A friend in the business passed along an email press release a while back because he assumed I might be interested. It opened with, “Cineplex Entertainment will celebrate 100 years of movies and movie-going memories in 2012.” Curious, I thought. As a corporate entity, Cineplex has only been around since 1979, when entertainment lawyer/producer Garth Drabinsky and distributor/exhibitor Nat Tayor launched the company with their first Cineplex theatres in Toronto’s Eaton Centre. Hardly the birth of cinema (the first public screening took place in Paris, Dec. 28, 1895), so what was “1912” referring to?
The answer would come two paragraphs down: “The history of today’s Cineplex Entertainment can be traced back to 1912 when Adolph Zukor founded the Famous Players Film Corporation (today’s Paramount Pictures) and then a few years later merged with Canadian N.L. Nathanson’s company to form Famous Players-Lasky Corp. In 1920, their goal was to build a large chain of theatres across Canada and by 1921 operated 20 theatres with approximately 20,000 seats – a huge accomplishment at the time.”
When I put together a list of the 100 most influential Canadians involved with the movie business in the summer 1996 issue of Take One: Film in Canada – to celebrate 100 years of movies in Canada – I concluded with an entry on Mr. Zukor. It was meant to be a provocation, a punctuation mark at the end of the list, because if you could point the finger at any one individual who seriously stunted the growth of an indigenous Canadian film industry, it would be the Hungarian-born Zukor.
The diminutive entrepreneur (he was barely five feet tall) entered the penny arcade business in 1903 and built his first palatial movie theatre, the Crystal Hall, in New York City in 1904. With the aid of a massive loan from the Morgan Bank, he embarked on an ambitious plan to acquire motion picture theatres right across North America. His strategy was simple. Since he co-owned, with Jesse Lasky, a production company (Famous Players-Lasky) and a distribution company (Paramount Pictures), films produced by Famous Players-Lasky and distributed by Paramount would play exclusively in his theatres, thereby giving him the basis for an effective monopoly of the business.
In 1919, he set his sights on Canada. He would not negotiate the rights to Famous Players-Lasky films, whose major box office draw was “America’s sweetheart,” the Toronto-born Mary Pickford, with the Allen Brothers (who owned Canada’s largest theatrical chain at the time) unless they took him into partnership. They refused; so, instead, Zukor acquired a substantial interest in N.L. Nathanson’s Paramount Theatres chain. The American-born Nathanson was the Allen’s only serious rival. By the end of January 1920, Nathanson formally incorporated Famous Players Canadian Corporation (FPCC), with a capital infusion of $10 million. Starved of Pickford films, Allens went bankrupt in 1922, losing a fierce bidding war with Famous Players. They overextended themselves and simply could not compete with Zukor’s well-financed plan to dominate feature film production, exhibition and distribution in North America.
In a complaint issued by the Federal Trade Commission in the U.S. in March of 1923, it was alleged Adolph Zukor, Jesse Lasky and Famous Players-Lasky Corporation “has built up and now possess and exercise a dominating control over the Motion Picture Industry that has a dangerous tendency to give them complete monopoly therein… Famous Players–Lasky Corporation is the largest theatre owner in the world.”
On paper, FPCC was a Canadian company. That fiction was shattered in 1930 when Zukor, through his newly created holding company Paramount Publix, acquired direct control of the company rather than merely being the majority shareholder. Zukor offered four Paramount Publix shares for every five FPCC shares. Nathanson resigned from the company, explaining his decision to the press as a protest against a deal that would have given control of his company to American interests. The matter reached the federal Cabinet, and Conservative Prime Minister R. B. Bennett launched an investigation into the Canadian film industry under the Federal Combines Investigation Act. Commissioner Peter White was appointed in charge of the Hearings, which were held in what is now known as Toronto’s Old City Hall in October of 1930.
Mention should be made here of a unique figure in this corporate struggle for the control of the Canadian film industry. Ray Lewis had been the editor and publisher of the Canadian Moving Picture Digest since 1919. She was a minor figure in the film business, eventually owning two theatres in Toronto, as well as a small distribution company. Earlier, she had worked for the Allens and was an out-spoken supporter of all things British. Lewis used The Canadian Moving Picture Digest as her personal soapbox, although never more stridently than during the White Hearings and subsequent trial. She was a shareholder in Famous Players and led the revolt against Zukor’s takeover bid. Her writing style was histrionic and she went to great lengths to pillory Zukor, Paramount and Famous Players on the front pages of her paper. “It looks very much,” she wrote, “as if Famous Players Canadian Corporation has gone completely mad and is destined to destroy itself with aid of those who assume the attitude of gods.”
In July of 1931 Peter White released his report and found FPCC to be a combine, “detrimental to the public interest.” White made it clear that, in the opinion of the Commission, “a combine exists in the Motion Picture Industry within the meaning of the Combines Investigation Act… and has existed at least since 1926.” Four provinces – Ontario, Saskatchewan, Alberta and British Columbia – immediately took legal action, and a trial followed the release of the White Report in the Ontario Supreme Court. However, the hundred and nine defendants, all individuals or companies associated with Famous Players and the Hollywood exhibition and distribution monopoly in Canada, were found not guilty on three counts of conspiracy and combination. Ray Lewis’s headline on March 12, 1932, screamed, “Travesty of Justice.”
A decision against the U.S. cartel would have been an historic turning point for the future of filmmaking in Canada, but it was not meant to be. Nathanson quietly returned to Famous Players in June of 1933 and said: “when the affairs of the Paramount Co. assume a more healthy tone, it is quite likely that steps will be taken to permit the control of the Canadian company to return to Canada.” No such luck, and he departed for good in 1941 to form Odeon Theatres with his son Paul. Later Odeon was sold to the Rank Organization of England.
In 1984, Cineplex bought the Odeon theatres, and Drabinsky launched a major buying spree in the U.S., setting up Cineplex to become the second-largest theatrical chain in North America. In 1986 he sold 49 per cent of Cineplex Odeon to MCA Inc., the parent company of Universal Studios, effectively putting Cineplex under American control. In 1994 the federal government approved the takeover of the Canadian assets of Paramount Communications by Viacom of New York; these assets included FPCC. In 1998, the chain of U.S. and Canadian Cineplex Odeon theatres was bought by the Japanese communications giant Sony. In turn, Onex Corporation, the Canadian holding company, acquired Loews Cineplex from Sony in 2002. It sold off Loews, the American parent, but kept the Canadian theatres. A year later, Cineplex Odeon merged with Galaxy Entertainment (a company created in 1999 by two former Cineplex executives) to create Cineplex Galaxy.
Cineplex Galaxy acquired FPCC for $500 million from Viacom in 2004 effectively bringing an end to a legendary business rivalry dating back 60 years. To the winner went the spoils; in this case, the bragging rights to a rather dubious centenary.
Footnote: Adolf Zukor lived to the grand old age of 103 and died in 1976.