1 00:00:01,280 --> 00:00:04,279 Speaker 1: Welcome to Stuff You Missed in History Class, a production 2 00:00:04,360 --> 00:00:13,360 Speaker 1: of I Heart Radio. Hello, and welcome to the podcast. 3 00:00:13,360 --> 00:00:16,800 Speaker 1: I'm Holly Fry and I'm Tracy V. Wilson. So this 4 00:00:16,920 --> 00:00:18,840 Speaker 1: is a part two of a two parter and in 5 00:00:18,920 --> 00:00:21,120 Speaker 1: part one we talked a little bit about the lives 6 00:00:21,120 --> 00:00:24,919 Speaker 1: of Adolf Zoocker and WW Hodginson and how their various 7 00:00:24,920 --> 00:00:27,319 Speaker 1: steps in the business world led to the creation of 8 00:00:27,360 --> 00:00:31,440 Speaker 1: Paramount Pictures and when we laughed off, Zoocker had managed 9 00:00:31,480 --> 00:00:35,040 Speaker 1: to wrangle control of Paramount from its founder. Hodginson had 10 00:00:35,040 --> 00:00:37,200 Speaker 1: ousted him in the process, and it kind of changed 11 00:00:37,200 --> 00:00:40,760 Speaker 1: the business model. Zuker had already proven himself to be 12 00:00:40,800 --> 00:00:43,920 Speaker 1: a very shrewd and insightful businessman, with the ability to 13 00:00:43,960 --> 00:00:46,640 Speaker 1: see an end goal and backwards engineered the steps he 14 00:00:46,680 --> 00:00:49,239 Speaker 1: would need to take to achieve it, and once he 15 00:00:49,280 --> 00:00:52,600 Speaker 1: became head of Paramount, Zucker applied that same approach to 16 00:00:52,640 --> 00:00:56,920 Speaker 1: the business. There In combining his production company Famous Players 17 00:00:56,960 --> 00:01:01,360 Speaker 1: Last Sky with Paramounts Distribution Company, he had consolidated two 18 00:01:01,400 --> 00:01:04,880 Speaker 1: aspects of the industry under one business and his next 19 00:01:04,880 --> 00:01:09,039 Speaker 1: step was obvious, gained control of exhibition of films as well, 20 00:01:09,360 --> 00:01:11,520 Speaker 1: and this was accomplished through two means that we're going 21 00:01:11,560 --> 00:01:13,959 Speaker 1: to talk about today, and that led to a lot 22 00:01:13,959 --> 00:01:17,760 Speaker 1: of legal trouble, and those are block booking and buying theaters. 23 00:01:18,319 --> 00:01:22,200 Speaker 1: So block booking means that when he made contracts with theaters, 24 00:01:22,360 --> 00:01:27,000 Speaker 1: Zooker would bundle movies together in one block. The exhibitor 25 00:01:27,040 --> 00:01:29,480 Speaker 1: had to take the whole block if they wanted the 26 00:01:29,520 --> 00:01:34,160 Speaker 1: most prestigious or likely blackbuster among them. That ensured that 27 00:01:34,200 --> 00:01:36,600 Speaker 1: there would be distribution for movies that had a lot 28 00:01:36,720 --> 00:01:41,720 Speaker 1: less hype, poor were sometimes just bad movies. This practice 29 00:01:41,800 --> 00:01:45,559 Speaker 1: allegedly started when Zooker started using the success of Mary 30 00:01:45,640 --> 00:01:50,120 Speaker 1: Pickford's movies to get distribution for lesser films, Although the 31 00:01:50,280 --> 00:01:52,880 Speaker 1: S and A Film manufacturing company had done the same 32 00:01:52,920 --> 00:01:56,360 Speaker 1: thing in the nineteen teens by tying the distribution of 33 00:01:56,440 --> 00:02:00,680 Speaker 1: popular Charlie Chaplin films to smaller pictures for release. But 34 00:02:00,760 --> 00:02:04,040 Speaker 1: Zoocker wasn't just tying two pictures together the way S 35 00:02:04,080 --> 00:02:06,960 Speaker 1: and A had. He was, as the name suggests, making 36 00:02:07,280 --> 00:02:11,480 Speaker 1: entire programming blocks, so a cinema would be running lots 37 00:02:11,560 --> 00:02:15,320 Speaker 1: of paramount titles. Of course, this practice both strong arm 38 00:02:15,400 --> 00:02:18,800 Speaker 1: theaters into carrying movies they didn't want, and it also 39 00:02:18,840 --> 00:02:21,680 Speaker 1: meant that independent producers struggled to get their films into 40 00:02:21,760 --> 00:02:24,440 Speaker 1: theaters where screens were cologged up with blocks of films 41 00:02:24,480 --> 00:02:29,680 Speaker 1: from Paramount. Incidentally, Mary Pickford hated this practice, even though 42 00:02:29,840 --> 00:02:33,000 Speaker 1: she was being used to generate it, and she eventually 43 00:02:33,000 --> 00:02:35,840 Speaker 1: had a clause written into her contract with Zooker that 44 00:02:35,960 --> 00:02:39,000 Speaker 1: guaranteed that her pictures would not be used for block booking. 45 00:02:39,600 --> 00:02:42,360 Speaker 1: And this actually meant that two subsidiary companies had to 46 00:02:42,360 --> 00:02:44,959 Speaker 1: be formed to produce her movies and to distribute them, 47 00:02:45,400 --> 00:02:48,240 Speaker 1: rather than carving out an exception within the famous players 48 00:02:48,320 --> 00:02:52,040 Speaker 1: Last Sky and Paramount set up. But Zooker continued the 49 00:02:52,040 --> 00:02:55,399 Speaker 1: practice with all his other pictures, sometimes blocking together more 50 00:02:55,440 --> 00:02:58,800 Speaker 1: than twenty titles. In some cases, this was more than 51 00:02:58,840 --> 00:03:02,000 Speaker 1: a small theater could even show in a year, but 52 00:03:02,080 --> 00:03:05,160 Speaker 1: they still had to agree to take this entire block, 53 00:03:05,320 --> 00:03:07,440 Speaker 1: even if that meant they got movies that they would 54 00:03:07,520 --> 00:03:11,440 Speaker 1: never run. There were also concerns that small theaters and 55 00:03:11,480 --> 00:03:15,000 Speaker 1: conservative towns would automatically have to book pictures that really 56 00:03:15,320 --> 00:03:18,160 Speaker 1: were not in line with what audiences in those places 57 00:03:18,240 --> 00:03:20,480 Speaker 1: might approve of. You know, there were definitely people that 58 00:03:20,520 --> 00:03:24,800 Speaker 1: were worried that this was going to bring um licentious 59 00:03:24,800 --> 00:03:28,200 Speaker 1: and terrifying content to the screens of their their small towns. 60 00:03:29,320 --> 00:03:33,440 Speaker 1: Here's the thing. Zooker and his colleagues certainly saw how 61 00:03:33,480 --> 00:03:36,120 Speaker 1: this staked out a huge chunk of screen real estate 62 00:03:36,160 --> 00:03:40,119 Speaker 1: for paramount pictures, but this concept was also driven by 63 00:03:40,400 --> 00:03:44,960 Speaker 1: a simple desire to streamline business. Doing separate distribution deals 64 00:03:45,000 --> 00:03:48,240 Speaker 1: for every single picture required a lot of man hours 65 00:03:48,240 --> 00:03:51,960 Speaker 1: and negotiating some in the industry. Of course, the people 66 00:03:51,960 --> 00:03:55,520 Speaker 1: who benefited from this system further argued that black booking 67 00:03:55,640 --> 00:03:59,000 Speaker 1: made the whole thing easier, and that it also guaranteed 68 00:03:59,120 --> 00:04:01,880 Speaker 1: income for stud udios, and then they could make both 69 00:04:02,040 --> 00:04:05,600 Speaker 1: hits and more experimental fair without having to fret over 70 00:04:05,680 --> 00:04:10,680 Speaker 1: bank rolling every single one individually. This also, incidentally led 71 00:04:10,720 --> 00:04:14,000 Speaker 1: to a lot of debate over whether popular films were 72 00:04:14,040 --> 00:04:17,679 Speaker 1: the good result of this system, or whether good movies 73 00:04:17,760 --> 00:04:20,520 Speaker 1: being made were the ones not getting attention because they 74 00:04:20,520 --> 00:04:25,360 Speaker 1: sat outside the larger studio system. So what constitutes a 75 00:04:25,400 --> 00:04:28,640 Speaker 1: good film was being argued right from the start. Yeah, 76 00:04:28,680 --> 00:04:31,599 Speaker 1: when I think about how people get into internet arguments 77 00:04:31,640 --> 00:04:34,920 Speaker 1: about whether or not like a Marvel movie is a 78 00:04:34,920 --> 00:04:37,360 Speaker 1: good movie or a fun movie, and other people are like, 79 00:04:37,440 --> 00:04:40,680 Speaker 1: no serious drama is good movie and that uh. These 80 00:04:40,760 --> 00:04:47,640 Speaker 1: arguments are literally a century old. So starting in one though, 81 00:04:47,760 --> 00:04:52,599 Speaker 1: the Federal Trade Commission began investigating block booking and Famous Players, 82 00:04:52,640 --> 00:04:55,600 Speaker 1: Last Sky and Paramount, in particular because they were the 83 00:04:55,640 --> 00:05:00,000 Speaker 1: biggest users of it. In three, the Federal Trade Board 84 00:05:00,040 --> 00:05:03,320 Speaker 1: it held a series of hearings to investigate the possibility 85 00:05:03,360 --> 00:05:06,480 Speaker 1: that there were, according to the New York Times, quote 86 00:05:06,520 --> 00:05:12,200 Speaker 1: the corporation, six subsidiary companies and six individuals operating in 87 00:05:12,240 --> 00:05:15,200 Speaker 1: a trust. The announcement that ran in papers about the 88 00:05:15,240 --> 00:05:18,839 Speaker 1: investigation read quote. The complaint alleges that the Famous Players 89 00:05:18,920 --> 00:05:23,520 Speaker 1: Last Kie Corporation, by progressive expansion, now dominates the exhibition 90 00:05:23,560 --> 00:05:28,720 Speaker 1: field through its ownership of production distribution agencies and theater holdings, 91 00:05:28,800 --> 00:05:33,120 Speaker 1: and because of this combination of efforts, stifles competition inasmuch 92 00:05:33,200 --> 00:05:36,520 Speaker 1: as its competitors are unable to secure first run showings 93 00:05:36,560 --> 00:05:40,280 Speaker 1: of their pictures. HD H. Condic had been chairman of 94 00:05:40,320 --> 00:05:44,080 Speaker 1: the Finance Committee of Famous Players after his firm, which 95 00:05:44,160 --> 00:05:48,920 Speaker 1: was American International Corporation, had him investigate Famous Players business 96 00:05:48,960 --> 00:05:52,080 Speaker 1: soundness to determine whether a I C wanted to invest. 97 00:05:52,720 --> 00:05:55,960 Speaker 1: An a I C did invest and underwrote a stock 98 00:05:56,040 --> 00:06:00,840 Speaker 1: issue worth ten million dollars. Conics detailed knowledge of Famous 99 00:06:00,839 --> 00:06:04,520 Speaker 1: Players finances led to him testifying before the Federal Trade 100 00:06:04,560 --> 00:06:07,799 Speaker 1: Commission during a hearing that took place in late April. 101 00:06:09,279 --> 00:06:13,400 Speaker 1: Conic gave the following statement in that testimony quote. Naturally, 102 00:06:13,600 --> 00:06:17,320 Speaker 1: Mr Zucker was ambitious. He wanted his company to be successful. 103 00:06:17,800 --> 00:06:20,760 Speaker 1: He wanted to have weekly receipts as large as possible, 104 00:06:20,800 --> 00:06:24,160 Speaker 1: and he was anxious to do anything to bring this about. 105 00:06:24,240 --> 00:06:26,680 Speaker 1: His goal was to have the best and most successful 106 00:06:26,680 --> 00:06:29,840 Speaker 1: motion pictures. Mr. Zucker was of the opinion that at 107 00:06:29,839 --> 00:06:32,880 Speaker 1: the time that the Famous Players Company dominated the industry, 108 00:06:33,120 --> 00:06:36,039 Speaker 1: and the acquisition of the theaters and key cities, which 109 00:06:36,040 --> 00:06:38,599 Speaker 1: would be made possible through the issuance of ten million 110 00:06:38,600 --> 00:06:42,000 Speaker 1: dollars worth of preferred stock, would make sure the permanence 111 00:06:42,040 --> 00:06:44,400 Speaker 1: of the situation by giving an outlet to all of 112 00:06:44,480 --> 00:06:47,720 Speaker 1: his pictures. But he's referring to there is that Paramount 113 00:06:47,720 --> 00:06:51,400 Speaker 1: had purchased more than three hundred first run theaters by 114 00:06:51,440 --> 00:06:54,760 Speaker 1: one in all of the major markets using that money, 115 00:06:54,760 --> 00:06:57,640 Speaker 1: and you can bet that those theaters were getting all 116 00:06:57,760 --> 00:07:01,599 Speaker 1: of the most anticipated movies. When Conni was cross examined 117 00:07:01,760 --> 00:07:05,240 Speaker 1: the Council for the respondent focused the initial question on 118 00:07:05,320 --> 00:07:08,760 Speaker 1: defining what he meant by domination, and he clarified that 119 00:07:08,839 --> 00:07:12,800 Speaker 1: he meant superiority. Council then followed up by asking if 120 00:07:12,880 --> 00:07:17,480 Speaker 1: Connick agreed then that the singer Enrico Caruso dominated the 121 00:07:17,480 --> 00:07:21,360 Speaker 1: opera field, and Conic's answer was, quote, God Almighty had 122 00:07:21,360 --> 00:07:23,400 Speaker 1: a lot to do with Crusoe, but he had nothing 123 00:07:23,440 --> 00:07:26,120 Speaker 1: to do with the famous players. Connich then went on 124 00:07:26,160 --> 00:07:29,400 Speaker 1: to describe how Zooker ensured that independent producers would have 125 00:07:29,440 --> 00:07:31,880 Speaker 1: a very hard time getting their film shown in key 126 00:07:31,920 --> 00:07:36,000 Speaker 1: markets because Zoocker controlled about fift of the best movie 127 00:07:36,000 --> 00:07:39,400 Speaker 1: houses in the most important cities. We're going to get 128 00:07:39,440 --> 00:07:42,040 Speaker 1: into some of the additional testimony that was given in 129 00:07:42,080 --> 00:07:44,800 Speaker 1: these FTC hearings, but first we will pause for a 130 00:07:44,880 --> 00:07:55,960 Speaker 1: quick sponsor break. There were other witnesses that offered damning 131 00:07:56,040 --> 00:07:59,320 Speaker 1: testimony about the business practices of famous players, last Sky 132 00:07:59,400 --> 00:08:03,720 Speaker 1: and Paramount. In May, film exhibitor Joseph C. Boss described 133 00:08:03,760 --> 00:08:05,720 Speaker 1: a handshake deal that he had made with a man 134 00:08:05,760 --> 00:08:09,600 Speaker 1: who worked for Paramount named Essay Lynch. Lynch had allegedly 135 00:08:09,640 --> 00:08:12,160 Speaker 1: told Boss that if he Boss built a new theater 136 00:08:12,240 --> 00:08:15,560 Speaker 1: in Dallas, Texas and promised to enter into a contract 137 00:08:15,560 --> 00:08:18,880 Speaker 1: with Paramount that Paramount would not build a planned theater 138 00:08:19,040 --> 00:08:22,840 Speaker 1: on that street. A year later, Paramount opened a theater 139 00:08:22,880 --> 00:08:25,640 Speaker 1: across the street from his, and he was suddenly unable 140 00:08:25,680 --> 00:08:29,480 Speaker 1: to get access to big films, couldn't get lobby displays, etcetera. 