Sep 17, 2013

September 17, 2013: The Good Ship Butterfield, Money On the Barrel, End of Conservatism


“The legacy of Butterfield Theatres, Inc, is that it saved itself out of business”

                                    ---from The Quotations of Chairman Joe

 It was the early spring of 1982, I had been recently promoted from theatre manager to District Manager for Concessions with the old W.S. Butterfield Theatres company.  Butterfield had once been the largest theatre chain in the state of Michigan operating most of the theatres in outstate lower Michigan.  By 1982 the company had by now shrunk to about 46 screens in two dozen or so major cities.  I had been asked to join the head of the concession department, a Mr. Paul Tazar who was, at 23, already a commanding figure being the spitting image of Fess Parker and standing in at six foot 4.  Joining us was my colleague Mr. Byron Lane, a veteran of the “Big One”, World War II, having seen action on the Burma Road, and, by then, having logged over 33 years with the company.  I first met Byron back in 1966 when I was hired in as a concession attendant at the old Starlight Drive-In, a small 500 car-house located between Holland and Saugatuck.  My uncle was then managing this establishment as he worked his way through college.  I was a soda jerk, and met Byron District Manager for Concessions, then to me an aging owlish-faced man, much resembling I thought in later years the English journalist Alistair Cook.  Byron was a good natured, honest conservative and we would exchange views, as I got to know him.  He on the political right, me on the left.  He would introduce me at company gatherings as having been with the SDS (the radical Students for a Democratic Society), I would quickly correct him staying the College Democrats.  “Same difference” he would snort.  Nevertheless the emerging friendship was real, and he became something of a mentor for me, helping me negotiate the political currents within the corporation and quietly, unbeknownst at the time to me, helping to further my career.

 On this particular sunny afternoon Paul, Bryon and I met in a restaurant at Ypsilanti to discuss some upcoming changes involving our concession operations.  On the agenda was the dropping of the image of the “Good Ship Butterfield” reduced to use only on the small popcorn containers then in use.  I saw it as evidence of further decline, giving up something of company tradition.  I wasn’t able to carry the day, since the small size of the container served as too much a drag on popcorn sales inasmuch as it moved too many people out of the larger sizes.  The idea was to begin limiting the number of choices so that the lines between movies would move faster and the public would not be given too many inexpensive choices.  This would serve to help increase our per capita revenues upon which the concession operation, because concessions don’t attract attendance at movie houses, depended.  I got the point and acquiesced.

 Then came the matter of smocks, a form of "uniform" to be worn by the attendant in order to make the operation more professional. Paul, with the retirement of Miss Bacon, had taken over purchasing at the home office.  Miss Bacon had a much deserved reputation for being parsimonious when it came to the purchase of supplies.  Whenever a manager sent in a requisition, from theatre passes to toilet paper, she would routinely cut the order in half.  In fact the Vice President of the company once related a story in which he told me of an incident in Ann Arbor which fully illustrates the point.  It was one of the functions, in those days, of the Vice President to oversee any construction or renovation project that the company would engage.  It so happened that Butterfield was renovating the old Campus Theatre in Ann Arbor and then Vice President Lyle Smith was in town overseeing the work.  One Friday afternoon, as the project was nearing completion, Smith sat down at the manager’s desk and sent in a requisition that included 400 “chaser” light bulbs to lamp the new Marquee. These yellow 10 watt bulbs were arrayed in such a way as to go off and on in a circular pattern so as to attract the attention of the pedestrians passing by.  Like neon on a Ferris wheel, lights on a Marquee are there to attract attention.  No Matter, Miss Bacon summarily cut the order in half, leaving the operation with enough resources to lamp half the Marquee.  The next Monday morning, according to the account, Mr. Smith was in Miss Bacon’s office pounding his fist on her desk, mad as hell “Ellen”, he said, “when I send in a requisition for 400 light bulbs I mean 400 light bulbs.  Don’t ever do that to me again.”  I understood. As with any of the other manager’s in the circuit old circuit, she had done that to me many times.  I played hell trying to light my Marquee (I had two of them at the old Vista Drive-In in Grand Rapids) as well as enough toilet paper and cleaning supplies.  Such became standard business practice permeating the organization in which a game of sorts would play itself out.  Manager’s routinely ordered twice as much as they needed; Miss Bacon would cut the order.  She could then report to her superiors that she had, in the course of events, saved the company many thousands of dollars in any given year. 

