Boxoffice-May.15.1949

Paramount Reports Drop
In Earnings for 1948
NEW YORK—Paramount Pictures, Inc.,
earned $24,357,102 for the fiscal year ended
Jan. 1, 1949. after all charges including
estimated provision for taxes on income,
according to the annual report issued by
Bamey Balaban, president. The amount
represents a drop of $7,083,375 from earnings
for the fiscal year 1947 of $31,440,477
including $3,429,000 share of undistributed
earnings of partly owned non-consolidated
companies.
Earnings stated in the current report include
approximately $2,360,000 net capital
gains, after provision for taxes, and $1,788,-
000 representing the company's direct and
indirect net interest as a stockholder in the
combined undistributed earnings of partly
owned non-consolidated companies.
FOREIGN GAINS NOT INCLUDED
The consolidated results for 1948 do not
include the earnings of subsidiaries operating
outside of the U.S. and Canada except to the
extent that dividends were received therefrom.
Such film revenues were included only
to the extent of the remittable portion or,
with respect to certain countries, only to the
extent that dollars were received in New
York.
Earnings per common share lor 1948 on
the basis of combined consolidated earnings
and share of undistributed earnings of partly
owned non-consolidated companies was $3.63
on the 6,715.039 shares outstanding and in
the hands of the public Jan. 1. 1949. This
compares with $4.43 per share for the year
1947, or a decrease of 80 cents, on 7,092,839
shares outstanding Jan. 3. 1948.
Dividends paid during 1948 amounted to
$13,788,978. compared with $14,347,788 in 1947,
or $2 per share for each year.
The consolidated balance sheet showed
current assets of $81,628,553 and current liabilities
of $13,664,405, leaving a net working
capital of $67,964,148. The current assets Included
cash and government securites of $32,-
372.460, all located in the U.S. and Canada,
and inventory of $42,483,137.
Balaban's report to the stockholders commented:
"During 1948 we spent approximately $8,-
600,000 for net additions to fixed assets and
mvestments of the company and subsidiaries,
$3 500,000 for reduction of the company's
bank debt, $8,269,000 for acquisition of shares
of the company's common stock, and $13,-
788.000 for payment of dividends to stockholders,
with the result that the net working
capital decreased $10,420,000 during the year.
COMMON STOCK REDUCED
"Between Nov. 11, 1946, and April 26, 1949,
we reduced our common stock outstanding In
the hands of the public to 6,588,139 shares by
the purchase of 916,133 shares at an aggregate
cost of $22,392,000 disregarding dividends
which would have been paid if the shares had
been outstanding on the several dividend
payment dates. Thus, we reduced our outstanding
capital stock by 12.21 per cent and
we paid approximately $37,000,000 in dividends,
or a total cash outlay of approximately
$59,000,000 in less than 2H years."
Commenting on speculation about television
competition, the report says that the
Youngstein to
Head
Para. Advertising
NEW YORK—Max Youngstein has resigned
as vice-president in charge of advertising,
publicity and exploitation for
Eagle Lion to become director of advertsing,
publicity and exploitation for
Paramount. He will leave EL May 20 and
take over his new post three days later.
Stanley Shuford resigned as advertising
manager for Paramount earlier in the
week.
Since the resignation of Col. Curtis
Mitchell as director of advertising, publicity
and exploitation several months ago
the Paramount promotion departments
have not had a joint head. Shuford has
functioned as advertising manager, Ben
Washer as publicity director, and recently
Hal Danziger was named exploitation
director. It is understood Shuford
objected to this arrangement. All three
departments have been under the general
supervision of Paul Raibourn, vicepresident.
Shuford had been with Paramount six
years and prior to that had long advertising
experience, as a vice-president of
the Blow Agency and with Lord &
Thomas. He was with Warner Bros,
seven years and with RKO in 1941.
new medium "may turn out to be our companion
rather than our antagonist," that it
may become "an unparalleled medium for
the development of talent for motion pictures"
and that it will be "an imprecedented
advertising facility for the showing of short
sections of movies in homes to stimulate the
interest of those who are not now patrons of
the movies."
The report tells how Paramount, as a motion
picture company, has pioneered in the
development of television and describes the
company's fast system of large-screen television,
calling it especially adaptable to a
film theatre. It points out that "with our
large-screen televisioii, people need not stay
at home 'during broadcasts of major events')
because they will know they can see the regular
program and the special event at their
motion picture theatre."
Balaban's report concludes:
"With the time now definitely fixed for
the separation of Paramount into two enterprises,
I cannot help but reflect upon the
good and rewarding days we have had together.
Many of us can remember the dark
time following the reorganization in 1935
when Paramount had approximately $100,-
000,000 of senior securities outstanding. In
the intervening years, practically all those
senior securities were paid off or otherwise
retired ... It is especially fortunate that we
have such a sound financial structure now,
because it makes the task of the two new
companies so much easier and gives them
the basic strength and resources to carry on
their own activities successfully."
British Circuit Plans
TV Broadcasting
NEW YORK—British exhibitors not in
direct
competition with Granada Theatres will
be serviced on request
with television programs
if and when the
postmaster general
grants Granada's recent
application for a
license to erect a television
station, Cecil G.
Bernstein, managing
director, has revealed.
He also plans erection
of a London studio for
the production of specal
shows which would q^^^ q Bernstein
be televised to many
of the company's chain of 58 theatres and
the non-competing houses.
Bernstein arrived a week ago for the
express purpose of examining the RCA largescreen
television equipment which will oe
offered for sale in limited numbers at the
end of the year. The current estimated cost
would be about $25,000, not including some
extras and installation. TOA has complained
that this is too high for most exhibitors.
INTERESTED IN COMPARISON
The British film man will compare the RCA
equipment with what he said is similar equipment
to be marketed in England about the
same time by J. Arthur Rank interests at
an initial price, based on the production of
the first 12 sets, of from $32,000 to $40,000,
including installation.
Up to the present time the British postmaster
general has allowed television privileges
only to the British Broadcasting Co.,
but Bernstein hopes to get permission to
broadcast over a special wavelength. BBC
already, he said, has offered to let his theatres
pick up any of their wholly owned
shows for large-screen theatre use in return
for the use of films at least a year old.
"We felt," Bernstein said, "that BBC has
little to offer us now that would draw audiences
to our theatres. This belief led to our
decision to apply for our own station.
"According to published descriptions, the
Rank equipment looks pretty good. It is
about the same size and is located at about
the same distance from the screen as the
RCA equipment. I am also interested In
seeing the Paramount setup."
CAN'T PREDICT VIDEO START
Bernstein could make no prediction as to
when the government might act on his application.
If the decision should be favorable,
his company would be the first private
company to enter the field with the
BBC. He did not know of any applications
filed or planned to be filed by other film
groups. He is an independent.
While TOA envisages in the distant future
the possibility of a central agency piping
closed-circuit television programs into film
theatres, or sending them over the air when
a theatre is near enough to the point of
origin, it is not believed that the plans have
developed to a point where there might be a
good percentage of live talent.
With Bernstein the situation is different.
His theatres are not limited to the showing
of films and play a variety of entertainment.
16 BOXOFPICE May 14, 1949