The Year of Crisis: 1971
Burton Holmes, Inc., continued to present travelogue shows, license stills and film rights, and work with in-house and contract people to maintain a full production schedule throughout the 1960's, even though Holmes himself was no longer there to provide guidance and continuity. However, it had been clear to the booking agencies even in the 1950's that "under the direction of Burton Holmes" was not the same as "presented by Burton Holmes." After Holmes died in 1958, the number of bookings for large and high-paying venues continued to shrink.
By cutting expenses, contracting out filming and production, and working without salaries, BHI managed to do a full season of travelogue shows in 1970. However, the continually declining attendance and increasing costs did not bode well for the future. The travelogues in 1969 had actually lost money; and although the 1970 season had come in with a small profit, it was not large enough to finance the following year's work.
At a Board of Directors meeting in 1970, Bob Hollingsworth was asked to put together a statement of the company's assets and liabilities, and to propose and analyze various approaches to keeping the company going. The "Dossier" he compiled, with its 1971 Revision and Report to the Stockholders (from the BoD Meeting of 2 June 1971), is chilling to read. Hollingsworth was blunt and straightforward, and summarized the situation very clearly.
The total assets (in 1970) were estimated to be just over $900,000, of which the major portion was approximately $663,000 value assigned to the film library, and $100,000 for the property Topside. The Travelogue lecture series was valued at only $66,000, and various miscellaneous assets at $82,000. While the value of the dollar has gone down in the nearly forty years since then, and the value of California property has gone up, these numbers are still stunningly small for a company with such a long tradition, and with what had been, at one time, one of the most recognized trademarks in the travel and lecture fields.
For the 1969 season, five 90-minute color 16-mm films had been produced (during 1968) and shown to audiences during the presentation series. Revenue for the January and February series of 1969 was a Gross of $86,919.57, for 50 shows in 10 cities, with total audience (by seats) of 42,704. This presentation series was described in the dossier as having produced a net loss for the company.
The 1970 film presentation series had made a profit, but apparently not a very large one. Ten film projects, based on film that BHI already had in stock, film stock that could be leased from other filmmakers, or films made by other documentary film companies or individuals and leased to BHI, were proposed for 1971. But while four of these were complete and would have been available, with others in various stages of production, the 1971 series was cancelled.
Hollingsworth's summary of the reasons why there would be no film series in 1971:
In other words, there was simply insufficient money to continue the way they had been doing business, and no one would give them loans or credit in the expectation of being paid later from expected profits. It's worthwhile to remember that 1970-71 was a period of economic recession, and there were plenty of companies that didn't make it past this point.
The company was just barely alive.
Three other projects begun in 1970, identified as "Burton Holmes Adventure Series," "The World Is Yours," and "Blow-Up," were also on hold.
The first was a proposed series of one-hour television shows. A budget and proposal had been done, and discussions initiated with some possible broadcast organizations. Apparently they had some interest from CATV [probably what we now call Cable TV] but the money that was offered was too low for BHI to break even.
The second was described as "one-half hour daily or one-hour bi-monthly TV series." The budget and proposal had been completed and contact made with network and local stations, but the project had not yet sold.
The third, a "Blow-Up of Shows on shelf for [a] second feature run," was apparently a conversion to 35mm for movie theater distribution. "Contacts made, market interested, but no money, % only. Money interested, but Market must guarantee return and %. Project has not been sold yet."
The BHI team had additionally investigated the possibility of a foundation grant, but had turned up nothing.
Next for discussion was the possibility of allying with an entertainment, production, or distribution company; or simply selling BHI to one of these. Putting together this Dossier was one step in this direction, as it helped to establish a sale value for BHI. Thus they had arranged with Martin Leeds to represent them as agent in the sale of BHI, for 10% commission. Leeds, Mallett, and Hollingsworth had worked together to put together a prospectus and sales package, beginning in April of 1970, and by June of 1970 the Prospectus had been seen by ten Presidents or appropriate VP's in companies associated with the entertainment industry (including television, documentary filmmaking, and other related businesses). Hollingsworth wrote, "Note! Average sale time for a project of this kind is 6 months to a year before you get a No or Yes. (Project is hot.)" Hot or not, these were difficult economic times, and no one bought BHI.
