The film daily year book of motion pictures (1951)

not defendants In thla action; 14.1 per cent was paid by its own theatres; 1.26 per cent by Lioew theatres; 5.62 per cent by RKO theatres; 13.46 per cent by theatres in which Paramount had an interest; and 4.82 per cent by Warner theatres. 145. On January 1, 1935, there were 13,386 theatres operating: in the United States. In 1945, there were 18,076 theatres operating in the United States. 146. In about 60 per cent of the 92 cities havingpopulations over 100,000, there are independent first-run theatres. 147. In about 91 per cent of the 92 cities with over 100,000 population there are first-run theatres of more than one defendant or of a defendant and independents. Horizontal Conspiracy 147(a). All the defendants entered into a horizontal conspiracy to fix prices, runs and clearances which was powerfully aided by the system of vertical integration of each of the five major defendants. Such a situation has made the vertical integration an active aid to the conspiracy. Vertical integration has furnished an incentive for such conspiracy. 147(b). There is close relationship between the vertical integrations and the illegal practices. The vertical integrations were a means of carrying out the restraints and consipracies. 147(c). The interdependency of defendants to obtain pictures for their theatres, on the one hand, and on the other, to obtain theatre outlets for their pictures has lessened competition among defendants and between them and independents. Monopoly Power 147(d). There is substantial proof that monopoly power exsited among the eight distributor-defendants who were all working together. Considering that the vertical integrations aided the horizontal conspiracy mentioned in Finding 147(a) at every point, the defendants must be viewed collectively rather than independently as to the power which they exercised over the market by major defendants' theatre holdings. 147(e). Viewed collectively the major defendants owned in 1945 at least 70 per cent of the firstrun theatres in the 92 largest cities. 148. In the aforementioned 92 cities, at least 70 per cent of all of the first-run theatres are affiliated with one or more of the major defendants. In four of said cities there are no affiliated theatres. In 38 of said cities there are no independent first-run theatres. In the remaining '50 cities the degree of first-run 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 theatres played less than eleven 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 theatres pla.ved 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. In 19 of said 50 cities less than three defendantdistributors licensed their product on first-run to independent theatres. In a majority of said 50 cities the major share of all of the defendants' features were licensed for first-run exhibition in theatres affiliated with the major defendants. 148(a). Viewed collectively, the major defendants owned 60 per cent of the first-run theatres in cities with populations between 25,000 and 100,000. 148(b). In addition to the proof of monopoly control in cities of more than 26.000, there is substantial proof that in approximately 238 towns involving in all but about 17 cases populations of less than 26,000 but having two or more theatres, some single one of the five major defendants, or in about 18 cases two of the defendants, had all the theatres and therefore possessed a complete local monopoly In exhibition. (See Government Exhibit 488). This Findini: is not applicable to Loew's, which had no theatres In the foreroins 148(c). The film distribution in the 1943-44 season shows that one or more of the five major defendants exhibited on first-run substantially all of the feature films distributed by the five major defendants in about 43 of the 92 cities of over 100 thousand, and substantially all of the feature fi'ms distributed by the eight defendants in about 143 of the 320 cities of 25,000 to 100,000. (See Government Exhibits 489, 490, 490A). 148(d). As distributors, the five major defendants viewed collectively, received approximately 73 per cent and the three minor defendants 21 per cent of the domestic film rentals from the films, except Westerns, distributed in the 1943-44 season. 148(e). The percentage of first-run theatre ownership and domestic film rentals controlled by the major defendants when coupled with the strategic advantages of vertical integration created a power to exclude competition from the distribution and exhibition markets when desired. 148(f). This power might be exercised either against non-affiliated exhibitors or distributors, for the ownership of what was generaly the best firstrun theatres coupled with the possession by the defendants of the best pictures, enabled them substantially to control the market in first-run pictures. 148(g). There is substantial proof that the intent to exercise the monopoly power existed among the defendants. 149. Loew's operates first-run theatres 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 "flrst-run' features 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 theatres 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 theatres in 16 and licenses its features to them. In four of the remaining cities, none of the defendants has theatre interests. This leaves 72 cities in which there are first-run theatres 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 theatres in the very largest cities, the 18,000 and more theatres in the United States exhibit the product of more than one distributor. Such theatres could not be operated on the product of only one distributor. 152. The major defendants aided each other in attaining a monopoly of exhibition and in restricting competition by refraining from having theatre interests in many areas where one of them had theatres. Pooling Agreements 163. In cities of less than 100.000 in population. Paramount, Warner, Fox and RKO owned or operated theatres either in largely separate market areas or in pools, without more than trifling competition among themselves or with Loew's. In cities having a population of more than 100.000, there was in general little competition among the major defendants, although considerably more than in towns of under 100,000. 153(a). In cities of less than 100,000, Paramount had complete or partial interests in or pooling agreements* with other defendants affecting 1.236 theatres located in 494 towns. In 13 of these towns containing 31 of the theatres — only 3 per cent — were theatres of another defendant. In 9 per cent of these town competition between Paramount and the only other defendant in the town was substantially lessened or eliminated by ' Pooling agreements and joint interests amonir defendants are treated in Findings 153-163 (e) and 154-164(h) as indistinguishable for the purpose of summarizing geographical distribution. 916