Variety (December 1954)

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MV<1ne»<lay, December 1 5, 1*54 PICTURES 11 ARBITRATION SYSTEM SET-BUT Reade Group in Legal Bout With Damis Partners Over Drive-Ins’ Buy Hardtop theatres may be diffi-<f cult to dispose of these days but fhat doesn’t hold true with respect to ozoners. For Walter Reade The- atres and a group headed by Frank j Damis. who resigns Jan. 1 as supervisor of Stanley Warner The- atres in Northern New Jersey, are tussling over who has the right to take over the Eastern Drive-In Corp. and its seven fresh-airers in the north Jersey area. Heade organization which thought their deal to acquire Eastern was in the bag at one time, is suing Eastern for $1,000,000 damages in a breach of contract action brought in Superior Court, Trenton, N.J. Instead of turning over the chain to it. the Reade circuit charges, de- fendants James J. Thompson, Monroe E. Stein and William Scully reneged and sold out to Damis' syndicate. With trial of the suit scheduled for Jan. 17 in Trenton, Reade con- tends that no purchase can be con- summated until the action is set- tled. On the other hand Damis claims that he and his associates bought all seven ozoners two months ago and expressed con- fidence that no hitches would arise in the acquisition. From another source it was learned that while the contract is signed transfer of title is not to take place until Jan. 1. In contesting the sale to the Damis’ group, Reade asserts that the defendants had virtually turn- ed over the drive-ins to it but “we were defrauded into postponing the signing." Plaintiff seeks a rul- ing to compel Eastern to convey title or in lieu of that $1,000,000 damages. Defense recently moved for dismissal of the suit on the ground that the complaint was “without merit” but the court de- nied the motion and set a trial date. Reade’s legal maneuver was characterized by a spokesman for Eastern this week as “totally with- out merit" and brought “solely for the purpose of disrupting the pres- ent deal.” While purchase price in- volved in the transaction could not be learned, trade circles feel that such a sale would call for an in- vestment “well over $1,000,000.” Associated with Damis in his at- tempted Eastern purchase are Ben, Emanuel. Sheldon Smerling and Charles Stern of Confection Cab- inet Corp. Latter outfit ooerates candy concessions in a number of theatres and also services vending machines. After stepping out of his longtime Stanley Warner post, Damis will assume active manage- ment of the Eastern loop. In addi- tion he’ll be v.p. of Confection Cabinet. Seven Eastern ozoners include Route 22 in Union, Route 10, Mor- ris Plain: Route 46, Totowa; Route L New Brunswick; Paramus Drive- In as well as The Shore and Fly- In. both in Farmingdale. In event the Damis takeover is consummat- ed he will move Eastern's admin- istrative headquarters from N.Y. Repping Reade in the legal tilt is Arnold Krakower. Humer'rtt Max Sliulman has authored a bright vigaette The Imperfect Squelch * * * another editorial feature in the forthcoming 49 th Anniversary IS umber of DUE SOON any truth in reports? That Distrib-Exhlb Relations Im- prove— Allied Investigates Allied States Assn. Is preparing a survey of its regional units to determine if conditions have im- pioved in the trade relationships exhibitors and distribu- . , The results of the survey will what action Allied’s <ud will take in reference to the proposed bill for Federal Trade industr SS 0n regulation of the film i" easur e, prepared by Allied CLnual counsel Abram F. Myers, menu * tS t!? ted and approved by the S ership at the exhib org’s na- i on. 1 convention at Milwaukee in (tober. The membership, how- t kon ? 0ved , f hat no action be thJ ? !? ekin * introduction of "r,i',' n , Co ?« ress until the board Ptov ? n K d r lf condit, °ns had im- Th<> i ^ before its next meeting. Louil d meetS ln Februar y at St. Grainger Names 12 Due Via RKO Hollywood, Dec. 14. James R. Grainger, RKO presi- dent, declares that the company is in the “strongest, most mobile po- sition” that it has enjoyed since Howard Hughes took control, with six independent producers ready to turn out a minimum of 12 quality pictures in 1955. Lineup includes Edmund Grain- ger Productions with “The Treas- ure of Pancho Villa” and “Oh, Promised Land”; Benedict Bo- geaus. with “Escape to Burma” just completed and an untitled Barbara Stanwyck starrer starting in Feb- ruary; David Butler with “Miracle at Santa Anita”; King Bros, with “The Boy and the Bull” and “The Two-Headed Spy”; Nat Holt with “Seven Bad Men” finished and a second film starting in six weeks, and Sol Lesser with Tarzan’s "Hid- den Treasure” completed and an- other feature to follow. After nearly fight years of meet- ings, agitation and pressuring for and against, a system of arbitra- tion of film industry disputes ap- pears near (or almost) at hand. One of the key points agreed to by film companies and a group of theatremen is that complainant exhib parties to any proceeding will be entitled to