141 00:08:30,040 --> 00:08:33,600 Speaker 1: The Paramount theater got all of those things six days 142 00:08:33,600 --> 00:08:37,400 Speaker 1: after Boss. Another theater owner, J. S. Burnham, of Buffalo, 143 00:08:37,520 --> 00:08:41,800 Speaker 1: gave similar testimony. Burnham said that when he turned down 144 00:08:41,880 --> 00:08:44,920 Speaker 1: the offer of a block booking with famous players Laski 145 00:08:45,040 --> 00:08:48,520 Speaker 1: through their distribution agent that was a Mr. Rose, things 146 00:08:48,559 --> 00:08:52,360 Speaker 1: became heated. Soon advertisements showed up in the local paper 147 00:08:52,520 --> 00:08:56,839 Speaker 1: encouraging people to demand that their theaters carry Paramount pictures, 148 00:08:57,480 --> 00:09:00,480 Speaker 1: and Burnham's case, he was harassed by a number of people, 149 00:09:00,720 --> 00:09:04,079 Speaker 1: and Paramount simply bought a nearby theater and started running 150 00:09:04,120 --> 00:09:08,600 Speaker 1: their movies there anyway. Testimony from additional theater owners described 151 00:09:08,640 --> 00:09:12,439 Speaker 1: Paramount sending agents into theaters to count their patrons, as 152 00:09:12,480 --> 00:09:15,719 Speaker 1: well as Paramount contracting for blocks of movies and then 153 00:09:15,760 --> 00:09:17,920 Speaker 1: not even sending all of the movies that were part 154 00:09:17,920 --> 00:09:20,960 Speaker 1: of the block. But theater owners were not the only 155 00:09:21,000 --> 00:09:24,840 Speaker 1: people that the FTC heard. Testimony from regarding the business 156 00:09:24,920 --> 00:09:29,240 Speaker 1: dealings the Famous Players, Laski and Paramount. A vice president 157 00:09:29,280 --> 00:09:33,320 Speaker 1: of Paramount named W. L. Sherry's described having his stock 158 00:09:33,360 --> 00:09:37,200 Speaker 1: in Paramount exchanged for Famous Players stock and the rights 159 00:09:37,240 --> 00:09:40,560 Speaker 1: to distribute Famous Players pictures and losing money in this deal. 160 00:09:41,080 --> 00:09:44,120 Speaker 1: He never received the promised contract and was pushed to 161 00:09:44,200 --> 00:09:47,320 Speaker 1: a lower position as head of the purchase department, was 162 00:09:47,400 --> 00:09:49,960 Speaker 1: forced into deals that lost money and put him in 163 00:09:49,960 --> 00:09:54,400 Speaker 1: a precarious financial position. Yeah, there are kajillion details of 164 00:09:54,520 --> 00:09:58,960 Speaker 1: Sherry's dealings with Paramount and how he kind of got 165 00:09:59,040 --> 00:10:02,000 Speaker 1: really taken advantag age of UM. That go on and 166 00:10:02,040 --> 00:10:04,320 Speaker 1: on and on. It could probably be their own episode 167 00:10:04,360 --> 00:10:08,719 Speaker 1: if we really wanted a Minutia episode UM. Another man, 168 00:10:08,800 --> 00:10:12,240 Speaker 1: Walter w Irwin, worked for Famous Players from nineteen sixteen 169 00:10:12,280 --> 00:10:14,760 Speaker 1: to nineteen twenty, and when he was called at the 170 00:10:14,800 --> 00:10:18,439 Speaker 1: FTC hearing, he described his job as largely being conducting 171 00:10:18,520 --> 00:10:22,520 Speaker 1: surveys of cities to identify their markets. In some markets 172 00:10:22,600 --> 00:10:25,080 Speaker 1: he was trying to figure out why they were under performing, 173 00:10:25,320 --> 00:10:29,240 Speaker 1: but in others, particularly where the company's rival first national 174 00:10:29,280 --> 00:10:31,640 Speaker 1: head of theater, he would arrange to have a new, 175 00:10:32,040 --> 00:10:35,160 Speaker 1: nicer theater built, often right across the Street from the 176 00:10:35,200 --> 00:10:38,960 Speaker 1: First National Movie House, then the new Paramount Theater would 177 00:10:38,960 --> 00:10:42,360 Speaker 1: get all the best new pictures. First National had been 178 00:10:42,400 --> 00:10:46,080 Speaker 1: outspoken in wanting to break up the trust. First Players 179 00:10:46,160 --> 00:10:49,240 Speaker 1: was alleged to be operating, even going so far as 180 00:10:49,280 --> 00:10:52,880 Speaker 1: to try to acquire Mary Pickford and retaliation for this 181 00:10:53,000 --> 00:10:56,960 Speaker 1: conspiracy against famous players, Irwin testified that he would advised 182 00:10:57,000 --> 00:11:01,959 Speaker 1: Zooker to withhold distribution to exhibitors who worked with First National. Yes, 183 00:11:02,040 --> 00:11:04,800 Speaker 1: so they didn't want to only withhold things from First National, 184 00:11:04,840 --> 00:11:07,200 Speaker 1: but basically like are you friends with them? Do you 185 00:11:07,240 --> 00:11:09,319 Speaker 1: do business with them? Then you don't do business with us. 186 00:11:10,160 --> 00:11:13,360 Speaker 1: All of these actions combined made it harder and harder 187 00:11:13,440 --> 00:11:17,679 Speaker 1: for independent filmmakers to get financing, according to Irwin, because 188 00:11:17,679 --> 00:11:20,160 Speaker 1: they had to get a distribution deal in place first 189 00:11:20,559 --> 00:11:23,000 Speaker 1: just to reassure backers that they wouldn't get shut out 190 00:11:23,040 --> 00:11:26,600 Speaker 1: of the key markets. And there was even testimony about 191 00:11:26,600 --> 00:11:31,240 Speaker 1: the forced removal of W. W. Hodkinson organized by Zooker, 192 00:11:31,320 --> 00:11:34,800 Speaker 1: who got other producers to agree to the plan. Walter E. 193 00:11:34,920 --> 00:11:37,800 Speaker 1: Green had been a partner of Hiram Abrahams, who was 194 00:11:37,880 --> 00:11:41,000 Speaker 1: placed into the president role at Paramount after the takeover, 195 00:11:41,559 --> 00:11:45,800 Speaker 1: and detailed Zooker's frustrations with Hodkinson, as well as Zooker's 196 00:11:45,840 --> 00:11:48,800 Speaker 1: plan to start acquiring first run theaters after he had 197 00:11:48,840 --> 00:11:52,600 Speaker 1: taken over. In late April of ninety three, Al Lichtman, 198 00:11:52,720 --> 00:11:56,240 Speaker 1: president of Preferred Pictures, told the FTC committee that when 199 00:11:56,280 --> 00:11:58,800 Speaker 1: he tried to get his movies placed into theaters that 200 00:11:58,880 --> 00:12:02,040 Speaker 1: had contracts with par Amount, he was always told that 201 00:12:02,120 --> 00:12:06,040 Speaker 1: they had quote no open time. Of course, the FTC 202 00:12:06,240 --> 00:12:11,280 Speaker 1: also asked W. W. Hodginson to testify. Hodginson described meetings 203 00:12:11,280 --> 00:12:14,439 Speaker 1: as far back as nineteen fifteen in which Adolph Zoocker 204 00:12:14,520 --> 00:12:18,600 Speaker 1: had pushed for the idea of combining production and distribution 205 00:12:18,800 --> 00:12:23,439 Speaker 1: under one company, something Hodginson was against. This was likely 206 00:12:23,520 --> 00:12:27,120 Speaker 1: the largest source of friction between the two men. Yeah, Zucker, 207 00:12:27,200 --> 00:12:29,080 Speaker 1: There's a lot of discussion of how much he didn't 208 00:12:29,120 --> 00:12:31,400 Speaker 1: like Hodkinson, and it really seems like because he won't 209 00:12:31,440 --> 00:12:33,640 Speaker 1: let me do what I want to do in the industry. Um. 210 00:12:34,120 --> 00:12:37,560 Speaker 1: Hodginson was very forthright in this testimony in his belief 211 00:12:37,600 --> 00:12:42,120 Speaker 1: that large studios controlling distribution was bad for the industry, saying, quote, 212 00:12:42,400 --> 00:12:44,760 Speaker 1: the history of the business has shown that the most 213 00:12:44,760 --> 00:12:48,679 Speaker 1: successful pictures have been developed by individual efforts rather than 214 00:12:48,720 --> 00:12:51,600 Speaker 1: by mass production, where there is no competition and no 215 00:12:51,720 --> 00:12:55,760 Speaker 1: necessity to have special regard to quality. The independent producer 216 00:12:55,840 --> 00:12:58,600 Speaker 1: being denied the patronage of the larger theater does not 217 00:12:58,760 --> 00:13:03,800 Speaker 1: receive compensation sufficient to successfully compete with other independent producers, 218 00:13:04,080 --> 00:13:07,240 Speaker 1: and this stands to lower the quality of the pictures. 