Variety (March 1959)

Wednesday, March ll t 1959 PtiauEfr PICTURES 3 YOUNGSTEIN RAPS JOHNSTON Wall St Responds To Three Issues New York stock market was a ..robust one for three film compa¬ nies last week. Significant gains were made by United Artists,;,Par¬ amount and 20th-Fox. United Artists' shot up to a new high of $29.75 per share, from a low of $15.25 and closed the week at $28.75 for a rise of $2.75. F. Eberstadt & Co., underwriters for the UA stock, said the company is progressing in “satisfactory” fash¬ ion but indicated no unusual de¬ velopments. UA execs similarly were surprised^ However, there was a definite reason for the price spurt. Arnold Bernhard & Co., publishers of the Value Line in¬ vestment analysis sheet, put out a strongly favorable special report on UA and this sent the investors into action. Twentieth-Fox rose $2 per shafe last Wednesday (4) as word got around that the big real estate deal with the William Zeckendorf interests neared the closing stage (with 20th to collect close to $60,- 000,000 for Coast property. Week’s gain fell to 87^c per share as profit-takers went to work, the is¬ sue closing the week at $39.37^£. Paramount climbed to a new high of $50.75, from a low of $30.62^, closing the week at $50.37 per share for a increase of $3.12. Par activity was spurred by the now-cooking Par deal to buy the Ansco division of General Ani¬ line & Film Corp. in a new and attractive diversification deal, sale of some of the Par stock in Famous Players Canadian and per¬ haps another capital gains maneu¬ ver which has been rumored about generally but with the specifics undisclosed. SIow-to-Enthiise Gentry Of Wall Street, Though Film Issues Do Well Wall Street analysts appear to be a diehard group. With rare ex¬ ceptions the research experts have taken a dim view of motion pic¬ ture stocks over the past year, but the fact is that these same issues have risen over the same period a good deal more than the entire New York Stock Exchange average. The professional appraisers— not to be considered are the brok¬ ers particularly close to the film industry—persist in expressing the * view that films are too much risk, that the national picture audience continues to dwindle. Some, how- . ever, are awakening- to the fact that a single picture can convert a profits statement from deep red to fancy black. ■ FEWER 1959 'STARTS’; 29 VS: 42 LAST YEAR Hollywood, March 10. That growing production hur- die, difficulty in casting and un- •; availability of certain stars, has ; caused Hollywood film production !. to drop 30% this year as against the same period in 1958. To date only 29 features have hit cameras, : compared to last year’s 42 starters. Among the majors, Paramount Is only studio to show an upbeat, ; with four pix having gone into . work as against three last year. Columbia follows with four this year to date, five last year; 20th- Fox, two-four; Metro, two-five; Allied Artists, two-five; Warner Bros, one-two. Nat Sanders Sales-Chiefs Davis’ United M. P. Org Nat Sanders has become general sales manager for Richard Davis’ United Motion Picture Organiza¬ tion. Sanders resigned from Times Film Corp. to take the posi¬ tion. At UMPO he succeeds George Roth. Sanders has been at Times Film only briefly. He succeeded William Shelton at that outfit. UA ’s'‘No Review 5 Terms Scare Exhibs; Distribs Say Too Many Theatres Welsh SPEAKS FOR SELF, By HY HOLLINGER A new rigid sales policy, about to be initiated by United Artists, may well Serve as the first serious challenge to confront the American I Congress of Exhibitors. Reports mentioning a UA intention to sell upcoming pictures, starting with “Some Like It Hot,” at pre-estab¬ lished percentage terms with ab¬ solutely “no review” have been sputtering the exhibitor grapevine since the film company held its second recent sales convention in Miami Beach, Theatremen in some territories have already been notified of UA’s new rigid policy, it’s believed. Contemplated inauguration of this “no look” sales plan, has primed some exhibitor leaders to muster opposition in the hope of convincing UA to retract before policy is officially launched. In¬ formal approaches have been made to S. H. Fabian, chairman of the ‘Congress of Exhibitors, to learn if the new over-all exhibitor or¬ ganization should intervene and at¬ tempt to do something. There is a strong feeling among some the¬ atremen that the problem of UA’s | new policy rightly belongs in the -j domain of the Congress which, it’s emphasized, ought to act as the ] spokesman for “all” exhibitors. things.” “Anything that has to do with the function of exhibition on a national basis should be within the scope of the Congress,” de¬ clared one exhibitor spokesman. He firmly believes that UA’s new pol¬ icy has national ramifications. A similar “no look”, policy set down by Metro several years ago for “High Society” and “I’ll Cry Tomorrow” resulted in the film company’s loss of its longtime sta¬ tus as the “friendly company,” a position it has since wooed back by deciding to ease up on its terms under a new sales manager. How¬ ever, some exhibitors contend that Metro let several million dollars "go down the drain” because “rig¬ idity” on the two pictures. It’s claimed that many theatres “skipped” the films rather than play them on M-G’s terms. ‘Open-Eyed Cheating?