Film Journal October 2018

From the Editor’s Desk
In Focus
Reconsidering the Consent Decrees
During the 1940s, the Supreme Court of the United
States reviewed anti-competitive doings in the motion
picture industry. The major Hollywood studios controlled
almost every aspect of the movie industry. One of their
most disturbing practices was their effort to quash independents.
Certain policies such as block booking and overbroad
clearances were reviewed and condemned by the
Court and eventually led to the ruling that became known
as the Paramount Consent Degrees in 1948.
The Court decided the most sensible fix was forcing
the studios to divest themselves of cinemas. But their decision
stopped short of forever banning them from theatre
ownership.
Last month, the government decided to review the
Paramount Consent Decrees. While the Department of
Justice may very well end the Decrees, it still cannot overrule
the Supreme Court. Overbroad clearances, block
blocking and other banned practices could easily lead to
lawsuits. But what was once considered unfair in another
time may be perceived as pro-competitive in the current
climate.
It is not uncommon for the larger exhibitors to demand
exclusivity in certain geographic areas of the country.
Since only overbroad clearances were deemed unacceptable
under the Paramount Consent Decrees, exhibitors
and distributors have negotiated more modest clearance
agreements in recent years. These pacts have led to Justice
Department investigations as well as lawsuits from unhappy
independents.
A Texas federal judge has put in play what could be
the first jury trial looking into the relationship between
theatres and studios since the landmark 1948 Court decision.
Soon after the DOJ decided to review the Consent
Decrees, a U.S. District Court rejected AMC’s bid for a
summary judgment in a lawsuit that alleges the leading
cinema circuit colluded with Sony, Disney and Universal to
the detriment of an independent theatre owner in Houston,
Viva Cinemas.
AMC made clearance pacts for exclusivity on first-run
films in Viva’s territory. While overbroad clearances are illegal
as stated in the Paramount case, the court noted that
Viva could not cite a single case in which clearances have
been deemed illegal since that time.
The judge concluded that a rule-of-reason analysis is
needed under antitrust law. To prove a violation of the
Sherman Act, Viva would have to show that AMC and the
studios united in a conspiracy to restrain trade.
The judge stated, “Though the Court agrees with AMC
that such evidence of horizontal agreements is precarious,
screening out marginal cases is not an appropriate use of this
Court’s summary judgment function. Based on the evidence,
the court cannot say a reasonable juror could not find the
existence of horizontal agreements between the suppliers.”
If we assume that the Consent Decrees restrained the
industry from excessively unfair pacts, what will happen if
they are struck down? Will the studios begin flexing their
muscles and seeing what they can get away with under antitrust
laws? It’s just a matter of time before we know.
The Heart of Show Business
Show-business people are kind, generous and philanthropic.
And the motion picture industry epitomizes this
goodness. Time and time again, we witness the generosity of
an industry that most definitely “pays it forward” There are a
number of entertainment-based charities that have different
missions but share the common element of doing good and
helping the less fortunate.
In this edition of Film Journal International, correspondent
Bob Gibbons interviewed four of the top executives from
the industry’s premier charities, including Variety—The Children’s
Charity, the Will Rogers Motion Pictures Pioneers
Foundation, Lollipop Theater Network and the St. Jude Children’s
Research Hospital. Each organization is unique in its
mission, with executives who are committed to their cause.
Todd Vradenburg, executive director of Will Rogers,
states that the motion picture industry has not only created
that charity but has sustained it for 80 years. Stan Reynolds,
international vice president of Variety, emphasizes that Variety
is a great family of people who care. Evelyn Iocolano,
executive director of Lollipop, says that Lollipop is about lifting
the spirits of the patients and families they serve by using
movies and entertainment to provide an escape from what
is otherwise a very stressful time in their lives. And Richard
Shadyac, Jr., president of St. Jude, explains that their mission
is to discover how to save the lives of children with cancer
and other life-threatening diseases while ensuring that no
family ever gets a bill from the hospital.
This industry is very proud of their prestigious institutions,
and despite the competitive nature of the business, when a
child or pioneer in the industry is in need, everyone bands
together to make certain that person is well cared for and
treated. That is why we are the Heart of Show Business.
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