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| FCC EXAMINER RECOMMENDS * APPROVAL OF UPT-ABC MERGER F^ Favorable Commission Ruling Seen Leading To Films-TV 'Marriage' WASHINGTON—The merger of United Paramount Theatres and American Broadcasting Co. was approved by Leo Resnick, Federal Communications Commission hearing examiner, on Thursday (13) in an initial decision granting all applications involved in the sweeping catch-all case. Resnick declared that DuMont was not controlled by Paramount in the sense of FCC's five-station maximum ownership rule, and granted licenses to Paramount for its Los Angeles TV station, KTLA, and to DuMont for its existing three stations, as well as opening the way for DuMont to apply for two additional TV outlets. STATION TRANSFERS GRANTED Resnick swept away the arguments to the effect that Paramount should have applied for permission to transfer its 50 per cent interest in radio station WSMB and its ownership of WBKB-TV from the corporation dissolved under the consent decree to the new theatre company, United Paramount Theatres. He granted consent to these transfers and then proceeded to authorize sale of WBKB-TV, Balaban & Katz Chicago station, from United Paramount Theatres to CBS. WBKB had been sold by UPT to CBS for $6,000,000, contingent upon FCC approval of the UPT-ABC merger. ABC's four exisiting television stations in Los Angeles, San Francisco, Chicago and New York under the initial decision can be transferred from ABC to the new American Broadcasting-Paramount Theatres and Chicago and New York radio stations now operated by ABC as well as UPT's WSMB and WXYZ, and ABC wholly owned subsidiary radio and TV station in Detroit. On the merger issue, Resnick found that although ABC has been "aggressive" in obtaining affiliations and in pioneering "certain practices," it has been unable to compete effectively with NBC and CBS in either radio or television. ABC has neither the working capital nor the "diversity of revenue-producing activities," he found. The merger would provide capital for strengthening of ABC programming, and hence would create competition in the network field. DENIES ANY MONOPOLY Re.snick denied that the merged company could dominate the field by virtue of its size, and said radio corporation would still "dwarf" the merged company. He found no merit in the fear that UPT seeks the merger to suppress television development because "pursuing such a course would have only a relatively minor adverse affect on television, would cripple UPT financially, and would produce only a minute increase in attendance at UPT's own theatres." External competition will compel the merged company to promote vigorously its activities, particularly in radio and television, Theatre TV Hearings Delayed to Jan. 26 WASHINGTON — The Federal Communications Commission on Thursday (13) postponed the main body of the hearings on theatre television licenses for the motion picture industry from January 12 to January 26. The FCC explained that witnesses have been unable to obtain hotel reservations because of the January 20 inauguration of General Eisenhower as President. The commission also announced that the proposed spectrum locations for theaare TV channels as outlined by the film industry witnesses in the recently concluded engineering phase of the hearings, have been made part of the issues to be argued in the principal hearings in January. During the hearings the industry put forth several alternative frequencies as feasible for theatre television, including some now allocated to common carriers, such as American Telephone and Telegraph. Resnick argued. Failure to follow this course would mean lack of audience for the radio and television stations and more patrons in the theatres. As to competition for produce, Resnick said that in his opinion theatres and television will not be competing for the same films. The producers will not sell films to television until sponsors can pay as much as theatres, and in any case the trend is away from use of theatre films on TV. Even in the field of films specially made for TV the "majors" may find their late start dooming them to a minor place in the field. UPT's $30,000,000 annual gross purchases of films did not impress Resnick when coupled with the argument that it might be used to gain discriminatory advantages. In view of consent judgement's requirement that pictures be licensed picture by picture and futhermore, "is to make no package deals for theatre and television . . . We cannot credit with reasonable probability any suggestion that an unfair competitive advantage might accrue to ABC in the purchase of films, as a result of being associated with UPT." Resnick did not believe that competition between home and theatre TV and between free and pay-as-you-see TV could well be considered since the competitive situations involved are "too remote and spectulative." "ABC-UPT is legally, technically, financially and otherwi.se qualified to be a licensee of tlie commission. Its officers, and directors are likewise qualified," Resnick found, and said, "There is no rea.sonable probability that the merger will substantially