219 00:13:07,240 --> 00:13:10,520 Speaker 1: Over the course of the investigation, the FTC amassed more 220 00:13:10,559 --> 00:13:14,480 Speaker 1: than seventeen thousand pages of testimony. Yeah, I think they 221 00:13:14,520 --> 00:13:19,599 Speaker 1: also had something like fifteen thousand pages worth of introduced 222 00:13:19,640 --> 00:13:22,280 Speaker 1: evidence in all of this. And while all of this 223 00:13:22,400 --> 00:13:24,160 Speaker 1: was going on, we should point out it was not 224 00:13:24,280 --> 00:13:27,080 Speaker 1: as though Zoocker, Famous Players, Last Key, or Paramount We're 225 00:13:27,120 --> 00:13:31,080 Speaker 1: just sitting idle as the investigation played out. Remember this 226 00:13:31,120 --> 00:13:33,320 Speaker 1: all started at the beginning of the nineteen twenties, and 227 00:13:33,400 --> 00:13:36,560 Speaker 1: literally years had gone by over the course of the 228 00:13:36,600 --> 00:13:40,040 Speaker 1: investigation where everyone kind of just kept doing business. In 229 00:13:40,920 --> 00:13:44,400 Speaker 1: six Famous Players, Last Key had a new Hollywood studio built. 230 00:13:44,720 --> 00:13:48,000 Speaker 1: They were still growing and expanding throughout the nineteen twenties. 231 00:13:48,320 --> 00:13:51,480 Speaker 1: The studio needed pictures to fill the twenty million dollars 232 00:13:51,520 --> 00:13:54,480 Speaker 1: worth of new theaters that Zucker had decided to build. 233 00:13:54,920 --> 00:13:58,040 Speaker 1: He also purchased the Balliban and Cats theater chain and 234 00:13:58,280 --> 00:14:03,199 Speaker 1: task their existing leadership with running his rapidly expanding cinema holdings. 235 00:14:03,640 --> 00:14:08,120 Speaker 1: They started operating under the name Paramount Publix. Eventually those 236 00:14:08,160 --> 00:14:10,720 Speaker 1: theaters had to have sound systems installed to keep up 237 00:14:10,760 --> 00:14:13,960 Speaker 1: with the growing demand for talkies in the late nineteen twenties, 238 00:14:14,400 --> 00:14:19,080 Speaker 1: despite the looming investigation, things were going spectacularly well, and 239 00:14:19,120 --> 00:14:21,880 Speaker 1: despite Zucker often paying way more than most people thought 240 00:14:21,920 --> 00:14:24,520 Speaker 1: was reasonable for the production of movies, the company was 241 00:14:24,640 --> 00:14:27,320 Speaker 1: raking in five million dollars in profits each year in 242 00:14:27,360 --> 00:14:30,800 Speaker 1: the mid nineteen twenties, and the number was rising. The 243 00:14:30,840 --> 00:14:34,800 Speaker 1: Paramount Building on Times Square started construction in nineteen twenty six, 244 00:14:34,840 --> 00:14:37,640 Speaker 1: with a five million dollar theater as part of that design. 245 00:14:38,280 --> 00:14:42,080 Speaker 1: In April of nineteen seven, Famous Players Last Sky became 246 00:14:42,200 --> 00:14:46,720 Speaker 1: Paramount Famous Laski Corporation. Also in nineteen twenty seven, the 247 00:14:46,760 --> 00:14:50,600 Speaker 1: studio released the Clarabo vehicle Wings, which was a huge 248 00:14:50,600 --> 00:14:53,040 Speaker 1: success and would go on to win the first Academy 249 00:14:53,080 --> 00:14:56,800 Speaker 1: Award for Best Picture in nineteen nine. But less than 250 00:14:56,840 --> 00:14:59,720 Speaker 1: two months after Wings had its first test screening and 251 00:15:00,000 --> 00:15:03,640 Speaker 1: for its premiere, the studios legal issues once again became 252 00:15:03,680 --> 00:15:07,920 Speaker 1: a more pressing problem. On July nine, seven, a cease 253 00:15:07,960 --> 00:15:10,920 Speaker 1: and desist order was issued against Famous Players Last Sky 254 00:15:11,240 --> 00:15:15,000 Speaker 1: to stop block booking. In the same order, Paramount was 255 00:15:15,040 --> 00:15:20,000 Speaker 1: also required to reform its acquisitions practices of movie theaters. Zooker, 256 00:15:20,200 --> 00:15:22,960 Speaker 1: Laski and their company were given sixty days to comply 257 00:15:23,720 --> 00:15:26,240 Speaker 1: or to submit explanations as to why they could not, 258 00:15:27,080 --> 00:15:30,320 Speaker 1: But even after two extensions on that sixty day limit, 259 00:15:30,440 --> 00:15:34,800 Speaker 1: the information that Famous Players submitted in April nine was 260 00:15:34,840 --> 00:15:37,760 Speaker 1: really just a disputation of charges, claiming that the way 261 00:15:37,760 --> 00:15:41,000 Speaker 1: that the FTC had defined block booking wasn't even how 262 00:15:41,040 --> 00:15:45,760 Speaker 1: their company did it anyway. So on April ninety eight, 263 00:15:45,880 --> 00:15:49,560 Speaker 1: the Federal Trade Commission took legal action against the Famous 264 00:15:49,560 --> 00:15:53,320 Speaker 1: Players Lassie Corporation, but it was not the only company 265 00:15:53,440 --> 00:15:57,680 Speaker 1: named in the antitrust cases. What started as two separate 266 00:15:57,720 --> 00:16:01,440 Speaker 1: cases eventually merged into one, and in addition to Paramount 267 00:16:01,480 --> 00:16:06,360 Speaker 1: and Famous Players, last Ki, MGM, Universal United Artists, First 268 00:16:06,480 --> 00:16:11,400 Speaker 1: National Pictures, Fox Film, path Ay, FBO, Educational Film Exchanges, 269 00:16:11,520 --> 00:16:16,720 Speaker 1: and Viteograph were all implicated in monopoly allegations. The case 270 00:16:16,760 --> 00:16:19,720 Speaker 1: against Famous Players Last Sky was stated by the FTC 271 00:16:20,000 --> 00:16:23,200 Speaker 1: from the beginning as being because Paramount, in part through 272 00:16:23,200 --> 00:16:27,080 Speaker 1: the use of dummy corporations to make purchases. Had become quote, 273 00:16:27,120 --> 00:16:29,840 Speaker 1: the largest theater owner in the world, and in one 274 00:16:29,880 --> 00:16:34,120 Speaker 1: week in the year nineteen, more than six thousand American theaters, 275 00:16:34,240 --> 00:16:37,240 Speaker 1: or approximately one third of all the motion picture theaters 276 00:16:37,280 --> 00:16:42,120 Speaker 1: in the United States, showed nothing but paramount pictures. Additionally, 277 00:16:42,200 --> 00:16:46,160 Speaker 1: there was corruption suspected in the compulsory arbitration that was 278 00:16:46,200 --> 00:16:49,880 Speaker 1: part of all the contracts with exhibitors. Basically, if there 279 00:16:49,920 --> 00:16:52,280 Speaker 1: was an issue, it was to be taken up with 280 00:16:52,440 --> 00:16:55,920 Speaker 1: an industry arbitration board, and those boards always seemed to 281 00:16:55,960 --> 00:17:00,160 Speaker 1: favor the studios and distributors over the exhibitors. In the 282 00:17:00,200 --> 00:17:03,680 Speaker 1: fall of nine, the New York Federal District Court ruled 283 00:17:03,720 --> 00:17:07,600 Speaker 1: against the use of compulsory arbitration and deals. This was 284 00:17:07,640 --> 00:17:10,840 Speaker 1: a blow to distributors, but the court did not in 285 00:17:10,920 --> 00:17:14,440 Speaker 1: the use of block booking, so the FTC also felt 286 00:17:14,480 --> 00:17:18,560 Speaker 1: slighted in this ruling. Both sides wanted to appeal the decision, 287 00:17:18,720 --> 00:17:21,399 Speaker 1: and so it went to the Supreme Court in nineteen thirty. 