Boxoffice (Oct-Dec 1940)

TEXT OF PROPOSED DECREE EMBRACING "BIG 5" AS OFFICIALLY RELEASED BY THE GOVERNMENT (r How Washington Views It New York — "The purpose of the present decree," says a department of justice statement, “is to provide a means for the elimination of unfair competitive practices in the industry without resorting to the more drastic remedy of divorcement . . . "It is reasonably to be expected that the provisions of the decree as to trade showing and sales in small groups will result in an improvement in the quality of pictures as well as in greater opportunity for local community tastes to be reflected in the pictures selected by exhibitors. This new method of selling shoulcT open to independent producers a market now closed to them under the system of season block booking. In addition, exhibitors will have greater and more frequent opportunities to compete for pictures. "Although the method of selling provided for in the decree is new and untried in the motion picture industry, it is believed that it will be of benefit to exhibitors and distributors, as well as to the public. Whether or not the new method of selling will operate effectively can only be determined after a fair trial and that is provided for by the decree." VS New York — Complete text of the draft of proposals for the consent decree, already approved by Attorney General Robert Jackson and as made public by the department of justice, follows: The United States of America having filed its Petition herein on July 20. 1938, and its Amended and Supplemental Complaint on 1940: the defendants: Paramount Pictures, Inc.; Paramount Film Distributing Corporation; Loew’s, Incorporated; Radio-Keith-Orpheum Corporation; RKO Radio Pictures, Inc.; Keith-Albee-Orpheum Corporation; RKO Proctor Corporation; RKO Midwest Corporation; Warner Bros. Pictures, Inc.; Vitagraph, Inc.; Warner Bros. Circuit Management Corporation; Twentieth Century-Fox Film Corporation; and National Theatres Corporation (See Footnote No. 1) having appeared and severally filed their answers to such Petition and to such Amended and Supplemental Complaint and having asserted the truth of their answers and their innocence of any violation of law; and no testimony having been taken, but each of the consenting defendants having consented to the entry of this decree without any findings of fact, upon condition that neither such consent, nor this decree itself, nor the entry of this decree, nor any statement, provision or requirement contained in this decree, shall be or shall be construed as being (1) an admission or adjudication that the allegations of the Petition or of the Amended and Supplemental Complaint, or any of them, are or is true, or that such defendants, or any one or more of them, have or has violated or are or is violating any statute or law, or (2) evidence that such allegations, or any of them, are or is true, or that such defendants, or any one or more of them, have or has violated any statute or law, or (3) an admission or adjudication that the doing of any of the acts or things hereinafter enjoined or the failure to do any of the acts or things hereinafter directed to be done would constitute a violation of any statute or law, and upon the further conditions hereinafter set forth; and the United States of America, by its counsel, having consented to the entry of this decree and to each and every provision thereof upon such conditions, and having moved the Court for the entry of this decree; Therefore, it is ordered, adjudged and decreed as follows: I. The Court has jurisdiction of the parties hereto; and for the purposes of this decree and of proceedings for the enforcement thereof, and for no other purpose, the Court has jurisdiction of the subject matter hereof and the complaint states a cause of action against the defendants under the Act of Congress of July 2, 1890 entitled “An Act to Protect Trade and Commerce Against Unlawful Restraints and Monopolies.” II. Each consenting defendant, its successors, officers, directors, agents and employees, and all persons and corporations acting under, through, or for it, hereby is and are enjoined from doing the acts prohibited by this decree, and is and are directed to do the acts thereby required. III. No consenting defendant engaged in the distribution of motion pictures (hereinafter referred to as a distributor defendant) shall license or offer for license (Footnote No. la) a feature motion picture (Footnote No. 2) (hereinafter sometimes referred to as a feature) for public exhibition within the United States of America at which an 1. The above named defendants are referred to hereinafter as the consenting defendants. la. License means (as a verb) to make an agreement, or (as a noun) an agreement, by which a distributor grants the right to exhibit a motion picture in any theatre engaged in the exhibition of motion pictures for profit. 2. A feature motion picture is a motion picture approximately 5,000 feet, or more, in length. 3. A trade showing is an exhibition of a feature at a theatre or projection room for the benefit of exhibitors generally. 