lessen competition or tend to monopoly in any .section of the country or in any line of commerce." Resnick, dealing with the question of whether Paramount pictures exerts any con trol over DuMont found that Paramount doe own all the 560,000 shares of DuMont's clas B stock and 43,200 shares of 2.4 per cent o its class A. "However, the extensive investi gation conducted into the 'actualities' of th(, Paramount-DuMont relationship, particularh: in recent years, discloses that under tht'A leadership of Dr. DuMont, the class A officersjl and directors dominate the corporate man- ' agement and policy of the DuMont organization and that the veto power possessed by : Paramount, as the class B stockholder, hai'tj not been exercised and is applicable to a limited class of situations not likely to occur ij in the foreseeable future." Resnick said that Paramount and DuMonti have no joint operations and are, in fact,! competitive in some fields. NOT FORCED BY DECREE As to the failure of Paramount to seek FCC! -I permission to transfer of its television and! radio properties from the old company to the: new theatre company after the consent de-, cree, Resnick did not agree with Paramount's contention that the transfers were forced byj the consent decree and hence were involuntary, but did not feel under circumstances of transfer that "the failure to provide formal! notices of transfers . . . should operate as a| bar ..." ' Resnick felt that the failure might "bci explained by the preoccupation of the Para-I mount people with the tremendously com-1 plicated and deadhne-studded problems of. the reorganization and divestiture ..." Resnick, in granting Paramount a licensej operate KTLA-TV. which has been under to temporary authority as have the DuMont; stations pending settlement of the control: issue, said he was "impressed" with Para-i mount's compliance with the consent decree. He said, "We have a reasonable expectation': which the Para- that the antitrust activities mount people are abandoning in the unregulated field of motion picture distribution will not be imported into the licensed field of broadcasting." MAY SET A PRECEDENT Paramount has no policy restricting sale of films for showing on television, nor do they prohibit their established stars from appearing. Sponsors can't compete price-wise with tlieatres and "other things complicating the question of release of these films are the restrictive agreements imposed upon the major producers by the American Federation of Musicians and the various guilds, and the uncertain status of television rights to some of the feature films." Accordingly, Resnick found Paramount and its officers fully qualified to be FCC licensees, a decision which, if not reversed by the full commission, will open tlie doors to oilier film companies wliicli have been entangled in antitrust actions. FCC's broadcast bureau is regarded as certain to appeal to tlie full commission for a reversal of Resnick's initial decision, but it is believed that the commission will uphold Resnick. 8 BOXOFFICE November 15, 1953
, tlon . Allied ; large I I morning I I equipment kL S ARBITRATION, TRADE PRACTICES ;ft! 70 BE NO. 1 ON ALLIED AGENDA To Discuss Cole Proposal On Leaders Quitting All-Industry Jobs C.'iCACio Cul. H. A. Cole's recommendation that Allied leaders resign certain all-Industry jobs to devote full atten- 10 independent exhibitor grievances will be Kivcn prime consideration at the November 15-17 Allied board meeting, to be held at the Morrison hotel in Chicago in advance of the convention, according to an agenda made public by Abram F. Myers. general counsel and board chairman. Arbitration and trade practices take up a part of the agenda. The time of the board meeting's start was advanced from Saturday afternoon to 10:30 a. m. in order to handle the controversial topics involved. However, the agenda says that the Saturday meetings will deal with less controversial topics, because some of the directors will be unable to arrive until afternoon. The agenda released may be added to. or subjects may be stricken, it was emphasized. KIRSCH TO BE KEYNOTER Wilbur Snaper. National Allied president, will preside over all sessions. Jack Kirsch, president of Illinois Allied and chairman of the general convention committee will start things off with a welcome, after which the agenda will be approved. Then comes the formal waiver of the regular summer board meeting. The convention committee's preliminary report on preparations for the national committee, number of reservations, estimates of receipts and expenditures, etc., and formulation of a detailed convention program will wind up the preliminaries before the fireworks. Colonel Cole's idea for "protecting the interests of the independent exhibitors who are being gouged by unconscionable film rentals. trade practices, etc." leads off in this section. On the general topic of fUm prices, trade practices, and related subjects, there will be report.s by directors on conditions in their respective territories. Wilbur Snaper will pre- Record Allied Attendance Is Foreseen by Kirsch CHICAGO—Advance registration figures for the National Allied