Sir Robert Kerridge - The Power and the Money

Popular legend has it that Sir Robert Kerridge is a self-made man. Nothing could be further from the truth He has always had money behind him. As a young man he started up business in Gisborne - he acquired Gisborne Theatres in 1927. Early in his career he got the backing of a wealthy land-owner named Williams. The two men formed a company called Union Investments and embarked on a career of unashamed empire-building.

In those days the cinema industry wasn't as rigidly controlled as it is now. There were chains of theatres but there were more of them and they were more fluid in ownership. The independent theatres had a stronger position.

The growth of monopoly in the industry occurred naturally, given the capitalistic environment. Distributors offered the best films to the chains with the best circuits and the best houses. Getting the best films enabled these chains to ex-tend their circuits and improve their houses, which meant that they continued to get the best films. The smaller operators got what was left over, and were always in danger of being squeezed out.

There was one sure way that a chain could guarantee itself access to good films and strengthen its competitive position; it could form an association with an overseas distributor.

Competition was severe. The ownership of both theatres and chains changed hands continually, and Kerridge's road to fame, fortune and knighthood was strewn with commercial corpses

By 1940 Kerridge had taken over the Kemball chain in a series of transactions. In 1945 he took over the Fuller and Fuller-Haywood chains (Fuller was an Australian firm), and in 1946 the J C Williamson Picture Corporation (another firm with an Australian shareholding). This left him alone in the field with his most spirited antagonist, Michael Joseph Moodabe of Amalgamated Theatres.

In the course of their scramble to the top both Kerridge and Moodabe called in outside help. Early in 1946, in the middle of their takeover binge, Kerridge and Williams sold a half share of Union Investments to Odeon Holdings, an English company controlled by J Arthur Rank. Moodabe had already sold half of Amalgamated to 20th Century Fox and was later to sell most of the rest. Associating with Rank and Fox assured Kerridge and Moodabe of control over the New Zealand cinema industry, but it meant that Rank and Fox had control over them. It was in fact Rank and Fox who decided the fate of the New Zealand cinema early in 1946.

It might help at this point if we go into Rank's interest in all this:

J Arthur Rank was an Englishman of means. Considerable means in fact. He was involved in flour milling and baking in a big way, and diversified from there into the ownership of cinemas. Later he moved into film making and distribution.

His career in the cinema was a bit like Kerridge's, only on a much bigger scale, building his empire by gobbling up the smaller operators. During the war he made a killing, and when it ended he felt strong enough to expand further - not only in Britain but throughout the Empire and Europe as well.

He acquired a half interest in an Australian company. Greater Union Theatres, which was an amalgamation of four theatre chains: West's Pictures, Spencer's Pictures, Amalgamated Pictures -and J C Williamson, the Australian end of the J C Williamson Picture Corporation of New Zealand.

Rank attended to New Zealand next, where he found Kerridge anxious to deal with him. Now Rank was anxious to deal with Kerridge because he wanted a share of the action in New Zealand. However, 20th Century Fox, who were already here through their shareholding in Amalgamated, wanted more of the action too. Rank and Fox also had their problems in England There were two theatre chains there that were ripe for the picking, the Odeon and Gaumont-British chains. Both Rank and Fox wanted a share.

So they made a deal. Rank took over Odeon, and Rank and Fox jointly took over Gaumont-British. Moodabe and Kerridge were summoned to New York (Kerridge went at Rank's request) where their fate was worked out. 20th Century Fox was to expand its shareholding in Amalgamated; Kerridge was to sell a half share of Union Investments to Odeon Holdings (NZ) in which the Rank companies held 416,000 shares and the joint Rank-Fox outfit, Gaumont British held 384,000.

This meant that Rank gained control of Kerridge, and that Fox gained an -interest in the operation too.

We noted earlier that this transaction took place in the middle of Kerridge's takeover binge, and we commented that it gave Kerridge and Moodabe control of the cinema industry in New Zealand. The takeover of the J C Williamson Picture Corporation illustrates this perfectly.

Kerridge had been interested in the Picture Corporation for some time, but the Australian interests in it, the Tail brothers, weren't interested in selling. Kerridge wasn't offering enough. The Tait brothers also knew that Kerridge was anxious to come to some arrangement with Rank, and they reckoned that Kerridge would have to come to terms with them if he wanted to deal with Rank. This was apparently because Rank wanted the whole industry sewn up.