4. Each distributor defendant shall file with the Department of Justice a map of each of its exchange districts, showing the territorial limits thereof. Changes in the territorial limits of an exchange district shall be made only after two weeks* notice to the Department of Justice. References in this Section and in Sections V and IX hereof to exchange districts are to exchange districts of each distributor defendant, as constituted from time to time. ^ admission fee is to be charged, until the feature has been trade shown (Footnote No. 3) within the exchange district (Footnote No. 4) in which the public exhibition is to be held. Every trade showing shall be preceded by a notice, published in a trade publication (Footnote No. 5) having general circulation among exhibitors (Footnote No. 6) in such exchange district, which shall state the title of the picture and the date and the time when and the place or places where it will be trade shown. IV. (a) No distributor defendant shall offer for license or shall license more than five features in a single group. In offering its features for license to an exhibitor a distributor may change the combinations of features in groups as it may from time to time determine, and may license or offer for license as many groups of features as it may from time to time determine, provided that the license or offer for license of one group of features shall not be conditioned upon the licensing of another feature or group of features. (b) No distributor defendant shall require an exhibitor to license short subjects, newsreels, trailers, or serials (hereinafter collectively referred to as shorts) as a condition of licensing features. No distributor defendant shaJl require an exhibitor to license reissues, westerns, (Footnote No. 7) or foreigns (Footnote No. 8) (hereinafter collectively referred to as foreigns) as a condition of licensing other features. Where a license has been entered into, controversies arising upon a complaint by an exhibitor that the licensing to him of one group of features was conditioned by the distributor upon the licensing of another feature or group of features or the licensing of shorts or foreigns shall be subject to arbitration. An exhibitor shall have no right to assert any such claim unless he shall have mailed to the distributor at its Home Office a notice in writing of such claim and of the grounds thereof, not later than two days after receipt hy the exhibitor of the distributor’s written approval of the exhibitor’s signed application or applications for such features, shorts or foreigns. The power (Footnote No. 9) of the arbitrator in deciding any such controversy shall be limited to making (1) a finding as to whether or not the licensing of such features was so conditioned; and, if the finding be in the affirmative, (2) an award cancelling the license for (or to the extent that it may relate to) such other feature or group of features, or such shorts or foreigns. 5. Trade publication means a daily or weekly newspaper or magazine which is devoted primarily to news concerning the motion picture industry. 6. Exhibitor means any individual, partnership, unincorporated association or corporation engaged in the public exhibition of motion pictures in a theatre or theatres for profit. 7. Westerns are those western pictures which are not of the usual character and type of, and are inexpensively produced as compared with, the distributors general line of features. 8. Foreigns are features produced outside of the Unite<l States except such as are produced in the English langruage by the distributor or a subsidiary or affiliate i;hereof. Where no license has been entered into, controversies arising upon a complaint by an exhibitor that a distributor defendant has offered for license to him more than five features in a single group or that the offer of a license to him of one group of features was conditioned upon the licensing of another feature or group of features, or the licensing of shorts or foreigns, shall be subject to arbitration. An exhibitor shall have no right to assert any claim that an offer so to license such features was so made or conditioned unless he shall have mailed to the distributor at its Home Office a notice in writing of such claim and of the grounds therefor not later than five days after the exhibitor claims the alleged offer was made. The power (Footnote No. 10) of the arbitrator in deciding any such controversy shall be limited to making (1) a finding as to whether or not the offer to license such features was so made or conditioned: and, if the finding be in the affirmative, (2) an award imposing upon the distributor making such offer a penalty in an amount not to exceed $500.00. Such penalty shall be payable into the arbitration fund referred to in subdivision 8 of Section XXII hereof. V. No license for features to be exhibited in theatres located in one exchange district (Footnote No. 11) shall include theatres located in another exchange district, nor shall the licensing of features for exhibition in theatres located in one exchange district be conditioned upon the licensing of a feature or group of features for exhibition in theatres located in another exchange district. Controversies arising upon a complaint by an exhibitor thereby affected that the licensing by a distributor defendant of features for exhibition in theatres located in one exchange district was conditioned upon the licensing of a feature or group of features for exhibition in theatres located in another exchange district shall be subject to arbitration. The power (Footnote No. 12) of the arbitrator in deciding any such controversy shall be limited to making (1) a finding as to whether or not the licensing of features for exhibition in theatres located in one exchange district was so conditioned upon the licensing of a feature or group of features for exhibition in theatres located in another exchange district; and, if the finding be in the affirmative, (2) an award imposing upon the distributor defendant so licensing features a penalty in an amount not to exceed $500.00, payable into the arbitration fund referred to in subdivision 8 of Section XXII hereof. VI. No distributor defendant shall refuse to license its pictures for exhibition in an exhibitor’s theatre on some run (to be designated by the distributor) upon terms and conditions fixed by the distributor which are not calculated to defeat the pur (Continued on page 6) 9. When, in any arbitration under this decree, the finding of the arbitrator shall be tliat the complainant has not sustained his complaint, the arbitrator shall enter an award dismissing the complaint. 10. See Footnote 9 to this Section. 11. See Footnote 4 to Section III. 12. See Footnote 9 to Section IV. BOXOFFICE November 2, 1940 5