collect, as a maximum, the equivalent of double their actual adjudged damages for the period of two years prior to their filing the arbitration com- plaint. Accord on this and various other issues has been reached among negotiators for the Motion Picture Assn, of America and’ Theatre Own- ers of America. Although TOA so far has been the only theatre or- ganization to participate in the huddled with MPAA, all theatre- men will be privileged to avail themselves of the arbitration machinery as it is established. Agreement so far has been in broad, oral form. It’s now the job of reps of both MPAA (meaning all the principal film companies) and TOA to reduce this to writing. While all parties to any arbi- trated matter will pay specified fees, actually the distributors will underwrite the expense of the setup. This provides for the or- ganization of arbiter panels in each area comprised of one repre- sentative each from exhibition, distribution and a so-called neutral source. The physical facilities of the American Arbitration Assn, will be used but AAA itself will not be a part of the arbitration function. Arbitrable Issues Arbitrable matters reportedly agreed to include all questions of runs, clearances and pre-releascs. Importantly among these is whether a theatreman is entitled to bargain for films on a first-run basis in his area. Significantly ex- cluded is how' much the distributor charges for film. Allied States (Continued on page 24* Pursuing Anew That Elusive Unity, But Where’s the Boat Big Enough To Hold AD Exhibs—Myers, Too? SIMFF Ffxy Ellis Arnall details why and how The Seven Lean Years Are Over * * * an interesting editorial feature in tlin forthcoming 49th Anniversary ISumber of DUE SOON 1 + Can the Utopia of exhibitor unity, and in a larger sense any true industry unity ever be truly achieved? The pessimists, and there are quite a few habitual ones in the business, are of course denying any such goal—even the compara- tively limited one of exhib solidar- ity—is unattainable for reasons both practical and imagined. But, without there being any sign of definitive action on an ex- hib get together, indications are multiplying that industry crises are bringing theatremen closer to- gether than ever. And there have, of late, been more calls for a unit- ed exhibition stand than ever be- fore. One of the outstanding facts, as men with their fingers close to exhibition pulse see it, is the basic change taking place in the busi- ness, a change which started with larger screens and is ending up with fewer but bigger pictures. “The product shortage," widely decried by exhibitors; the basic concern about the continued flow of the stuff that makes the b.o. tick is making many exhibition leaders realize the futility of the split in exhibition ranks. There have been two recent ex- been taken as yet to organize such a session. The sales managers of the com- panies affiliated with the Motion Picture Assn, of America met two weeks ago to discuss the machinery for setting up the session. Aim of the proposed meet was to thrash out the many trade differences that is resulting in the current (Continued on page 26) Economical Toll-TV Needs Wavelengths USE OF LINES AS IN THEATRE—TV TOO COSTLY—ADVOCATES AND OPPONENTS TAKING THEIR ARGUMENTS TO PUBLIC—MEANWHILE FCC STILL STALLS Friends and foes of toll-tv, still without knowl- edge as to the exact time or method of a Federal Communications Commission move to handle the hot subscription video issue, are taking their battle out into the open and to the public. Exhibition’s Joint Committee on toll-tv in N. Y. last week reiterated its position re pay-as-you-see and also promised a drive to “inform the public of the true facts” about the new proposed medium. Zenith Radio Corp. spokesmen on the other hand were busy looking for support among both the pub- lic and industry. Millard C. Faught, Zenith’s east- ern economic consultant and perennial toll-tv praiser, spoke before the Ad Club in Hartford, and legit theatre interests were told of the benefits tee-tv might have in store- for them. Coincidentally, Ralph Bellamy, Actors Equity prez, spoke his piece —favoring toll-tv—in an article in Theatre Arts Magazine which has since been reproduced as paid ads in the trade press. Exhibition’s position, as voiced by Trueman Rembusch of Allied, one of the cochairmen of the toll-tv committee, boiled down to this: Theatremen are concerned lest the pay-as-you-see broadcasters establish themselves in a preferred economic posi- tion which, they maintain, may be tantamount to a monopoly in communications. Therefore, exhibs will fight to see that, should toll-tv be authorized, this be done “on the same economic basis as the- atre-tv.” No Special Franchise! By this they mean that the FCC should not au- thorize use of “free” air channels for anything but telecasts on the present commercial basis. “This committee has no objections to toll-tv” as long as it’s being done the same way as theatre-tv, i.e., via lines to each individual set, Rembusch maintained. Argument that the