken to State frequently, particu- larly Arnall, but had never been able to engender more than apa- thetic attention. More recently, Hollywood labor groups have had their reps at work in D.C. Thus, it is suspected by MPAA and SIMPP that that may account for the Change of heart. If so, it would also indicate that the laborites could put sufficient pres- sure on State to frown to the British on the incentive angle of the deal and possibly force a change.. Production incentive is only one of three bonus plans included in the agreement and on which diffi- culties promise to arise in MPAA councils. The three schemes to- | gether will provide a bonus of $2,000,000 based on activity equal to that in the past, Greater activity could send it to $4,000,000 or even more. That would be added to the (Continued oh page 20) Important Switch New British monetary, agree- ment retains the incentive plan for U. S. production in Eng- land that Yank distribs and labor strenuously objected to *When originally offered by the British last May. There is, however, One all-important modification. Original provided a penalty if production was less than in the past' and a bonus if it was more, so that the basic $17,- 000,000 of Convertibility could theoretically have been re- duced to as low as $13,000,000. New agreement continues the $17,000,000 base figure, but eliminates the penalty provi- sion. Bonus is still included, so that the only way that con- vertibility can go is Up. Revised; merger under which Joseph Bernhard, head of Film Classics, would salvage some stock interest in Eagle Lion Classics, de facto company handling FC and Eagle Lion product, is shaping as a possibility. Talks between Wil- liam C. MacMillen, ELC head and exec veepee of EL, and Irving Kaufman, assignee for the benefit of FC creditors, have taken a new course which may lead to the changed setup. Heretofore, chances of Bernhard remaining in the new company under a merger were very Slim. Pointing up the fact that the dis- cussions have a very long way to go, MacMillen this Week ordered his bfanch offices to halt all sell- ing on some 20 films which- his company has been handling for FC. All prior playdates will be serviced but no new ones taken. MacMillen (Continued on page 22) With departure of Paul N. Laz- arus, Jr., United Artists’ new man- agement way reportedly stepping up its efforts this week to line up a hew general sales manager; Infor- mal feelers have been sent out to a number of distribution men, but the response, as far as can be learned, has been slim. Potential candidates for the post, are loathe to consider it without assurances as to the future of the Company. They’ve been given no more information than the indus- try in general on the deal by which a group headed by Paul V. McNutt and Mary Pickford have obtained control of UA, Minus any dope on the status of the company beyond reports of .confusion currently caused by loss of all its top manpower, no one is anxious to step into the breach. Only job that the r new ^manage- ment has been able to fill so far is that of exec v.p., which was taken over last week by C. J. (Pat) Scol- lard, who left Paramount the pre- vious week after 11 years of han- dling labor relations and other ad- ministrative chores. Another important factor in slowing the company’s quest for manpower is understood to be the salary brackets in which it is thinking. It is reported that the fee at which it wants to hire a sales chief is arourid $500 to $600 a week —considerably below the going rate for a major company. Meantime, there were growing indications- 1 —arid convictions—that the McNutt deal was not as orig- inally pictured. While the details have been kept determinedly hazy by board chairman McNutt, it has been learned on good authority that the .change of management was a maneuver rather than a bona fide purchase of control of the corpora- tion from Miss Pickford and Charles Chaplin; While no new money has come in (Continued on page 20) Col’s 2 Military Pix Hollywood, Aug. 8, Columbia is readying two mili- tary pictures to make hay while the war- clouds loom. Their titles are “The Flying Jeeps” and “Pentagon.” Robert Cohn, producer, left for Washington With synopses of the two yarns for perusal by the war officials in the Pentagon. MAN-0-WAR AT POST AGAIN Sid Luft, indie producer and husband of actress Lynn Bari, is readying a film to be based upon the career of the famed turf Champ, “Man-O-War.” Previously publicist Arnold Stoltz had also announced plans for a similar venture. . American companies expect to achieve 100% conversion of their British earnings. under the. new Anglo-U. S. film agreement worked out last week. They anticipate that there will be nothing left frozen out of the approximately $38,000,000 which is looked for in Britain during the 12 months be- ginning Oct. 1. New agreement, with its $17,000,- 000 guarantee of convertibility, plus a system of bonuses, may give them as high as $21,000,000 in cash out of the United Kingdom. Pro- duction in England, purchase of American rights to British films, manufacture of prints, payrolls and the long list of other uses to which earnings may be put are expected to chew up the other $17,000,000 ! in earnings. j The $38,000,000 figure for the I period beginning Oct. 1, when the I new one-year pact becomes effec- tive, is an estimate, of course. It j is based on earnings for the latest l period on which statistics are 'available, the 12 months ending July 1. Net was between $34,000,- 000 and $35,000,000. Hypo in that amount is antici- pated for a number of reasons. First is an improvement in general economic conditions in Britain. Second is that the quota will be reduced on Oct. 1 to 30%, giving more playing time to Hollywood product/ Thirdly t J; Arthur Rank has tremendously sliced his produc- tion program and so is not putting so much pressure on his Odeori and Gaumont-British chains to, play -his- product to the exclusion of that from abroad. Frozen Funds Using up all their frozen funds in Britain would be no novelty to most U S, distribs, since they ac- complished almost that under the two-year agreement that was to have expired June 13 but is be- ing continued in force until Oct. 1. The only company that had any sizable balance as of June 13 was (Continued on page 9) Atlas Retains Interest In UP Theatres After Prod. Distrib Sale Atlas Corp., Floyd B. Odium’s investment firm, is holding on to its stock interest in United Para- mount theatres after selling its slice in the Paramount production- distribution company. Previously the owner of a block of 50,000 shares in the old pre-diVorcement major, Atlas has followed the court mandate against dual ownership by unloading the production-dis- trib stock. It still owns 25,000 shares of UP common, according | to the half-year financial report of the investment firm. Company’s interest in UP is es- timated at $409,375 against $1,100,- 000 for its block in the old Par unit. Otherwise, the Atlas interests in entertainment stocks remained virtually unchanged during the six month* Atlas still has a big stake in Walt Disney Productions, in which it. retains 93>050 shares of common (market value $558,300) arid $308,500 in principal amount in Disney’s 4% “A” bonds (valued at $246,800), Some 234,012 RKO stock Options which expired Jan, 31 are no long- er carried on the books. These options had a nominal value of $3,- 656 at the beginning of the year. Only other entertainment stock is 20,000 shares of Madison Square Garden Corp. priced at $190,000. Net income for Atlas during the six months was $11,551,994. Earned surplus is figured at $27,712,061. RKO MUST PAY 25G IN PLAGIARISM SUIT Hollywood, Aug. 8. State supreme court has. ruled that RKO must pay Samuel R, Goldin and Norbert Faulkner $25,- 000 in their plagiarism suit against the studio. Pair had Claimed that RKOV “Ghost Ship” was a steal from their play, “Man and his Shadow.”