288 00:17:21,840 --> 00:17:24,119 Speaker 1: Coming up, we'll talk about how that played out, but 289 00:17:24,200 --> 00:17:34,359 Speaker 1: first we will take a quick sponsor break. The appealed 290 00:17:34,400 --> 00:17:38,480 Speaker 1: case was argued in the Supreme Court on October, and 291 00:17:38,520 --> 00:17:41,880 Speaker 1: the decision came down a month later on November. It 292 00:17:41,960 --> 00:17:45,240 Speaker 1: was not what the studios had hoped for. The decision 293 00:17:45,359 --> 00:17:48,760 Speaker 1: delivered by Justice James Clark McReynolds read in part quote, 294 00:17:48,960 --> 00:17:53,320 Speaker 1: the record discloses that ten competitors in interstate commerce, controlling 295 00:17:53,359 --> 00:17:57,120 Speaker 1: sixty of the entire film business, have agreed to restrict 296 00:17:57,160 --> 00:18:00,359 Speaker 1: their liberty of action by refusing to contract for display 297 00:18:00,359 --> 00:18:04,199 Speaker 1: of pictures except upon a standard form which provides for 298 00:18:04,320 --> 00:18:07,960 Speaker 1: compulsory joint action by them in respective dealings with one 299 00:18:08,000 --> 00:18:11,399 Speaker 1: who fails to observe such a contract with any distributor, 300 00:18:11,960 --> 00:18:15,040 Speaker 1: all with the manifest purpose to coerce the exhibitor and 301 00:18:15,160 --> 00:18:18,880 Speaker 1: limit the freedom of trade. Regarding the matter of arbitration, 302 00:18:19,040 --> 00:18:22,119 Speaker 1: the decision read quote, it may be that arbitration is 303 00:18:22,200 --> 00:18:25,840 Speaker 1: well adapted to the needs of the motion picture industry. 304 00:18:25,880 --> 00:18:30,119 Speaker 1: But when under the guise of arbitration, parties enter into 305 00:18:30,320 --> 00:18:36,600 Speaker 1: unusual arrangements which unreasonably suppressed normal competition, their action becomes illegal. 306 00:18:37,000 --> 00:18:39,680 Speaker 1: The studios, due to their use of block booking, were 307 00:18:39,680 --> 00:18:42,960 Speaker 1: found to be in violation of the Sherman Antitrust Act, which, 308 00:18:43,400 --> 00:18:46,919 Speaker 1: according to the opinion written by Justice McReynolds quote seeks 309 00:18:46,960 --> 00:18:50,439 Speaker 1: to protect the public against evils commonly incident to the 310 00:18:50,560 --> 00:18:54,879 Speaker 1: unreasonable destruction of competition, And no length of discussion or 311 00:18:54,920 --> 00:18:59,480 Speaker 1: experimentation amongst parties to a combination which produces the inhibited 312 00:18:59,520 --> 00:19:03,560 Speaker 1: result can give validity to their action. So in the end, 313 00:19:03,720 --> 00:19:06,520 Speaker 1: the FTC One and the studios are going to have 314 00:19:06,600 --> 00:19:10,680 Speaker 1: to change. Well, on paper, the timing of this case 315 00:19:10,800 --> 00:19:14,919 Speaker 1: becomes really important. The country was plunging into the Great Depression, 316 00:19:15,000 --> 00:19:18,040 Speaker 1: and that actually gave the film industry's biggest players a 317 00:19:18,119 --> 00:19:21,159 Speaker 1: break on this whole Supreme Court ruling. To enable the 318 00:19:21,200 --> 00:19:24,639 Speaker 1: industry to survive and to continue to provide entertainment at 319 00:19:24,640 --> 00:19:28,000 Speaker 1: a time when people needed it desperately, the government gave 320 00:19:28,080 --> 00:19:31,720 Speaker 1: famous players, Laski, and all the other studios a reprieve. 321 00:19:32,359 --> 00:19:36,000 Speaker 1: In nineteen thirty three, the Motion Picture Producers and Distributors 322 00:19:36,000 --> 00:19:39,960 Speaker 1: of America took advantage of the newly passed National Industrial 323 00:19:40,040 --> 00:19:43,640 Speaker 1: Recovery Act and negotiated a deal with the federal government 324 00:19:43,920 --> 00:19:48,000 Speaker 1: to protect the studios and their distribution branches. The deal 325 00:19:48,119 --> 00:19:50,639 Speaker 1: terms were fairly simple when you boil it down. The 326 00:19:50,680 --> 00:19:53,040 Speaker 1: film industry, in accordance with the n i R A 327 00:19:53,600 --> 00:19:55,879 Speaker 1: had to be willing to work with labor unions to 328 00:19:55,920 --> 00:19:59,359 Speaker 1: do their part for economic stimulus, and in return, the 329 00:19:59,359 --> 00:20:03,760 Speaker 1: court ruling was nullified. Blockbooking continued and the studios were 330 00:20:03,760 --> 00:20:06,680 Speaker 1: able to keep their hand in the distribution and exhibition. 331 00:20:07,359 --> 00:20:10,159 Speaker 1: But even though this was something of a save for Paramount, 332 00:20:10,280 --> 00:20:14,040 Speaker 1: this was still the Great Depression. There were outstanding debts 333 00:20:14,119 --> 00:20:16,400 Speaker 1: on some of the theater acquisitions that had been made 334 00:20:16,440 --> 00:20:19,760 Speaker 1: in the nineteen twenties, and some of those purchases, Zooker 335 00:20:19,800 --> 00:20:22,960 Speaker 1: and Paramount had paid for the properties with Paramount stock 336 00:20:23,400 --> 00:20:27,399 Speaker 1: and a promise to buy back shares with revenue. But 337 00:20:27,520 --> 00:20:31,040 Speaker 1: the eighty dollar per share value that had been established 338 00:20:31,040 --> 00:20:34,639 Speaker 1: in the purchase contracts left Depression near a Paramount owing 339 00:20:34,880 --> 00:20:39,040 Speaker 1: eleven million dollars and revenue was to stend free fall. 340 00:20:39,240 --> 00:20:42,320 Speaker 1: The year before the mpp DA cut their deal with 341 00:20:42,359 --> 00:20:47,080 Speaker 1: the government, Paramount lost twenty one million dollars. The company 342 00:20:47,200 --> 00:20:49,920 Speaker 1: stock fell from a value of seventy eight dollars per 343 00:20:49,920 --> 00:20:53,680 Speaker 1: share to just eight dollars. There had to be a reorg, 344 00:20:53,840 --> 00:20:58,040 Speaker 1: and more urgently, a bankruptcy filing. Financial experts were called 345 00:20:58,040 --> 00:21:00,440 Speaker 1: in to help the company, which had a very rehigh 346 00:21:00,440 --> 00:21:05,360 Speaker 1: turnover at the executive level for several years. Barney Balaban, 347 00:21:05,440 --> 00:21:08,159 Speaker 1: who had been in charge of the theatrical presence for 348 00:21:08,240 --> 00:21:12,520 Speaker 1: Paramount Publics and who had an accounting background, became president 349 00:21:12,640 --> 00:21:15,720 Speaker 1: over the whole company. Zucker became the chairman of the 350 00:21:15,760 --> 00:21:19,040 Speaker 1: board at Paramount Pictures and moved to Los Angeles permanently 351 00:21:19,160 --> 00:21:22,280 Speaker 1: instead of splitting time between the East and West coasts. 