* From the standpoint of the dis¬ tributors—and UA in this case— there are Indications that the film companies are becoming increas¬ ingly annoyed by the laxity of the¬ atremen in making payments and in living up to contract terms. In recent years, it’s charged by dis¬ tributors, exhibitors have failed to comply with the licensing contracts j and have paid the distribs any per- J centage they (the exhibitors) deemed advisable, many times without consulting the film com¬ panies. that “it’s the only way I can get the picture when I want it.” Distribs maintain that they can -take these cases to court on the basis of the signed contracts. How¬ ever, they have failed to do so be¬ cause of the fear of losing good¬ will. There are signs, however, that some film companies, which feel they have been burned by ex¬ hibitors setting their own terms, are prepared to take legal acti6n with some of the more blatant of¬ fenders. With production costs of the so- called blockbuster entries hitting new highs, the distribs feel they are entitled to the agreed-upon terms. Said one distribution chief who has become increasingly ir¬ ritated at the loose manner in which some exhibitors are meeting their obligations: “I’m getting tired of having exhibitors pay me what they think a picture is worth. I’m going to set the terms on the basis of what I think the picture should bring in. I don’t care if .it’s 25%, 50% or 75%, but on what¬ ever terms the exhibitor agrees to play the picture, that’s the per¬ centage I want.” Some distribs allege that the¬ atremen have been revising terms on their own even though they have emerged with a profit, ex¬ plaining .their action cn the ground that the profit was insufficient. The UA test, if it is successful, may well set a pattern for the in¬ dustry as a whole. That’s why many theatremen are anxious for the American Congress of Exhibi¬ tors to take a leading and forcefui role in preventing the introduction and spread of the “no look” pol'cy. Schism Will Damage | If the Congress fails to take any j action in the matter, a schism in j The contracts usually are firm the ranks of the new organization I agreements many exhibitors♦ have is predicted, particularly since a | —distribs now argue—signed them number of exhibitor leaders be- without the slightest intention of lieve that one of the purposes of I meeting the terms. The excuse C. of E. t is “to talk about these ' employed by these theatremen is Ezell’s 42 Ozoners Dallas, March 10. Claude Ezell and Associates of Dallas, has purchased the Lone Star Drive-In from James Riggs. Joe Wood will be retained as manager. Ezell, who pioneered the drive-in theatre biz in Texas, operates a total of 42 ozoners, the largest chain of open air theatres in the nation. In ad¬ dition to the Lone Star, Ezell and Associates operate six other ozoners in the city. Alden to Gobble List Industries Directors of List Industries (RKO Theatres, et al.) and the Glen Alden Corp., which is one of the nation’s biggest producers of hard coal, have approved a merger. Alden will be the surviving corpo¬ ration if it goes through. Merger plans were set a year ago but were upset by stockholder objections. New plan, which again is subject to a stockholder okay, calls for the issuance of five new Alden shares of -the present stock now outstanding, and one new Alden share for each present List share out. Stockholders of both outfits of record on March 10 will be en¬ titled to vote. List and Alden are not strangers, a List subsidiary having owned 39% of the Alden Stock for some time. In addition to the RKO chain, List’s interests include textiles, oil and gas and automotive parts. The List* company, which is headed by Albert A. List, last week reported earnings of $3,277,000,765 for the year ended Dec, 31, com¬ pared with $1,540,461 for 1957. Im¬ provement in the theatre business the second half of 1958 contributed to the operating upbeat, said List. Joseph Maternati, head of the French Film Office in N.Y., Coast¬ ing for confabs with several of the studios who are interested in French production. Maternati will stay for some days. Picker as Prexy, Friedman Chairs Loew s Thaetres Separation of Loew’s Theatres from Loew’s Inc. has resulted in a realignment of the top manage¬ ment of the theatre company. Leopold Friedman, who has been president of Loew’s Theatres since Joseph R. Vogel shifted over to the top post of Loew’s Inc. in 1956, becomes senior officer and chair¬ man of the board. Eugene Picker, recently named -executive v.p., moves up to the presidency of the theatre circuit and chief exec¬ utive officer. John F. Murphy, vice president, assumes the post of executive v.p. Two new veepees were also named—Ernest Emer- ling, pub-ad chief, and Arthur M. Tolchin, head of the theatre com¬ pany’s radio subsidiary, station ’ WMGM.N..Y. Friedman, Picker and Murphy continue as members of the board of the new theatre company. The other board members are George Baker, president of National Air¬ lines; Thomas J. Connellan, re¬ tired v.p. of the First National City Bank of New York, and Thomas L. Norton, dean of the New York U. School of Commerce. The last three named were origi¬ nally approved for election by the N. Y. Federal Court. All top management officials of the theatre company are veterans of "the Loew’s organization. Fried¬ man started in the legal depart¬ ment of Loew’s Theatrical Enter¬ prises