Prelude to Divorce?

One day in 1903 a young drugstore clerk strolled into a vaudeville theater on Manhattan's Bowery to while away the time. As far as the direction of his own life was concerned, he had picked a good day. In addition to the song & dance acts, there was an added attraction--motion pictures of ocean waves. It was Joseph M. Schenck's first movie, and he could hardly believe his eyes. Said Joe: "Somebody will make a million dollars out of it."

Russian-born Joe Schenck was one of the somebodies--and he has made much more than a million. He controls an estimated $50 million worth of theaters and a big chunk of stock in 20th Century-Fox Film Corp., which he and Darryl Zanuck formed in 1935.

Shrewd Bargainer. In Fox, Schenck has acted as peacemaker and problem-solver for Zanuck and his temperamental stars. Although a shrewd bargainer, he is known as a soft touch for down & out troupers. He took good care of everyone but himself: in 1942 he went to jail for four months for perjury arising out of a $412,000 income-tax-evasion charge. When he got out, he took up where he had left off, and, in the opinion of many Hollywood-ians, is correctly billed as the grand old man of the movies.

Last week, the grand old man resigned as production chief of Fox, now will spend all his time on his 364 theaters. Although Fox President Spyros P. Skouras refused the resignation, it was almost sure to go through. Joe's move was in preparation for a Government antitrust order which is expected to direct Fox to divorce its production and distribution activities from its theater operations.

Though Fox was still dickering with the Government, it was getting ready for the split-up itself. Fox's Al Lichtman, a hard-knuckled distribution expert, had drafted a plan to get Fox a bigger slice of the box-office receipts.

No Bargain? When Fox loses its own theaters, a bigger take will be important. In rural areas, movies are now sold for flat rentals. Under the new system there will be sliding rates, with exhibitors getting a bonus when box-office receipts are big. Lichtman thinks this will encourage longer runs for good pictures, hence benefit producer as well as exhibitor.

Some exhibitors, who see their profits shrinking, think differently. Said Abram Myers, chairman of the Allied States Assn. of Motion Picture Exhibitors: "If film rentals rise, admission prices will have to be increased; and thus the motion-picture industry will be handicapped in its race with competing amusements . . ." In Manhattan, some exhibitors are threatening to boycott Fox films. Even Fox's own Joe Schenck--now that he is to be only an exhibitor--may find himself on the other side of the bargaining fence.

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