352 00:21:22,760 --> 00:21:24,800 Speaker 1: Wanted to keep a closer eye on things. As a 353 00:21:24,840 --> 00:21:29,240 Speaker 1: studio rebuilt. Under Balaband's guidance, the company started selling off 354 00:21:29,280 --> 00:21:31,760 Speaker 1: some of the acquisitions it had made, including a fifty 355 00:21:32,160 --> 00:21:35,400 Speaker 1: interest in CBS, and they let theater chains buy back 356 00:21:35,480 --> 00:21:39,800 Speaker 1: partial ownership of their cinemas. Balaban got things back on 357 00:21:39,840 --> 00:21:43,160 Speaker 1: track for Paramount and the company built up it's its 358 00:21:43,200 --> 00:21:45,919 Speaker 1: health year over year to get out of debt and 359 00:21:46,000 --> 00:21:49,199 Speaker 1: once again turned a profit. But that same year that 360 00:21:49,240 --> 00:21:53,399 Speaker 1: Balaban became president and Zucker became chairman, the National Industrial 361 00:21:53,480 --> 00:21:57,760 Speaker 1: Recovery Act was determined by the Supreme Court to be unconstitutional. 362 00:21:58,320 --> 00:22:00,480 Speaker 1: Controversial deals like the one with the m p p 363 00:22:00,640 --> 00:22:04,040 Speaker 1: d A had raised concerns over it from the beginning. Yeah, 364 00:22:04,080 --> 00:22:06,040 Speaker 1: that was one of those deals, and it was like, Hey, 365 00:22:06,080 --> 00:22:07,840 Speaker 1: we got to deal with the government. This is great, 366 00:22:07,880 --> 00:22:09,600 Speaker 1: We're saving the industry. And a lot of people were like, 367 00:22:09,640 --> 00:22:13,119 Speaker 1: wait a minute, you're doing what now? You you just 368 00:22:13,280 --> 00:22:15,359 Speaker 1: got told everything you do is illegal, and now you 369 00:22:15,400 --> 00:22:19,920 Speaker 1: can do it anyway. What is that? So studios at 370 00:22:19,920 --> 00:22:24,400 Speaker 1: this point, we're still struggling. In Walt Disney's Snow White 371 00:22:24,400 --> 00:22:27,960 Speaker 1: in the Seven Dwarfs wowed audiences and critics, but none 372 00:22:27,960 --> 00:22:30,479 Speaker 1: of the major studios had hits at that point. Remember, 373 00:22:30,480 --> 00:22:33,880 Speaker 1: Disney was like an independent. People noticed that not much 374 00:22:33,880 --> 00:22:36,880 Speaker 1: of quality was coming out of Hollywood and the studio system, 375 00:22:37,040 --> 00:22:39,920 Speaker 1: and the U. S. Department of Justice once again pursued 376 00:22:39,920 --> 00:22:43,720 Speaker 1: a case against the studio system, accusing them of a monopoly, 377 00:22:43,800 --> 00:22:46,960 Speaker 1: with the filing of US versus Paramount Pictures at All. 378 00:22:47,520 --> 00:22:50,560 Speaker 1: That at all referred to seven other movie studios Metro 379 00:22:50,640 --> 00:22:56,560 Speaker 1: Goldwyn Mayer, Warner Brothers, Twentieth Century Fox, r K O, Universal, Columbia, 380 00:22:56,680 --> 00:23:01,040 Speaker 1: and United Artists. There were also twenty five odational affiliated 381 00:23:01,080 --> 00:23:03,440 Speaker 1: companies named in the suit, as well as a hundred 382 00:23:03,480 --> 00:23:07,400 Speaker 1: and thirty two studio executives. There were also later filings 383 00:23:07,400 --> 00:23:10,679 Speaker 1: of antitrust suits against theater chains accused of colluding with 384 00:23:10,720 --> 00:23:14,600 Speaker 1: the studio system. This meant that specific studios were in 385 00:23:14,680 --> 00:23:16,960 Speaker 1: the big case, and then they were also sometimes named 386 00:23:17,000 --> 00:23:20,800 Speaker 1: as co defendants in those smaller cases. None of this 387 00:23:20,920 --> 00:23:23,880 Speaker 1: legal action was a surprise. There had been a concern 388 00:23:23,920 --> 00:23:26,600 Speaker 1: on the part of the studios that an antitrust suit 389 00:23:26,680 --> 00:23:30,760 Speaker 1: would happen. That had been there since the National Industrial 390 00:23:30,800 --> 00:23:33,840 Speaker 1: Recovery Act had been struck down. They had all adopted 391 00:23:33,840 --> 00:23:36,120 Speaker 1: a hope for the best, but expect the worst kind 392 00:23:36,160 --> 00:23:40,280 Speaker 1: of approach. A committee to develop an industry regulatory standards 393 00:23:40,320 --> 00:23:43,000 Speaker 1: had been formed before the legal action was taken. It 394 00:23:43,080 --> 00:23:46,880 Speaker 1: was chaired by twentieth Century Fox president Sydney Kent. They 395 00:23:46,880 --> 00:23:48,520 Speaker 1: did that in the hopes that it might stave off 396 00:23:48,560 --> 00:23:52,080 Speaker 1: the inevitable or at least establish intent on the film 397 00:23:52,080 --> 00:23:55,320 Speaker 1: industry's part before a trial could really get underway. And 398 00:23:55,359 --> 00:23:58,280 Speaker 1: even after the case was announced, the committee continued its 399 00:23:58,359 --> 00:24:02,119 Speaker 1: efforts at self regulation. Yeah, Sydney Kent was very vocal, like, 400 00:24:03,119 --> 00:24:06,040 Speaker 1: we'll figure this out ourselves. You don't have to come 401 00:24:06,080 --> 00:24:08,760 Speaker 1: after us legally. You have to take us a court, 402 00:24:09,400 --> 00:24:14,439 Speaker 1: it's fine. This entire thing dragged on for years and years. 403 00:24:15,400 --> 00:24:18,159 Speaker 1: The main trial began on June three of nineteen forty, 404 00:24:18,560 --> 00:24:20,879 Speaker 1: but within a couple of weeks, the studios had managed 405 00:24:20,920 --> 00:24:23,600 Speaker 1: to get the government to agree to private negotiations, so 406 00:24:23,680 --> 00:24:27,800 Speaker 1: the trial was halted. This resulted in the Consent Degree 407 00:24:27,800 --> 00:24:31,000 Speaker 1: of nineteen forty, which limited block booking to only five 408 00:24:31,119 --> 00:24:35,879 Speaker 1: films in a packaged block. Paramount MGM, twentieth Century Fox, 409 00:24:35,920 --> 00:24:38,800 Speaker 1: Warner Brothers, and R. K oh All agreed to this deal. 410 00:24:39,520 --> 00:24:42,280 Speaker 1: They could continue to operate their own theaters, but they 411 00:24:42,320 --> 00:24:45,760 Speaker 1: could not leverage that ownership to drive out competitors, and 412 00:24:45,800 --> 00:24:49,440 Speaker 1: they couldn't expand their theater holdings without consent from the government. 