Antitrust rules barring studios from owning movie theaters were swept aside Friday after a federal judge approved an effort by the Justice Department to do away with the Paramount Consent Decrees.
These laws have been in effect since the golden age of movies. They were intended to break up the stranglehold that major studios such as Warner Bros., 20th Century Fox, and Paramount once maintained on the business by preventing them from owning both the means of production and distribution. Other studios, however, such as the Walt Disney Company and Lionsgate, which became distributors after the law went into effect, were not subject to the rules.
The move comes after the department proposed eliminating the regulations last fall, noting that they were anachronistic and failed to predict the complex ways that various forms of entertainment are made and distributed.
On Friday, U.S. District Judge Analisa Torres found “…that termination of the Decrees is in the public interest.”
It’s unlikely that the decision will change how business is conducted in Hollywood. Movie theaters are suffering an existential threat due to the coronavirus and entertainment companies have become increasingly dependent on television and streaming in recent years. Judge Torres noted this new landscape, writing, “as internet movie streaming services proliferate, film distributors have become less reliant on theatrical distribution. For example, some independent distributors, relying on subscription, instead of box office revenues, currently release movies to theaters with either limited theatrical runs or on the same day as internet movie streaming services. Netflix, which plans to release over fifty movies this year, ‘mostly bypasses theaters.’”
Even before the pandemic, attendance at cinemas was flat. The move to do away with the decrees was part of a larger anti-regulatory drive on the part of the Trump administration and was not a major focus of the movie studios.
Eliminating the rules will also eventually lift restrictions against “block booking” and “circuit dealing” after a two-year sunset period. Doing away with those regulations will allow studios to force theater owners to show films limited commercial prospects if they want access to their more popular franchises.