Divorce Denied

Hollywood's major moviemakers finally got shoved through the antitrust grinder--but they came out whole. Last week, eight years after the Department of Justice filed suit, a special Manhattan Federal Court denied a Government demand that the big producers be divested of their theater holdings* in order to end monopolistic practices in the distribution of films.

In the court's opinion, the defendants have clearly been violating the Sherman Antitrust Act through a complex system of fixed admission prices, block-booking, pooling arrangements, and franchises. In general, said the court, these practices would have to go; in particular, block-booking would have to give way to the auction setup in which any exhibitor could freely bid for any new films. Moreover, the exhibitor would not have to buy in blocks--i.e., take three bad films to get one good one. But the court felt that forcing the producers to sell their theaters was too drastic, and would only "create a new set of theater owners . . . quite unlikely for some years to give the public as good service as [the defendants]."

Independent owners, who have strongly backed the Government suit, feared they were now no better off than before. The major companies, owning the best theaters and having the biggest bank accounts, could always outbid them for films. The chances were that the Antitrust Division, still holding out for divestiture, would appeal to the Supreme Court and put the case back in the grinder.

* Five of the defendants, Paramount, Loew's, RKO, Warner Bros., and 20th Century-Fox, control more than 3,000 U.S. movie houses. The other defendants, Columbia, Universal and United Artists, own none.

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