Finally, could BHI do something with Topside? The real estate had a high value, and they investigated taking out a 2nd mortgage or a refinancing of Topside (there was already a mortgage on the property, the money from that presumably having used to keep the company alive in years past). However, the conclusion was that neither of these could be turned into a paying proposition for the company. Similarly, no private investors were interested in the property, as long as it was still owned by BHI.
Also considered, and discarded, were subdividing the property, putting up apartments on the land, and selling one-fifth of the land for $20,000. Similarly discarded were various plans for reducing monthly expenses:
It is worth noting here that the liability for the mortgage was then currently $37,400, and they had monthly payments of $573.24 to the lenders.
The only choice left was to sell the property; and after three months on the market, they had found a buyer willing to pay $92,500. This was now to be voted upon by the stockholders.
Hollingsworth expanded somewhat more on the unfunded internal liabilities of the company, whether explicit or simply a matter of bookkeeping. Robert Mallett had barely been paid, either on his salary or for the shows he had performed narrations for, over the previous seven years; Hollingsworth calculated this as totaling 70,000, of which 90% remained unpaid. Mallett had additionally lent money to the company, mostly at zero interest; some of these apparently involved the first trust deed on Topside, though Hollingsworth's statements are not very clear on this.
During 1964 and 1965 there had been a cash shortfall, and in 1964 everyone worked without salaries. At the death of Walter Everest in 1967 there was money owed to him from this period, which was transformed into a "Corporetion Note" [sic] to his wife, for $4500. This note carried no interest, and had not been paid off. Additionally, money for unpaid salaries had been owed to Mrs. Holmes (paid to her heirs), to Robert Mallett (carried as a loan; see above) and to Robert Hollingsworth (who probably never received it).
Finally, Mrs. Holmes, at her death in 1968, had bequeathed Louise Woods $100 per month for the rest of her life, to be paid by the company. These payments had not been made, and Miss Wood had not asked for the money until a few months previously (i.e. early 1971).
Hollingsworth then reiterated the need to sell Topside, and went into more detail about the proposed process.
Saddest to read in this Dossier are Hollingsworth's projections for a return to shows and a return to solvency once they had obtained the capital infusion of the sale of Topside.
"The 1972 Series can be put on. We still have most of the pictures on tap. The Mailing List is clean and ready to go! All that is needed to make it work is Capital! Sept. is dead line for starting.
"How did we get into this whole MESS! If we knew all the answers, we would not be where we are! For what it is worth, this is what I think:
"As far back as I can remember, which is twenty years, this company has never made a lot of profit. Our margin, even in good years, was less that 5% on the average. I mean by that, capital cash return, true net. Over a period, minimum of ten years' time our yearly losses eliminated the capital, CASH, balance. This balance is approximately $50,000 with a 10% growth rate to maintain it!
"The business being seasonal, with an income for only three months out of a year. For that reason, it required great use of good will or credit and penny pinching. The balance between the expenses and capital over a nine months [period without income] has always been TRICKY, to say the least. Some of us in the company were putting cash and labor into it to keep this BALANCE!
"In the last few years a chain of events happened to upset this delicate balance!
After including some projections for a possible 1974 asset valuation of $615,626.27 (based on selling Topside and other assets, and writing down to zero the value of the mailing list and the Series), Hollingsworth concluded with a paragraph thanking Robert Mallett for having kept the company going for all those years.
The remainder of the Dossier is a detailed analysis of the valuations assigned to the various films in the BHI archive, and how they might be used as income sources. There will be a separate discussion of this topic. Also included in the Dossier is a list of the shows given 1892-1970, which is the same as the list sent out to the Smithsonian by BHI and will be found summarized elsewhere on this site.
At length the sale was completed, and Topside eventually demolished, as described elsewhere. BHI continued for another fourteen or fifteen years, under the guidance of Mallett and Hollingsworth, before finally closing down.
Update history: This page created 6 September 2007.