413 00:24:49,960 --> 00:24:53,400 Speaker 1: The Justice Department took a lot of heat for this agreement, 414 00:24:53,520 --> 00:24:57,200 Speaker 1: particularly from independent film producers who had wanted to see 415 00:24:57,240 --> 00:25:01,200 Speaker 1: the integrated studio systems broken up. While the changes seemed 416 00:25:01,280 --> 00:25:05,240 Speaker 1: drastic to some people, they seemed woefully inadequate to others, 417 00:25:05,320 --> 00:25:08,160 Speaker 1: and there were still calls for a law making any 418 00:25:08,240 --> 00:25:11,280 Speaker 1: kind of block booking illegal. There were definitely people that 419 00:25:11,359 --> 00:25:13,800 Speaker 1: were like, listen, they used to sell you twenty movies 420 00:25:13,840 --> 00:25:16,040 Speaker 1: at a time, Now it's only five. That's a big change, 421 00:25:16,080 --> 00:25:19,480 Speaker 1: And they're like, it's not. They're still doing it though. Um, 422 00:25:19,520 --> 00:25:22,680 Speaker 1: But here's the thing. Universal Columbia and United Artists never 423 00:25:22,760 --> 00:25:25,760 Speaker 1: agreed to the consent decree for various reasons. Some of 424 00:25:25,800 --> 00:25:28,359 Speaker 1: them had less interest in the whole theater chain angle 425 00:25:28,400 --> 00:25:31,400 Speaker 1: of it, and because they did not agree. On June one, 426 00:25:31,520 --> 00:25:35,200 Speaker 1: nineteen forty two, the consent decree expired, as provided for 427 00:25:35,400 --> 00:25:38,440 Speaker 1: in a clause in the decree itself. The other five 428 00:25:38,480 --> 00:25:41,360 Speaker 1: studios went back to their old practices, and the government 429 00:25:41,680 --> 00:25:45,880 Speaker 1: reopened their antitrust case. One month after World War two 430 00:25:46,000 --> 00:25:49,479 Speaker 1: officially ended, the Justice Department had the studios back on 431 00:25:49,600 --> 00:25:53,560 Speaker 1: trial started on October eighth, ninety five. The studios were 432 00:25:53,600 --> 00:25:57,160 Speaker 1: once again arguing that the business practices they employed were 433 00:25:57,160 --> 00:25:59,920 Speaker 1: part of doing smart business, but the industry at that 434 00:26:00,040 --> 00:26:03,320 Speaker 1: point was doing spectacular business, so adopting this approach as 435 00:26:03,359 --> 00:26:06,400 Speaker 1: though it were needed for survival did not really convince 436 00:26:06,440 --> 00:26:11,000 Speaker 1: the judges in the case. In May, the studios were 437 00:26:11,000 --> 00:26:16,560 Speaker 1: found guilty of conspiracy in restraint of trade. The studios, 438 00:26:16,560 --> 00:26:20,000 Speaker 1: per this ruling could keep their theater chains, but companies 439 00:26:20,040 --> 00:26:23,120 Speaker 1: could not pool their holdings to push out smaller competitors. 440 00:26:23,720 --> 00:26:25,960 Speaker 1: But the court clearly stated that it did not believe 441 00:26:26,000 --> 00:26:29,400 Speaker 1: that making movie studios separate from their theater chains would 442 00:26:29,400 --> 00:26:32,720 Speaker 1: eliminate monopolies, and they actually argued that it could damage 443 00:26:32,760 --> 00:26:37,280 Speaker 1: the theater industry, as had happened in nine. Neither side 444 00:26:37,359 --> 00:26:41,640 Speaker 1: was happy. The elimination of block booking, dismayed the studios 445 00:26:41,800 --> 00:26:45,560 Speaker 1: and not requiring studios to divest their theater holding left 446 00:26:45,600 --> 00:26:49,400 Speaker 1: the Department of Justice dissatisfied. Once again, they were headed 447 00:26:49,440 --> 00:26:53,040 Speaker 1: to the Supreme Court. The Society of Independent Motion Picture 448 00:26:53,080 --> 00:26:55,800 Speaker 1: Producers submitted its own briefs to the court as the 449 00:26:55,840 --> 00:27:00,880 Speaker 1: case escalated. Based on its own antitrust investigations, group filed 450 00:27:00,960 --> 00:27:02,600 Speaker 1: a Friend of the Court petition at the end of 451 00:27:02,680 --> 00:27:06,720 Speaker 1: nineteen forty seven, outlining their findings and demands. The Supreme 452 00:27:06,720 --> 00:27:11,160 Speaker 1: Court trial began on February nine, and while the arguments 453 00:27:11,200 --> 00:27:13,320 Speaker 1: had been fine tuned a bit since the trial in 454 00:27:13,359 --> 00:27:16,320 Speaker 1: New York the prior year, each side essentially made the 455 00:27:16,359 --> 00:27:19,639 Speaker 1: same case that they had before. The government outlined the 456 00:27:19,640 --> 00:27:22,879 Speaker 1: ways in which the studio system controlled the entire industry 457 00:27:23,000 --> 00:27:26,080 Speaker 1: in ways that it believed were illegal, and the studios 458 00:27:26,160 --> 00:27:28,800 Speaker 1: made clear that an end to the studio systems would 459 00:27:28,840 --> 00:27:33,840 Speaker 1: collapse entertainment. The Supreme Court announced its decision on May third. 460 00:27:35,040 --> 00:27:39,719 Speaker 1: The studios were once again found guilty of violating antitrust laws. 461 00:27:40,320 --> 00:27:44,200 Speaker 1: Block Booking was deemed illegal and the big change studios 462 00:27:44,280 --> 00:27:48,440 Speaker 1: could no longer operate as integrated systems of production, distribution 463 00:27:48,680 --> 00:27:51,480 Speaker 1: and exhibition. R k OH was the first to go. 464 00:27:51,600 --> 00:27:54,879 Speaker 1: It was broken up on November eight. Paramount was the 465 00:27:54,920 --> 00:27:58,040 Speaker 1: second to enter into divorcement in February the following year, 466 00:27:58,720 --> 00:28:01,240 Speaker 1: and while the remaining studio fought and actually went back 467 00:28:01,240 --> 00:28:04,400 Speaker 1: to court, the outcome was ultimately the same. The studio 468 00:28:04,440 --> 00:28:08,160 Speaker 1: system was done, block booking was over, and distribution deals 469 00:28:08,160 --> 00:28:11,960 Speaker 1: would be done individually for films going forward, finally giving 470 00:28:12,000 --> 00:28:15,800 Speaker 1: independent producers a fair chance in the business. The consent 471 00:28:15,920 --> 00:28:18,879 Speaker 1: decrees entered into by the studios were known as the 472 00:28:18,880 --> 00:28:23,240 Speaker 1: Paramount consent decrees. As the years war on, Zucker retained 473 00:28:23,240 --> 00:28:26,080 Speaker 1: the title of Chairman of the board at Paramount, though 474 00:28:26,520 --> 00:28:29,040 Speaker 1: it was less involved in the business, it was considered 475 00:28:29,040 --> 00:28:32,080 Speaker 1: more of an honorific title for him. Eventually he was 476 00:28:32,119 --> 00:28:34,760 Speaker 1: still chairman when he died in nineteent six at the 477 00:28:34,800 --> 00:28:37,959 Speaker 1: age of a hundred and three. And now we get 478 00:28:38,200 --> 00:28:41,920 Speaker 1: to what sparked my interest in doing this topic in 479 00:28:41,960 --> 00:28:46,480 Speaker 1: the first place. Because on August seven, a month ago, 480 00:28:46,520 --> 00:28:49,840 Speaker 1: as we record this, seventy two years after the Supreme 481 00:28:49,880 --> 00:28:53,360 Speaker 1: Court's ruling, In the paramount case, the decrees were deemed 482 00:28:53,400 --> 00:28:57,000 Speaker 1: outdated by the Department of Justice. U. S. District Court 483 00:28:57,080 --> 00:29:00,360 Speaker 1: Judge Ana Lisa Torres ruled the due to its changing 484 00:29:00,400 --> 00:29:04,280 Speaker 1: marketplace and changes in antitrust law, that it is unlikely 485 00:29:04,320 --> 00:29:08,000 Speaker 1: that a future violation would happen. The judges ruling also 486 00:29:08,040 --> 00:29:11,400 Speaker 1: states that quote termination of the decrease does not give 487 00:29:11,520 --> 00:29:15,920 Speaker 1: defendants or other market participants free reign to implement the 488 00:29:15,960 --> 00:29:21,720 Speaker 1: same anti competitive practices the decrees remedied termination simply implies 489 00:29:21,760 --> 00:29:25,920 Speaker 1: that this Court, in performing a quote necessarily forward looking 490 00:29:26,000 --> 00:29:31,440 Speaker 1: and probabilistic evaluation, determined that termination would be in the 491 00:29:31,520 --> 00:29:35,560 Speaker 1: public interest. If there was a future violation, however, that 492 00:29:35,640 --> 00:29:38,640 Speaker 1: party would be subject to the liability under the full 493 00:29:38,760 --> 00:29:43,080 Speaker 1: extent of federal and state antitrust laws as they are today. 