The $23.5 Million Check

With a $23.5 million check, Multimillionaire Howard Hughes last week rid himself of a pack of vociferously unhappy stockholders, and, for all practical purposes, became the nation's only sole owner of a major motion-picture studio. The check to RKO Pictures Corp. concluded Hughes's deal to buy all RKO assets. Two obstacles to the purchase were cleared as courts in Wilmington, Del. and Las Vegas, Nev. dismissed stockholders' suits to prevent the sale on the ground that the price was too low and the company was mismanaged.

All a stockholder needs to do now to get $6 a share for his stock (which two months ago would have brought only $2.87 1/2) is turn his certificates in to the Irving Trust in New York. (Although Hughes's check was for $23,489,478, his ultimate cash outlay will be only $15,916,758, since he already owns 1,262,120 of RKO's 3,914,913" outstanding shares.)

What Howard Hughes would do with RKO, now that he no longer faces stockholder suits for heavy operating losses and fat contracts to idle actresses, was something only Hughes knew. As usual, he was not talking. But there was reason to believe he would do little, since Hughes, with stock control, has been running the studio in his own way anyhow.

For his millions, Hughes got a studio without a picture in production and without an established star in the fold. It has one-picture-a-year agreements with such headliners as Gary Grant and John Wayne but has no big names actually on the payroll. (Jane Russell, now negotiating for her own picture-a-year deal, has been under contract to Hughes Productions, not RKO.) Even at that, RKO seemed a good buy. Among its assets:

P: A backlog of old films, which, if released to television, would be worth millions.

P: A seven-picture production schedule, with RKO to handle the making of two films, and act as distributing agent for the other five, to be made by independent producers.

P: Twelve completed pictures awaiting release (among them, Jet Pilot, with John Wayne and Janet Leigh).

P: Losses of around $10 million which could be used to offset profits in other Hughes companies if he could work out a way to merge one of them with RKO.

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