U.S. movie theater chains fear Justice Department review may hit profits

WASHINGTON: U.S. movie theater chains fear that a Justice Department review of little-known mid-century rules may result in studios getting free rein to force them to show unpopular movies in exchange for getting blockbuster releases, threatening their profits.

Before the rules went into effect, studios commonly sold multiple films to theaters as a package. The U.S. Supreme Court in 1948 ruled against the practice, called “block booking,” and others that favored studios, leading the plaintiff, Paramount Pictures, Inc, and its peers to sign consent decrees over the next few years with the Justice Department that banned such deals.

The department announced in August it was reviewing some 1,300 such decrees affecting a range of industries, which have no expiration date, with an eye toward cancelling them.

The agreements regulating relations between movie studios and theaters, which the industry calls the Paramount consent decrees, were reached in the late 1940s and early 1950s when movie theaters had just one screen, televisions were not universal, and online streaming was decades into the future.

“They’ll be able to get more of their duds played in your theaters,” said Brian Fridley, whose father started Iowa-based Fridley Theatres in the 1930s. “If you’re forced to play the less popular films, that’s going to eat up your profits. Maybe all your profits.”

The biggest U.S. movie theater companies include AMC Entertainment, Regal Entertainment owned by Britain’s Cineworld and Cinemark.

All of the studios and major movie theater companies either declined to comment or did not respond to requests for comment.