494 00:29:43,200 --> 00:29:47,120 Speaker 1: Given this changing marketplace, the court finds it is unlikely 495 00:29:47,160 --> 00:29:50,480 Speaker 1: that the remaining defendants would collude to once again limit 496 00:29:50,520 --> 00:29:53,400 Speaker 1: their film distribution to a select group of theaters and 497 00:29:53,440 --> 00:29:57,320 Speaker 1: the absence of the decrees, and finds therefore that termination 498 00:29:57,480 --> 00:30:00,640 Speaker 1: is in the public interest. So the industry is now 499 00:30:00,840 --> 00:30:04,000 Speaker 1: in a two year sunset period of the decrees, so 500 00:30:04,080 --> 00:30:08,760 Speaker 1: this will all culminate and be done with. Two independent 501 00:30:08,800 --> 00:30:13,000 Speaker 1: theater owners and filmmakers have already criticized the decision. We 502 00:30:13,080 --> 00:30:15,680 Speaker 1: will see how this unfolds in the coming months. We 503 00:30:15,920 --> 00:30:17,680 Speaker 1: kind of get to live through a new phase of 504 00:30:17,720 --> 00:30:20,280 Speaker 1: what we thought was settled history. Do you have some 505 00:30:20,920 --> 00:30:24,680 Speaker 1: listener mail to take us out? I do. This is 506 00:30:26,160 --> 00:30:30,520 Speaker 1: a listener mail from our listener Jane that delighted me 507 00:30:30,640 --> 00:30:33,160 Speaker 1: so utterly I kind of couldn't deal with its rights. 508 00:30:33,200 --> 00:30:35,200 Speaker 1: Thank you for your recent White House episode. That one 509 00:30:35,280 --> 00:30:37,720 Speaker 1: hit close to home for me for several reasons. I 510 00:30:37,760 --> 00:30:40,440 Speaker 1: grew up in Stafford, Virginia. My parents house is in 511 00:30:40,520 --> 00:30:44,920 Speaker 1: Aquia Harbor, located on Aquia Creek, Government Island where Aquia 512 00:30:45,000 --> 00:30:48,320 Speaker 1: Sandstone used for the construction of White House. The US Capital, Etcetera, 513 00:30:48,440 --> 00:30:50,840 Speaker 1: is only two miles away. It's a nature preserve and 514 00:30:50,960 --> 00:30:53,960 Speaker 1: archaeological site. Today I have never been, but my friends 515 00:30:54,000 --> 00:30:56,840 Speaker 1: used to spend countless weekends hiking around there. There was 516 00:30:56,880 --> 00:30:58,720 Speaker 1: not much else to do in Stafford in the mid 517 00:30:58,760 --> 00:31:02,200 Speaker 1: to late eighties. I currently lived just twenty minutes outside 518 00:31:02,200 --> 00:31:04,080 Speaker 1: of d C. My friend worked at the White House 519 00:31:04,160 --> 00:31:06,680 Speaker 1: during the Obama administration, so my family and I were 520 00:31:06,760 --> 00:31:08,240 Speaker 1: lucky enough to have been able to go on a 521 00:31:08,280 --> 00:31:12,200 Speaker 1: private tour yes it's tiny, and also invited to the 522 00:31:12,200 --> 00:31:15,080 Speaker 1: annual Christmas party they host for employees. The immense all 523 00:31:15,160 --> 00:31:17,480 Speaker 1: you feel when you're leaving the White House and standing 524 00:31:17,560 --> 00:31:21,160 Speaker 1: underneath that famous lantern is incredible. Uh. You told the 525 00:31:21,200 --> 00:31:23,960 Speaker 1: story of Dolly Madison saving the painting of Washington, so 526 00:31:24,000 --> 00:31:25,440 Speaker 1: I thought you would get a kick out of this. 527 00:31:26,160 --> 00:31:30,680 Speaker 1: DC's Historical Congressional Cemetery hosts several fun events throughout the year. 528 00:31:31,040 --> 00:31:33,920 Speaker 1: I just signed up for baby Goat yoga ha ha. 529 00:31:34,240 --> 00:31:36,160 Speaker 1: And a few years ago they hosted a flee the 530 00:31:36,200 --> 00:31:40,000 Speaker 1: British five k run. Participants were led by Dolly Madison 531 00:31:40,040 --> 00:31:42,520 Speaker 1: in a golf cart holding the Washington portrait while being 532 00:31:42,600 --> 00:31:45,320 Speaker 1: chased by a bunch of red coats. And then Jane 533 00:31:45,320 --> 00:31:48,800 Speaker 1: included photos from their Facebook page of this event, which 534 00:31:48,880 --> 00:31:54,000 Speaker 1: is fantastic, so she writes, next time you're in d C. Yes, 535 00:31:54,040 --> 00:31:56,160 Speaker 1: I know it might be a while, side definitely check 536 00:31:56,240 --> 00:31:58,560 Speaker 1: this place out. They do history tours and set up 537 00:31:58,600 --> 00:32:00,840 Speaker 1: a full bar in one of the crypts, Halloween tours 538 00:32:00,840 --> 00:32:03,720 Speaker 1: and races. They screen movies and even have a bee hive. 539 00:32:04,000 --> 00:32:06,680 Speaker 1: The honey they sell from it is called rest in bees. 540 00:32:09,000 --> 00:32:12,000 Speaker 1: I'm sorry I made a snort laugh, but that's brilliant. 541 00:32:12,760 --> 00:32:17,320 Speaker 1: Annie Royal Elbridge, Gary Belva Lockwood, Matthew Brady, j Edgar Hoover, 542 00:32:17,440 --> 00:32:20,600 Speaker 1: John Phillips, SUSA, and Dolly Madison's wild son John Payne 543 00:32:20,640 --> 00:32:23,880 Speaker 1: Todd are among those interred here. Dolly actually spent six 544 00:32:23,960 --> 00:32:27,240 Speaker 1: years here before being moved to her final resting place. Uh. 545 00:32:27,240 --> 00:32:30,200 Speaker 1: And then she writes about two other people that are 546 00:32:30,360 --> 00:32:33,080 Speaker 1: are interred there that might be interesting and might end 547 00:32:33,160 --> 00:32:37,640 Speaker 1: up in in future episodes. Uh. Thank you Jane for 548 00:32:37,680 --> 00:32:40,720 Speaker 1: all of this. This is fabulous. Those pictures are a dream. 549 00:32:40,840 --> 00:32:43,880 Speaker 1: I love a cookie themed five K. It's like the 550 00:32:43,920 --> 00:32:45,800 Speaker 1: best way to get out and get some exercise and 551 00:32:45,840 --> 00:32:48,720 Speaker 1: also just laugh and enjoy life. So I wish I 552 00:32:48,720 --> 00:32:51,640 Speaker 1: could have been there because it looks amazing. If you 553 00:32:51,640 --> 00:32:53,000 Speaker 1: would like to write to us, you can do so 554 00:32:53,160 --> 00:32:55,560 Speaker 1: at History Podcast at iHeart radio dot com. You can 555 00:32:55,600 --> 00:32:58,160 Speaker 1: also find us on social media as missed in History, 556 00:32:58,520 --> 00:33:01,440 Speaker 1: and we are available for subscription. You can do that 557 00:33:01,480 --> 00:33:03,600 Speaker 1: on the I heart Radio app, at Apple Podcasts, or 558 00:33:03,600 --> 00:33:11,040 Speaker 1: wherever it is you listen. Stuff you Missed in History 559 00:33:11,040 --> 00:33:14,440 Speaker 1: Class is a production of I heart Radio. For more podcasts, 560 00:33:14,480 --> 00:33:16,880 Speaker 1: from I heart Radio, visit the I heart Radio app, 561 00:33:16,960 --> 00:33:20,160 Speaker 1: Apple podcasts, or wherever you listen to your favorite shows.