The Paramount Decrees

The case behind the decrees started in 1938. After years of litigation, including the Supreme Court decision United States v. Paramount, 334 U.S. 131 (1948), the Justice Department and the studios entered a series of consent decrees, together called the Paramount Decrees.

According to the Department of Justice, they did two things. They required the studios to separate their distribution operations from their exhibition businesses, which ended the era when a studio owned the cinemas that played its films. And they banned a set of distribution practices.

The Justice Department asked the court to end the decrees as part of its review of legacy antitrust judgments. On 7 August 2020 the federal court in the Southern District of New York terminated them with immediate effect, with a two-year sunset on the bans on block booking and circuit dealing so the industry could adjust. The court accepted that the practices of the 1940s no longer existed and that cable, home video and streaming had changed the market.

For an exhibitor today the practical point is narrower than the headlines suggested. The decrees are gone, but antitrust law is not. Distribution practices are now judged under the general rules that apply to any industry, rather than a specific court order. Zone exclusivity still exists in the form of clearance, and how a cinema gets a title is still a negotiation, covered in film booking and how movie theaters get movies.