 Now Butterfield Theatres was once a dominant fixture in Michigan’s entertainment business.  Created by Walter S. Butterfield in the early decades of the last century, the company began as a vaudeville circuit with the likes of the Marx Brothers, Danny Kaye, Red Skelton and the like regularly making their appearances on Butterfield stages whenever they performed in Michigan.  With the advent of motion pictures, Butterfield built an empire so dominant that you didn’t play any films outside Detroit unless you came to terms with Butterfield.  So dominant, in fact, did the company become that in conversations I had with front office executives accounts were told of the company being subject to anti-trust action. 

 But with the passing of the “Colonel”, as the old man was called, the company passed into the hands of his children who, in the 1950’s, put the company into the hands of an accountant brought over from Paramount Studios.  Under the watchful eye of President Gawthorpe, the company in the succeeding decades managed to disinvest itself to such an extent that the market position the company once enjoyed began to erode, in time threatening not only the well-being but the very existence of the company. Butterfield prided itself on its conservatism.  No debt, money on the barrel.  The company did not borrow money to build new theatres.  Instead the money came from operating funds and investments.  The result was that as the industry began to change from the cities to the suburbs, from the single-screen palace on Main Street to the multiplex in suburban strip malls, Butterfield couldn’t, without using credit and leverage, keep up with the changing times.  The result was that there arose competitors, principally Jack Loek’s and Bob Goodrich who made personal fortunes moving into Butterfield towns and putting multiplex cinemas up on the edge of town threatening the old Leviathan downtown.

 The flight to the suburbs has other consequences.  With the multi-screen operations it became possible to hold a film for longer periods of time.  The result was that the cost to exhibitors began to rise.  In the early 80’s Butterfield won a bid for the movie “Muppets Take Manhattan”.  To show this feature required $4,000,000.00 down and 90% of the box office for the first 16 weeks.  When you only have one or two screens in your house, you clearly have to depend on something besides the box office to survive, hence the growing importance of the Concession operation—once treated as an afterthought, now central to the survival of the company.  Other companies were building theatres with sixteen or twenty screens in which you opened in the house seating the greatest capacity but the longer you held unto a film, and the greater your companies percentage of the take, you could move the film into a smaller auditorium making it possible to maximize profits by holding your feature.  This meant that if Butterfield lost the bid for first run, HBO would be playing the flick before the company could get its hands on a print.  Such were the consequences of playing it close to the vest of, from a business perspective, a pathological conservatism.

 But, unfortunately, the conservative rot had long since passed the central office of purchasing and worked its way through the tentacles of the entire company.   The company would not benefit from sitting through Econ 101, and evidence no understanding of the “economy of scale” by dropping a twin theatre next to an already existing twin theatre complete with two concession stands, two sets of box offices, two store rooms, two projection booths, etc. there were other problems. When new theatres, and there were not many, were built they were no longer the grand palaces of yore but instead little band box operations.  When Butterfield remodeled, renovated, added screen or built a new house, old seats torn from a demolished old downtown palace would be refurbished and put into the new.  Old popcorn machines, some a year or so older than I, would be moved into the new venue.  We had the best used shiny new houses in the business. 

