Columbia Strikes Back

Columbia Strikes Back

The Close Encounters story continues (and another brief hiatus for #1939TheMiracleYear)

When “Close Encounters of the 3rd Kind” was set by bid for Tom Moyer’s Westgate theater in Beaverton it was months before it was to open in December of 1977. They offered their largest theater in that complex, and there should have been no problem with opening the film in the normal course of business.

But that exact same house was the exclusive venue for a film that opened in Portland in May – Star Wars (aka Star Wars IV – A New Hope). Most films exhaust the available audience within a month or six weeks. Not so with this juggernaut. Yet there would not have been any problem if Star Wars could have been moved into a smaller house at the same complex. The contract, however, that Tom Moyer Theaters had with Fox for this film precluded such an arrangement. It possessed a provision that almost never kicks in – a ”hold over” clause. According to this provision, if the three day (Fri-Sat-Sun) gross exceeded a set amount, then it automatically held over for another week. When it became apparent that Star Wars was not losing steam, but actually picking up force six months after its opening, they contacted Columbia (the distributor of CE3K) to ask to move the opening of their film onto another (smaller) screen in the same complex.

That was not acceptable to Columbia – either CE3K went into the contracted theater on schedule or they would sue TMT for breach of contract. In any event TMT was going to be sued for breach of contract, for Fox would insist on suing if Star Wars was taken off while still doing holdover business.

Columbia took CE3K away from TMT and gave it to their competitor Larry Moyer (Tom’s estranged brother) and brought a breach of contract suit against TMT. When Tom brought a restraining order against Columbia, the distributor went another step further, by removing TMT from the bid list in Portland, effectively giving all of their upcoming films to Larry. This led Tom to claim that Columbia’s actions were in essence a group boycott and hence a breach of antitrust law.

The District Court ruling went against Columbia on their breach of contract claim, but against Tom on his antitrust claims. As these things go, appeals dragged the suits on well after the life of the films in the theaters. In fact, Star Wars V – The Empire Strikes Back came out in Tom’s theaters before the decision from the appellate court came down.

When it did come, the 9th District Appellate Court upheld the District Court’s judgement against TMT’s antitrust claims.

Per the Entertainment Law Reporter 4:19:5
“Columbia had sound justification for its refusal to deal with Tom Moyer on the basis of the ‘Close Encounters’ episode. In Columbia’s view, Larry Moyer had the next best available facilities in the area. And, even assuming that there was some type of ‘conspiracy’ between Columbia and Larry Moyer, there was no showing of any anticompetitive purpose or effect.”
(Evidently the records I dug up for the lawyers to analyse were the basis for the following section of the report):
“Tom Moyer was the only party likely to suffer from any conspiracy, and his system-wide grosses and profits had increased each year; the profits from the Portland market declined only four per cent from July 1979 to February 1980.”

I would like to close this out with a comment as to what happened afterwards, but I don’t recall how long Columbia locked TMT out of their product.  (A project for another day, when I can access some newspapers from the time period to check the ads).  I can’t help but think that Columbia got the worst of the bargain.

The Set Up – What the Studios Did #1939TheMiracleYear

1939 The Miracle Year The Set Up What the Studios Did

Expansion was the word. In fact one could say that the year 1938 was one of expansion throughout Hollywood. When you total up all they spent on their facilities it was a respectable figure – 112 million.

Fox held an enviable position. They had already spread their productions across their two lots. The original on Western Avenue, and their brand new plant in Westwood.

Paramount, on the other hand, pinched by the confines of its lot on Marathon Street, was looking for other properties on which to expand, either, like Fox, up in Westwood or some place farther up in the Valley. In the meantime they were forced to build outdoor sets on their ranch property forty miles away in Malibu.

Columbia had a similar problem – and solution, utilizing their nearby ranch to ease the crush at their original lot on Gower Street. In addition they took a lease on another studio, the old B P Schulberg lot on Bronson Avenue.

Universal did not have the same problem – with 365 acres it had ample room. But what it did not have was enough sound stages for their productions. Two brand new ones were under construction and a new 6 story admin building. A recent turnover at the top (their principal founder- Carl Laemmle had been deposed) saw plans for major changes around the lot. Work was underway to modernize and soundproof three of the oldest stages on their lot – (one of which was nicknamed the “Phantom” after the Lon Chaney silent, The Phantom of the Opera, filmed there).

In 1938 MGM in Culver City, completed their Thalberg Memorial building at the cost of 2 million dollars. This administration office building was so named as a tribute to their recently deceased ‘wunderkind’ head of production, Irving J. Thalberg, the man singularly responsible for setting the precedent that the studio held the reins over the talent it employed.

Even smaller companies were feeling the need to expand. Monogram had maxed out all the space at the Talisman studios. Hal Roach, who recently switched from MGM to UA to release his comedies, was thinking about pulling down the admin building and replacing it with one larger that would house three stages and business offices. Republic was hampered in their expansion efforts by their relations with their landlord. They either wanted to buy it outright if they could negotiate a good price, or hammer out a longer lease for the property.

Only two film outfits had more pressing needs. Walt Disney, though riding the success of “Snow White and the Seven Dwarfs,” was busy reorganizing his three companies (one of which was a realty firm) down into one unit. And RKO, which by the way had released Snow White, was in the midst of a financial reorganization, having just emerged from a 77b receivership (the prior bankruptcy instrument to the present-day Chapter 11).

So the stage was set, and the studios were humming.