and became secretary when Loew’s Inc. was formed in 191*9. He became a director in the 1920’s and a v.p. in 1945. WPh the phy¬ sical separation of the theatre divi¬ sion from the production-distribu¬ tion arm in 1954, he was named! financial v.p., treasurer a- d a di¬ rector of the ther 4 re subsidiary. He succeeded Vo^el in the presi¬ dency in Oct, 1956. Irv Levin Still Trying San Franc coo, la’ ch 10. San Francisco ^i’m Festival will be held at the l.COO-seat Metro Theatre Nov. 11-24, says director Irving M. Levin. Levin, who is also president of the Northern California Theatre Assn., c 1 charted last weekend for Washington TOA meeting and then will head to New York for talks with Eric Johnston office and at¬ tempts to rourd up additional support for 1959 Frisco Fes¬ tival. Loew s Divorce: Two Listings Separation of Loew’s Inc. and Loew’s Theatres into two individ¬ ual companies becomes official to¬ morrow (Thurs.). Trading on a regular basis in the new shares of both companies will begin on the New York Stock Exchange on Fri¬ day (13). The split is in accordance with the plan approved by the stock¬ holders and the Federal Court. Loew’s thus becomes the last of the major film companies w'hich have been forced to divorce thea¬ tre interests from production-dis¬ tribution under terms of a Gov¬ ernment consent decree. As is customary, advance trad¬ ing in the shares of both compa¬ nies on what is termed “a when issued basis” began on Monday (9). This permitted the immediate exe¬ cution of buy or sell orders for the shares of common stock of either company, but certificates for the shares so traded need not be delivered before March 18. Antici¬ pation of the final split resulted in considerable activity in Loew’s Inc. shares during last wee. Prices quoted by brokers Mon¬ day (9) were 34 for Loew’s Inc. and 12 or Loew’s Theatres. This is apparently based on the value of two shares of the old stock in the combined company. Latter closed at about 23 on Friday (6>, making two shares worth 46. For every two shares owned in the prior-to- (Continued on page 21) By FRED HIFT More aggressive leadership on the part of the Motion Picture Assn, of America in industry prob¬ lems, and better MPAA liaison with the exhibitors, was urged in Manhattan last week by Max E. Youngstein, United Artists v.p. Youngstein, stressing that he was speaking for himself and not for his partners in UA, was sharp¬ ly critical of MPAA prez Eric Johnston who, he charged, had failed to exercise leadership at a critical time on such vital issues as censorship and the move to re¬ examine the antitrust decrees in the light of today’s economic sit¬ uation. Since he feels that MPAA is do¬ ing little for the industry. Young- stein said he—personally—saw no advantage in UA membership in the Association “now or ever.” However, he candidly added, “my partners feel otherwise.” In Youngstein’s view, Johnston’s lack of leadership is partly to blame for many of today’s prob¬ lems besetting the industry. “The film business lost out to television by default,” he maintained. “This whole thing could have ’ been in¬ telligently planned and, if this had been done, ro exhibitor would have been hurt.” To the argument that Johnston appeared handi¬ capped by a good deal of “individ¬ ualism” on the part of the compa¬ nies, Youngstein replied: “If he can’t handle it then let him resign. We need a man in that spot who isn’t just a front man for the busi¬ ness. but who devotes himself to it 100% and every minute of the day.” His Viewpoint Youngstein held that the three greatest liabilities of the industry today are (1.) Television. (2.) The antitrust decrees. (3.) The Johnston office. “As economic conditions change, our situation with-resoect to the decree ought to change too,” he argued. “The exhibitors want ,to know’ their sources of supply and the distributors w’ant to know w’ho is the customer. “If I as United Artists know’ who my customer is then I can adver¬ tise more effectively and at half the price. There’s a continuity of publicity then. Look at what this current situation has done to the drive for new faces. There was a time when we were able to launch pictures and build stars. Today, every exhibitor asks ‘Who’s in it?* and that’s that. On 75% of the dates we don’t get back the adver¬ tising money we spend. “That’s a situation w’here an Eric Johnston, with his prestige in Washington, could assert him¬ self and do some good. And it can’t be done in consultation with the same two or three company presidents. He’s get to hear from —and listen to—men like Si Fa¬ bian and Gene Picker. They shouldn’t just be invited to air their views once in a while. They should be_ in on the planning from the start.” Being in charge of UA’s ad-pub and exploitation activities on a global basis, Youngstein has : been having his problems with MPAA via the Advertising Code. Battle erupted over the “Anna Lucasta” ads and, again recently, when MPAA banned the “Naked Maja” ad. “How can they object to an ad, and turn it down, without even seeing the film,” he asked bitter¬ ly. The ad shows the Goya paint¬ ing of the Duchess of Alba reclin¬ ing on a couch in the nude. Russell Films Inc. has been formed by Texas heir Frank Rus¬ sell 2d and Dr. Russell Irwin for nrodirt’on of three low-medium budget features this year, former age^t John Anderson to act as producer.