U.S. judge agrees to end decades-old movie theater rules

By Jonathan Stempel

NEW YORK (Reuters) – A federal judge on Friday granted the U.S. government’s request to immediately end the Paramount Decrees, a set of antitrust rules from the late 1940’s and early 1950’s that ended Hollywood’s monopoly on producing, distributing and exhibiting movies.

U.S. District Judge Analisa Torres in Manhattan said the Department of Justice “offered a reasonable and persuasive explanation” for why terminating the consent decrees would “serve the public interest in free and unfettered competition.”

Last November, the Justice Department moved to end the decrees enacted after the Supreme Court in 1948 said Hollywood’s biggest studios had illegally monopolized the movie distribution and theater industries.

New rules made it illegal for studios to unreasonably limit how many theaters could show movies in specific geographic areas.

They also banned “block booking,” which forced theaters to show bad movies as well as blockbusters as part of a package, and “circuit dealing,” the mass licensing of movies to theaters under common ownership rather than theater-by-theater.

The Justice Department said the decrees were no longer needed after multiplexes, broadcast and cable TV, DVDs and the internet changed how people watch movies, and because studios no longer dominated movie theater ownership. It also said the risk of future violations was low.

Three chains–AMC Entertainment, Cinemark and Regal–control about half of the 41,000 U.S. movie screens.

Torres’ order includes a two-year “sunset” provision for ending the block booking and circuit dealing bans, to minimize market disruption.

Critics of the termination said it could threaten the survival of smaller theater owners.

The National Association of Theater Owners, whose members have about 35,000 screens, supported retaining the block booking ban, while the Independent Cinema Alliance said the termination could reduce its members’ competitiveness and movie diversity,

Neither group was immediately available to comment.

The Justice Department has in recent months moved to end dozens of consent decrees it considers obsolete.

The cases are U.S. v. Paramount Pictures Inc and U.S. v. Loew’s Inc et al, U.S. District Court, Southern District of New York, No. 19-mc-00544.

(Reporting by Jonathan Stempel in New York; Editing by David Gregorio)