 With the passage of old man Gawthorpe in the mid 70’s the tiller of the Good Ship Butterfield passed to the Vice President Smith.  Smith began his career as a stock boy in the home office and worked his way through office politics to the pinnacle of power.  In the field there was some guarded optimism with the change of guard, but all hope was soon dashed when the head of the Advertising Department, a Mr. Henry Capogna retired.  Head of advertising for decades he oversaw the marketing of the firm and since the local manager was responsible for purchasing local media as well as producing local newspaper ads, the managers in the field worked with Henry and sought his guidance in order to maintain and increase attendance.  Henry worked to secure co-op advertising in which the film companies would pay for half the ad budget on a particular film promotion.  These promos often meant exponential increases in budgets.  When I played “White Line Fever” at the Vista in the 1970’s I composed and ran a full page ad in the Grand Rapids Press.  The result was a rare full house in a single-screen thousand car venue.  Sadly, when Henry retired, they did not replace him deciding instead to save his salary.  In a business often marked by single screen operations in which one changed product and audiences every week, we then had no one in the home office primarily focused on marketing.  The result, in succeeding years, was that—true to form—the advertising budget was cut.  The year before they closed the old Starlight Drive-In in Lansing, the radio advertising budget was pared down to such an extent that the local manager could purchase one single 30 second radio spot on only one of Lansing’s many radio stations each week.  The results were wholly predictable.   

 It was in the vortex of these undercurrents that we were struggling to survive in the early 1980’s and when we met on that sunny afternoon in Ypsilanti, our young executive looked at us and said “I want to make some serious changes in the way we operate.  I want people to know, when they come into one of our theatres that they are in a Butterfield house.”

"Well Hell", I proclaimed doing my best to channel John Wayne. "They already know it's a Butterfield House pilgrim!"

 “How so?” asked the surprised and bemused Boss as  Byron sat silently smiling as he looked down on his shoe laces knowing what was about to come.

 “Well they just gotta look at the place.  Hell, half the plexiglass and most of the lights on the Marquee are missing, broken or cracked. Half the letters have some damage.” I then went on to describe a scene at the old Lansing Drive-In, a venue I managed the year before just prior to being put on the road as a supervisor.  I was opening the box office one evening.  The sun was still up and a young couple in a VW had driven up the drive and parked just outside the box office.  I was putting in the tickets and noticed, after a time, the young lady looking around.  She was looking up at the pigeons flying out of the holes in the back of the screen tower.  The tower had been built after the second world war as the Drive-In movie craze was in its infancy.  Butterfield didn’t build many drive-in theatres, only two in fact, the Vista and a sister house in Monroe.  Otherwise they bought up the emerging competition as a means of monopolizing the market.  In this case it was the Lansing Drive-In built by a man named Blackburn who sold it and the aforementioned Lansing Drive-In to the company sometime in the 60’s.  By now the screen tower, having been built on the frame of an old bridge truss was beginning to show its age.  Serious signs of disrepair had long since emerged, from the aging slate now falling to the ground to the “wings” that were added in the ‘50’s”, twenty or so feet on each end to accommodate Cinemascope technology.  These additions, long exposed to the weather were beginning to move in the wind, flapping a bit like wings in a breeze, further cracking the fa├žade and making excellent homes for pigeons and other species of vermin.  The young lady in question looked about and began to grimace.  I went into the office to get the cash box and when I returned I was greeted by the sight of the tail lights of the VW as the car drove quietly away.  Sometime, I surmised, between putting the tickets in the ticket machine and the cash box into the cash drawer, it had dawned on the young man that he was not going to impress the young lady by treating her to a place like this. 

 “I get your point”, said the Boss and told us that from now on the manager’s will get what they order.  We put those changes into effect, improved the profit/loss margins in the operations, began purchasing new equipment and, in 1984 concessions held the company together.  Word was passed down through the organization that for the first time the front end of the business was losing money, concessions made the difference.

It didn’t matter.  Alas the last of the old Colonel’s children passed away and with the company passing into the hands of the grandchildren it was put up for sale. The conservative ethos had finally stood manifest.  The Colonel’s heirs acting through the corporate heads had finally managed to save the company out of business.

 

 

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