Paramount Consent Decrees and the Callicoon Theater

By FRITZ MAYER
Posted 12/4/19

CALLICOON, NY — Antitrust action playing out in Washington D.C. involving the U.S. Department of Justice (DOJ) and the Supreme Court of the United States (SCOTUS) may at some point have an …

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Paramount Consent Decrees and the Callicoon Theater

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CALLICOON, NY — Antitrust action playing out in Washington D.C. involving the U.S. Department of Justice (DOJ) and the Supreme Court of the United States (SCOTUS) may at some point have an impact on independent theaters all over the country, including the Callicoon Theater.

At issue are the Paramount Consent Decrees, which were created by SCOTUS in 1948 to limit some of the monopolistic practices of the big Hollywood movie studios; for instance, the decrees prohibit the studios from owning movIe theaters.

As part of a larger effort to get rid of some 1,300 “legacy” decrees, that, according to DOJ, no longer serve the public good, the department announced on November 18 that is has begun the process of bringing the Paramount Consent Decrees to an end by filing a motion with the court.

There are several concerns that independent theater owners have about the ultimate impact on their operations, if the court allows the decrees to be ended.

Kristina Smith, who has owned the Callicoon Theater since August 2018, said there are three areas of concern. One is that the big studios may be able to dictate the price of tickets at the theater. Smith said she keep prices reasonable with an understanding of the area in which the theater operates. She does not think executives at Disney or Warner Brothers would be as in touch with the community as she is as a local business woman.

Another concern is called “block booking,” where a studio may demand that in order to exhibit a popular film such as “Frozen 2,” for three or four weeks, a studio might also demand that the theater owner also agree to show another, less popular film at a different time of the year causing the theater to lose money.

Another step studios might make is to make a deal to show blockbuster hits with only one of the three main theater chains in the county, freezing out the other two and all of the independents.

Smith said there are already hurdles to jump even with the Paramount Consent Decrees in place. It is already the case that as a single screen theater she cannot show a film such as “Frozen 2” that might appeal to children in the afternoon, and another one such as “Knives Out” that might appeal to adults at night.

She said it is also the case that studios mandate three- or four-week runs of some popular movies. Smith said there aren’t enough people in this area to generate an audience for that long, and by the third and fourth weeks she would lose money.

There are differences of opinions about whether the studios will be interested in buying theatres if the decrees are removed. Some analysts say the studios won’t be interested in a business model that is fading. Smith isn’t so sure.

She cited the film “The Irishman,” produced by Netflix as an example. It had a very limited theatrical release before jumping to the streaming service. Suppose Netflix could create super-deluxe theaters in urban centers and show films like “The Irishman” for a few weeks before putting it on its streaming service. “They could charge people $60 per ticket. People pay that much for Broadway shows,” Smith said.

Smith said she hopes that rules governing theaters with three or fewer screens could be adopted to help keep independent theaters up and running. Whatever happens, theater operators will be watching SCOTUS and the DOJ closely as the process moves forward.

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