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The Paramount Decrees have been the rules of the road for Hollywood since the golden age of movies, but the Justice Department’s decision to do away with directives that were hammered out decades before the rise of cable or streaming has barely registered within the entertainment industry.
That’s because they are widely seen as anachronisms — an attempt by the federal government to break up the stranglehold that studios once maintained on the business by preventing them from owning both the means of production and distribution. Under the regulations, a group of movie companies, which includes the aforementioned Paramount, as well as Universal, Warner Bros., Twentieth Century Fox, Sony and United Artists were barred from owning major theater circuits. But some of these companies, such as Sony, Paramount, and Warner Bros. still managed to make tentative steps into the exhibition space over the years, owning stakes in theater chains, obtaining waivers with minimal blowback.
Letter - Law - Spirit - Terms - Enforcement
“It was the letter of the law, but the spirit was not there in terms of enforcement,” says Hal Vogel, head of Vogel Capital Management. “Everyone recognized that the rules were outdated and didn’t apply to the new economy.”
For one thing, the rules failed to include one key player, the Walt Disney Company, which was not part of the restrictions because they were not a target of the original lawsuit that brought these regulations into effect. Moreover, the entertainment landscape has changed so dramatically since the consent decrees were enacted that the companies being governed by the restrictions have changed almost beyond recognition. They are no longer family-dominated movie studios, but rather sprawling conglomerates, with interests in everything from video games to theme parks. Many of the parent companies, such as Comcast, the cable giant which owns Universal, already have a direct distribution relationship with customers. Others such...
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