Boxoffice-June.19.1948

BALABAN SAYS SEASONAL DROP
IS MORE PROLONGED THIS YEAR
Reveals Company's Plans
To Meet Divestiture,
If So Ordered
NEW YORK—Paramount theatre earnings
for the second quarter of 1948 have
been showing the same seasonal decUne as
occurred last year, Barney Balaban, Paramount's
president, told stockholders at the
annual meeting this week. But, he added,
the decline "is more intense and appears
to be more prolonged this year due, perhaps,
to the wider variety of diversions
which are now open to the public."
Last year Balaban in his annual report
revealed that while a decline in theatre
receipts had started in May, an upturn at
the boxoffice had been noted in the first
ten days of June.
VOLUME DROP IS SMALL
Altliough Paramount earnings for 1947 were
"the second highest for any year in our
history," Balaban said
that the appearance of
the "forbidding twins
—increased costs and
a diminished volume
of business" cut profits.
The drop in volume
was relatively
small, he said.
Paramount theatre
earnings held up much
better than those
from
production-distribution.
Although
theatre receipts were
Barney Balaban
down in about the same proportion as film
rentals, theatre operating costs increased less
than those in production-distribution, the
stockholders were told. He believes that each
branch of Paramount operations should stand
Allied 20th Anniversary
To Be Observed at N. O.
WASHINGTON — National Allied will
celebrate its 20th anniversary at the New
Orleans convention to be held November
29, 30 and December 1.
Allied was launched in the fall of 1928
and was formally organized in January,
1929. Tributes will be paid to the founders
and early leaders and scrolls will be prepared
for presentation to all past presidents.
Biographical and other historical
data is being gathered by regional leaders
and these will be compiled into a history
of Allied to be made available at the convention.
If there is any difficulty over obtaining
hotel accommodations, special trains may
be run by regional units or groups of
units and arrangements will be sought so
that the delegates can sleep in the Pullmans.
Britain's
45% Quota
'Worse Than Expected'
NEW YORK—The new British exhibitors'
quota of 45 per cent for the first
features and 25 per cent for short subpects
and supporting films to be imposed
October 1 is "worse than we expected,"
Barney Balaban, Paramount president,
told stockholders at the annual meeting
June 15. Balaban said he does not believe
that the British can produce enough
quality films to maintain that quota.
The Paramount president also discussed
the film tax settlement and said
that "while the terms of the agreement
are more favorable than the terms of the
ad valorem tax, the actual operating conditions
during the time the tax was in
effect were more favorable to us than the
situation now is under the agreement."
Paramount's net revenues from film
rentals in England were freely remitted
to this country in dollars up to June 14,
he said, but added that the company's
dollar revenues from England will be reduced
from this point on. Paramount
has studied the permissive provisions of
the agreement very carefully and may
utilize some of the blocked funds in production
of pictures in England, he said.
American talent and personnel, however,
must be used to give the pictures worldwide
appeal, he believes, and then these
components must be paid in dollars.
Paramount can use blocked funds for only
a limited number of pictures in England.
on its own feet and contribute earnings to
the whole enterprise.
"The uncertainty which is cast upon our
theatre holdings by the antitrust suit makes
it all the more necessary that each segment
of our business be maintained in an independently
healthy condition," Balaban said.
In 1946 Paramount recognized the trend
which has since become an actuality and the
company maintained strict control over inventory
during 1947. Excluding the inventory
acquired in the Rainbow and Liberty transactions.
Paramount achieved a reduction of
approximately $2,400,000 during the year.
Wages and salaries were largely unresponsive
to management efforts to effect a readjustment,
the executive pointed out.
TO FORCE TRANSITIONS
Balaban said the antitrust decision "will
force transformations within the industry."
Paranrount will be involved in those transformations,
he said. He believes that the
Paramount theatre interests will be reduced
with a corresponding reduction of the company's
earning power. If the assets and earning
power are to be reduced. Paramount will
take steps to compensate for that reduction
by shrinking the company's capital structure,
he said.
One stockholder urged Balaban not to sell
any of Paramount's theatre holdings, but to
form new corporations to save the assets for
the company. After applause from the other
assembled stockholders, Balaban said that he
would try to retail all the theatre holdings
permitted under the law.
Another stockholder arose to urge Balaban
to sell Paramount theatre holdings in the
event that television diminishes theatre attendance.
Balaban said television might wean
a few people away from theatres at first, as
did r^dio. Paramount entered television ten
years ago, he said, "in order that we would
have om- foot in the front door," and the
company now owns 29 per cent of the Du-
Mont shares, he said. He also mentioned the
film-television system developed by the company.
More than 82 per cent of the Paramount
stockholders were represented at the meeting,
either in person or by proxy. The stockholders
re-elected all 16 directors. In addition
to Balaban, they are: Stephen Callaghan,
Y. Prank Freeman, Harvey D. Gibson,
Leonard H. Goldenson, A. Conger Goodyear,
Stanton Griffis, Duncan G. Harris, John D.
Hertz, Austin C. Keough, Earl I. McClintock,
Maurice Newton, Charles M. Reagan, E. V.
Richards, Edwin L. Weisl and Adolph Zukor.
National Theatres Receipts
Decrease Around 15%
LOS ANGELES—Boxoffice takes throughout
the National Theatres circuit of 575 theatres
have slumped an average of 15 per cent
since the first of the year, but through implementation
of a policy of eliminating every
possible operational waste that drop in revenue
is being almost completely absorbed.
Such was the disclosm-e of George Bowser,
NT executive and general manager of one
NT subsidiary. Fox West Coast Theatres, upon
his return from an extended junket around
the entire National circuit.
•Tlu-ough a careful revision of operating
budgets. Bowser estimated NT will save approximately
$2,000,000 annually.
Twentieth-Fox to File
For 5th Tele Station
NEW YORK—Twentieth Century-Fox
will file its fifth apphcation with the
FCC for a television station construction
permit in St. Louis in a few days. This
will give the company applications for
the total number of stations allotted to
one firm by the FCC. An application for
Kansas City also will be filed.
Twentieth Centm-y-Fox of St. Louis
has been incorporated in Missouri to do
television and radio broadcasting. The
firm was incorporated with 10.000 shares
of $100 par value stock.
The three applications that have been
filed to date are for San Francisco, Boston
and Seattle.
Tlie San Francisco and Boston applications
are competing with bids filed by
Paramount in those cities.
BOXOFFICE :: June 19, 1948 13