expenses involved would make any such system uneconomic is being shrugged off by the theatremen as they continue their battle to preserve freedom of the airwaves. Rembusch and Theatre Owners of America coun- sel Herman Levy revealed that the committee had retained the law firm of Marks Sc Cohn as its coun- sel in Washington to prepare a protest to the FCC on the question of authorizing pay-as-you-see on the That AD-Problem Confab Got Lost Theatre Owners of America will attempt to hold talks w'ith the dis- tribution companies on an indi- vidual basis if the proposed all-industry confab fails to ma- terialize. The idea for an all- industry meet, proposed recently by 20th-Fox sales chief A1 Licht- man, received enthusiastic backing from all segments of the industry. However, no concrete steps have j pressions along those lines. One came from S. H. Fabian. In a speech in Oklahoma City he as- serted that one big exhibitor or- ganization would move the indus- try five years'ahead in its thinking on the basis of only six months of concentrated effort. Were a refer- endum taken today, “our theatre owners would be overwhelmingly in favor of one central organiza- tion.” In Memphis, Tenn., last week, E. D. Martin, president of Theatre Owners of America, stated: “There is no reason why exhibitors should not unite and present a solid front for we all have the same prob- lems.” He called for “an end to the civil war that is sapping our strength and join together if we are to be effective.” That exhibs can. and will, work together harmoniously once con- vinced of the urgency of the cause has been demonstrated on various occasions. They pulled together in the fight to reduce the Federal in- come tax; and they now slcwrd to- gether. without division, on the is- sue of subscription-tv as witnessed by the press conference held at TOA headquarters in N. Y. last week by Allied’s Trueman Rem- busch. one of the cochairmen of exhibition’s Committee on Toll-Tv. While there are few exhibitor leaders who will not give lip serv- ice to the principles of theatre harmony, it r s felt in certain quar- ters that there are two prime ele- ments standing in the way of unity. One is the simple but honest dif- ference between “the little fellow” and “the big guy.” “They just don’t have the same interests when it comes to the everyday running of the business.” one exhibition leader commented. “No more so than the owner of a shoe factory has anything much more than shoes in common with the little shoemaker store around the corner.” The other big factor standing in the way of exhibitor unity is a human and not easily definable one. Impression is gained that, in Allied at least, even if the mem- bership were to favor unification of exhibition under one roof, the org’s leadership—and more specif- ically Allied counsel and board chairman, Abram F. Myers, wouldn’t allow It. Such comment comes not only from men in the rival camp, but also from observ- ers who might be called objective in every way. present proposed basis. Meanwhile, the committee has asked the Commission to delay any decision re the Zenith application which asked for immediate authorization of its Phonevision system, without a hearing. It was pointed out by Rembusch and others on the exhib committee that, should subscription-tv be operated on a closed-circuit basis, same as theatre- tv, it could go into operation immediately without the need for FCC okay. I Exhibs Raise Battle Fund ! The exhib toll-tv group is going to raise funds to carry on its fight and will invite advertising agen- cies and other interested parties to work along with it. Theatres plan to bring the issue to the public’s attention “as best we know.” It was admitted that this might well include use of theatre screens. Exhibs particularly resent toll-tv’s claim that it can remain a supplementary service, pointing out that, in one-station markets, use of the air for fee-tv would automatically deprive viewers who don’t want to pay off their chance to tune in on “free" shows. It’s pointed out further that the Zenith reference to its Chicago test is misleading since the outfit since then has switched to other “over-the- air” systems. | Bring Product To Audience In his Hartford speech, Faught maintained that toll-tv would provide “an instantaneous economical electronic distribution system" and that such a modern service was “acutely needed” since the present obsolete merchandising methods of most “cultural commodities” requiring a boxoflice fee are dependent on moving the audience to the prod- uct instead of delivering the product to the audi- ence. He stressed, too, that the new subscription service would be an addition, not a substitute to regular sponsored tv and would double the number of tv stations economically supportable in the U. S. Exhibition’s toll-tv committee is centering i' . fire primarily on the Zenith application due to its time aspect. Once the FCC has made It clear just what it has in mind, th; application filed by Matthew Fox for Skiatron-TV also will undergo exhib scrutiny.