Theatres' convention, to be held at the Morrison hotel starting Monday, November 17, are giving the lie to dire predictions circulating in recent years about the motion picture industry. Over 780 independent theatres owners from 32 states and the ) District of Columbia already have reserved rooms for the convention, which will be held in conjunction with a giant tradeshow^ A total attendance I of well over 1,000, greatest in the history of the industry, was forecast by Jack Kirsch, president of Allied Theatres of Illinois, general convention chairman. A. F. Myers Ben Marcus John Wolfberg -sent a statement concerning his work as coordinator of AUied's film committee and especially present attitude of sales heads toward complaints and applications for relief. There will be consideration of proposed remedies, including appeals to appropriate committees of Congress. It is explained on the agenda that "in connection with film prices, final action in reference to "prerelease" pictures, advanced admission prices and competitive bidding should be deferred until arbitration has t)een considered." Arbitration is the next topic, with consideration of the distributors' draft along with the report and recommendations of AUied's arbitration negotiating committee scheduled. Next on agenda is "further instructions, if any. to the committee." with a footnote recalling that present instructions were adopted at Colorado Springs last May, and expressed regret for "appMent unwillingness of distributors to agree to an all-inclusive plan along lines favored by Allied, together with instructions to AUied's committee to continue negotiating for such a plan. Approval or rejection of the plan is scheduled in the event the board does not adopt such further instructions. Allied's membership on COMPO. whether it should be renewed and if so for how long, is next on the agenda. Present membership expires unless renewed at this board meeting. Trueman T. Rembusch. one of the top COMPO triumvirate, will report on the doings of the organization. Colonel Cole, co-chairman of COMPO's tax committee will present a picture of the situation with respect to admissions tax repeal. Rembusch will offer a statement in reference to U) a proposed Hollywood Round Table and (2) the outlook for further Movietime activity. Rembusch will give a report on the status ;th , >A Ihv Kcdcriil C '» thPBtrr tclcvLilon ! : • ';:nat« of the tj'^i'- .ccCA» 111 the • .< II part of the | '- Wi Increa-slng or abating It will kitk itruund Eric John-ston'.i TOA speech Indicating that film companies could maintain their Income by making .special film.s for TV. during a general dLscas-slon of the .situation cauxed by production by film companlea of attractlon-s to coropi I. .,!. the alrwavc.i with theatre boxofflce, rtif KDvernment's lemm .suit is also .scheduled for consideration. Next on the list Ls a suggestion that unit* desiring state fair exhibits make Joint application to Hollywood on a .sharc-cxpen.se basis, and that Hollywood create a permanent display to be transported from place to place by truck and operate on a aelf-.supportlng basis. The board will dLscuss "compact procedure for exchanging information between territories." It will look into complaints of high prices and poor .service on the part of National Screen Service and the suggestion that film companies guarantee delivery of paper and trailers, or at least help In the procurement thereof from National Screen. TO TALK ON ASCAP FEES Slated for discussion are "Ascap's demands for royalty payment on public performances of copyrighted music not recorded on entertainment film"; a report by Nathan 'Vamlns concerning experiences of New England exhibitors at hearings before the commussioner of public safety involving the use of acetate film, and methods employed by an experienced Kan.sas City exhibitor to maintain good order and good deportment in his theatre. Wilbur Snaper wiU describe his "sensations" on viewing Cinerama. There wiU be an open forum containing all suggestions received up until November 1. including aU matters of general interest not on the agenda. Ben Marcus, or somebody designated by him. will deUver a report on ways and means for increasing revenues of regional associations during "The current boxofflce recession" by distribution of fan magsudnes and other activities consistent with and beneficial to the film Industry. Cinerama Heads Discuss Problems on the Coast NEW YORK—Cinerama Productions Corp. expansion plans are up for discussion on the coa-st. Dudley Roberts, president: Frank Smith. vice-president, and L>-nn Farnol, public relations director, went to the coast over the weekend for talks with Louis B. Mayer, chairman of the board, and Merian C. Cooper, general manager of production. How to get the projection system Into more theatres as weU as production plans are the current problems. Max Oendel. theatre publicity, is in Chicago studying mstallation posslbUiUes. He hopes to have a theatre ready for a Januar}' showing. BOXOFFICE :: November 15, 1952
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NOVEMBER

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