The film daily year book of motion pictures (1948)

by exhibitors not defenaants in this action: 14.1 per cent was paid by its own theaters: 1.26 per cent by Loew theaters: 6.52 per cent by RKO theaters: 13.46 per cent by theaters in which Paramount had an interest; and 4.82 per cent by Warner theaters. 145. On Jan. 1. 1935, there were 13.386 theaters operating in the United States. In 1945. there were 18.076 theaters operating in the United States. 146. In about 60 per cent ol the 92 cities having: populations of over 100,000 there are independents first-run theaters in competiiton with those of the major defendants except so far as it may be restricted by the trade practices found to have unreasonably restrained competition. 147. In about 91 per cent of the 92 cities with over 100,000 population, there is competition on first-runs between independent theaters and theaters of one or more of the defendants, or among the defendants themselves, except so far as it may be restricted by the trade practices found to have unreasonably restrained competition. In the remainder of the 92 cities there is always competition In some run. Competition Regardless 148. In the aforementioned 92 cities, at least 70 per cent of all of the first-run theaters are affiliated with one or more of the major defendants. In 4 of said cities there are no affiliated theaters. In 38 of said cities there are no independent first-run theaters. In the remaining 50 cities the degree of firstrun competition varies from the most predominantly affiliated first-run situations, such as Boston, Chicago, Los Angeles, Philadelphia, St. Paul, , and Washington, D. C, in each of which the independent first-run theaters played less than 11 of the defendants' features on first-run during the 1943-44 season, to the most predominantly independent first-run situations, such as Nashville, Louisville, Indianapolis, and St. Louis, where the affiliated first-run theaters played at least 31 of the defendants' pictures on first-run during that season. In none of the said 50 cities did less than three of the distributor-defendants license their product on first-run to the affiliated theaters. In 19 of said 50 cities less than three defendant-distributors licensed their product on first-run to independent theaters. In a majority of said 50 cities the major share of all of the defendants' features were licensed for first-run exhibition In theaters affiliated with the major defendants. 149. Loew's operates first-run theaters in 36 of the 92 cities in the United States with more than 100,000 population: in every one of these 36 cities, there are other "first-run" theaters exhibiting the features of one or more of the other defendant distributors: in 21 of these 36. one or more of the other first-run theaters are operated by independents. 150. Of the 92 cities in the United States having a population in excess of 100,000. Twentieth Century-Fox is interested in first-run theaters in 16 and licenses its features to them. In 4 of the remaining cities, none of the defendants has theater interests. This leaves 72 cities in which there are first-run theaters operated by defendants other than Twentieth Century-Fox. In 23 of the 72 cities. Twentieth Century-Fox licenses its features to independent exhibitors. 151. Except for a very limited number of theaters in the very largest cities, the 18.000 and more theaters in the United States exhibit the product of more than one distributor. Such theaters could not be operated on the product of only one distributor. \«> Proof of Monopolizing 152. There is no substantial proof that any of the corporate defendants was organized or has been maintained for the purpose of achieving a national monopoly either in production, distribution, or exhibition of motion pictures, except as found in findings 153 and 154 below. 153. In localities where there is ownership by a single defendant of all the first-run theaters, there is no sufficient proof that it has been for the purpose of creating a monopoly and has not rather arisen from the inertness of the competitors, their lack of financial ability to build theaters comparable to those of the defendants, or from the preference of the public for the best equipped houses and not from "inherent vice" on the part of these defendants. 154. The illegalities and restraints herein found, are not in the ownership of many or most of the best theaters by the producerdistributors, but in admission price-fixing, non-competitive granting of runs and clearances, unreasonable, clearances, formula deals, master agreements, franchises, blockbooking, pooling agreements and certain discriminations among licensees between defendants and independents. These practices, if employed in the future, in favor of powerful independents would effect all of the undesirable results that have existed when the five exhibitor defendants and their subsidiaries have owned or controlled numerous theaters in which the defendants' pictures have been exhibited. 155. Total divestiture would be injurious to the corporations concerned and would be damaging to the public. 156. Total divestiture would not remedy the price-fixing, systems of clearance, formula deals, master agreements and franchises, block-booking, pooling agreements and the other practices which have been found unreasonably to restrict competition. 157. During the nine pre-war years of 19331941, the average cost of American made Warner features rose from $241,000 in 1933 to $448,000 in 1940. By 1945 the average cost had risen to $1. 371. 000. 158. In the past the foreign business of Warner has been exceedingly profitable. 159. With the cessation of the war the foreign markets for Warner pictures are being severely restricted. 160. The arbitration system created by the Consent Decree of Nov. 20, 1910. has demonstrated its usefulness in dealing with exhibitors' complaints of unreasonable clearance and if extended to cover differences which may occur under the system to be established by the Decree herein, will be effective and result in quick and expeditious decisions and a saving of time and money. Conclusions of Law 1. The court has jurisdiction of this cause under the provisions of the Act of July 2. 1890 entitled "An Act to Protect Trade and Commerce Against Unlawful Restraints and Monopolies." hereinafter referred to as the Sherman Act. 2. Universal Pictures Company, Inc. and Screen Gems. Inc. have not violated the Sherman Act and should be dismissed as defendants herein. 3. None of the defendants herein has violated the Sherman Act by monopolizing or attempting to monopolize or conspiring to monopolize the production of motion picture films. 4. The consent decree entered herein on Nov. 20. 1940, does not foreclose enforcement in this suit at this time of any rights or remedies, which the plaintiff may have against any of the defend 984