After the Rank-Fox arrangement, the Tail brothers had no option but to sell. With Rank and Fox in control of the New Zealand scene, they were worried about their supply of films (remember, Rank and Fox were distributors). They got the price they wanted though because they were the only complicating factor, and Rank (through Kerridge) was happy to pay them off.

It is because of this sort of commercial malpractice that distributors, in many other countries aren't allowed to engage in the exhibiting of films. It is too easy for them to squeeze out competitors through their control of the supply of films.

Political Repercussions

New Zealanders were naturally concerned about these goings-on, and about the degree of monopoly that was developing in the industry. Kerridge Odeon and Amalgamated between them owned 177 cinemas including practically all of the city ones. Most of the concern was about the fact that Fox was involved in both chains and the Labour government appointed a Committee of Inquiry in 1948 to look into the matter.

Among the things that the committee had to consider was the extent to which the New Zealand cinema industry should remain in the hands of British and New Zealand nationals. This reflected the anti-Americanism underlying the resentment against Fox. The Labour government apparently preferred British investment to American, an attitude that is still common. American firms operating in New Zealand come in for a lot of (deserved) criticism, particularly in radical papers and magazines, British firms escape comparatively unscathed, despite the fact that there are still a lot more of them.

This attitude is apparently common in Australia too. In a private letter commenting on the New Zealand situation, An Australian show-biz personality John Tait wrote, The picture business in New Zealand now will be absolutely controlled by the Rank, Kerridge and Fox interests, which in many respects is a pity, but it is nice to know that English and New Zealand money is the dominating factor.'

When the Committee of Inquiry issued its report in 1949, it said that it was 'even' a bit dubious about the British investment. However as it didn't propose doing anything about it, it didn't make any difference.

The Rank Empire

Some of the concern about Fox was due to the fact that people believed that Rank (whose main interests were in exhibiting films) would be well and truly [unclear: der] the thumb of a distribution-production company like Fox.

Rank's enormous personal fortune gave him in fact a strong position in his dealings with Fox (in contrast to Moodabe who would have had to do what Fox told him). Rank eventually had a violent disagreement with Fox over the standard of the Fox films shown in England. He page 7 refused to show a lot of them on his main circuit, and consigned them to the bughouse circuit. This infuriated Fox, who tried to organise a circuit of their, own, failed, and had to make their peace with Rank.

As well as this, Rank was the only European film concern to ever try to invade America. He didn't think that the American distributors were giving his films a fair run, and he set up an American distributing company of his own. It was a dismal failure and cost him millions of dollars. But he at least felt strong enough to make the attempt.

The introduction of television brought hard times to the cinema world. Rank closed most of his film studios and a lot of his cinemas. The Gaumont circuit collapsed and was absorbed into the main Rank circuit (we haven't been able to find out what happened to the Fox interest in Gaumont; however Fox and Rank still share a distribution company). Rank was forced to diversify and is today involved in property development, bingo halls, ten pin bowling (these particular activities being suitable for closed-down cinemas), a string of radio stations, Southern Television, British Space Development, Butlins holiday camps, precision instruments, hotels, laundries, wine wholesalers, Murphy Radio - to name a few of the Rank interests.

The Rank activities revolve around a central company, the Rank Organisation, which is controlled by the Rank Foundation (a legal device to keep the company in British hands. The man in charge is an accountant turned tycoon called Sir John Davis. The Rank Organisation carries on business through subsidiary companies, hundreds of them, operating in dozens of different countries. Many of these subsidiaries are in fact partnerships with other companies. The Midland Bank, for instance, is the largest shareholder in Odeon Theatres and has several directors on several Rank companies.

Most successful of the Rank subsidiaries is Rank-Xerox, a joint venture with Xerox of the United States of America. (Rank is also one of the largest shareholders in the Xerox Corporation, which earns Rank about three-quarters of its income. Which isn't surprising seeing that Rank-Xerox enjoys a virtual monopoly in Commonwealth countries like New Zealand. (The Xerox Corporation has the monopoly to itself in many other countries).

As well as controlling the Rank Organisation, the Rank family is still involved in its old flour milling and baking business, Ranks Hovis McDougall, which has now-expanded into the food business generally. They are the makers of Cerebos salt and own the Dominion Salt Company of New Zealand, and are another enormous (by British standards) organisation.