exhibitor or distributor allocated profits among theaters that had shown a particular film, and awarded exclusive rights to independent theatres, sometimes without competitive bidding;
Block booking, the studios' practice of requiring theaters to take an entire slate of its films, sometimes without even seeing them, sometimes before the films had even been produced ("blind bidding"), and
Discrimination against smaller, independent theaters in favor of larger chains.
Douglas let stand the District Court's sevenfold test for when a clearance agreement was a restraint of trade, as he agreed they had a legitimate purpose.[6] Pooling agreements and joint ownership, he agreed, were "bald efforts to substitute monopoly for competition ... Clearer restraints of trade we cannot imagine."[7] He allowed, however, that courts could consider how an interest in an exhibitor was acquired and sent some other issues back to the District Court for further inquiry and resolution.[8] He set aside the lower court findings on franchises so that they might be reconsidered from the perspective of allowing competitive bidding.[9] On the block booking question, he rejected the studios' argument that it was necessary to profit from their copyrights: "The copyright law, like the patent statutes, makes reward to the owner a secondary consideration".[10] The prohibitions on discrimination he let stand entirely.
Frankfurter[edit]
Frankfurter took exception to the extent to which his brethren had agreed with the studios that the District Court had not adequately explored the underlying facts in affirming the consent decree. He pointed to another recent Court decision, International Salt Co. v. United States (332 U.S. 392 (1947)) that lower courts are the proper place for such findings of fact, to be deferred to by higher courts.[11] Also, he reminded the Court that the District Court had spent fifteen months considering the case and reviewed almost 4,000 pages of documentary evidence.[12] "I cannot bring myself to conclude that the product of such a painstaking process of adjudication as to a decree appropriate for such a complicated situation as this record discloses was an abuse of discretion", he said.[12] He would have modified the District Court decision only to permit the use of arbitration to resolve disputes.[13]
Consequences[edit]
Movie studios previously charged low rents to exhibitors because they were owned by the studio. When the studios were forced to sell their theaters, the result was higher rental rates charged to exhibitors (rising from an average of approximately 35% to its current level of approximately 50%), so the studios could recoup their expenses.[citation needed] The inability to block-book an entire year's worth of movies caused studios to be more selective in the movies they made, resulting in higher production costs and dramatically fewer movies made. This also caused studios to raise the rates they charged theaters, since the volume of movies fell.
The court orders forcing the separation of motion picture production and exhibition companies are commonly referred to as the Paramount Decrees. Paramount Pictures Inc. was forced to split into two companies: the film company now called Paramount Pictures Corp. and the theater chain (United Paramount Theaters) which merged in 1953 with the American Broadcasting Company (which would be led, with great success, by the now-former United Paramount Theaters boss Leonard Goldenson for decades). Consequences of the
Block booking, the studios' practice of requiring theaters to take an entire slate of its films, sometimes without even seeing them, sometimes before the films had even been produced ("blind bidding"), and
Discrimination against smaller, independent theaters in favor of larger chains.
Douglas let stand the District Court's sevenfold test for when a clearance agreement was a restraint of trade, as he agreed they had a legitimate purpose.[6] Pooling agreements and joint ownership, he agreed, were "bald efforts to substitute monopoly for competition ... Clearer restraints of trade we cannot imagine."[7] He allowed, however, that courts could consider how an interest in an exhibitor was acquired and sent some other issues back to the District Court for further inquiry and resolution.[8] He set aside the lower court findings on franchises so that they might be reconsidered from the perspective of allowing competitive bidding.[9] On the block booking question, he rejected the studios' argument that it was necessary to profit from their copyrights: "The copyright law, like the patent statutes, makes reward to the owner a secondary consideration".[10] The prohibitions on discrimination he let stand entirely.
Frankfurter[edit]
Frankfurter took exception to the extent to which his brethren had agreed with the studios that the District Court had not adequately explored the underlying facts in affirming the consent decree. He pointed to another recent Court decision, International Salt Co. v. United States (332 U.S. 392 (1947)) that lower courts are the proper place for such findings of fact, to be deferred to by higher courts.[11] Also, he reminded the Court that the District Court had spent fifteen months considering the case and reviewed almost 4,000 pages of documentary evidence.[12] "I cannot bring myself to conclude that the product of such a painstaking process of adjudication as to a decree appropriate for such a complicated situation as this record discloses was an abuse of discretion", he said.[12] He would have modified the District Court decision only to permit the use of arbitration to resolve disputes.[13]
Consequences[edit]
Movie studios previously charged low rents to exhibitors because they were owned by the studio. When the studios were forced to sell their theaters, the result was higher rental rates charged to exhibitors (rising from an average of approximately 35% to its current level of approximately 50%), so the studios could recoup their expenses.[citation needed] The inability to block-book an entire year's worth of movies caused studios to be more selective in the movies they made, resulting in higher production costs and dramatically fewer movies made. This also caused studios to raise the rates they charged theaters, since the volume of movies fell.
The court orders forcing the separation of motion picture production and exhibition companies are commonly referred to as the Paramount Decrees. Paramount Pictures Inc. was forced to split into two companies: the film company now called Paramount Pictures Corp. and the theater chain (United Paramount Theaters) which merged in 1953 with the American Broadcasting Company (which would be led, with great success, by the now-former United Paramount Theaters boss Leonard Goldenson for decades). Consequences of the
