Fox Broke Antitrust Pact on Bookings, Judge Says

A federal judge Friday found 20th Century Fox Film Corp. guilty of violating a 1951 antitrust agreement prohibiting the movie company from forcing local theaters to play less popular films in order to obtain bigger box-office draws.

U.S. District Judge Edmund Palmieri held Fox in criminal contempt and set sentencing for Wednesday. Also found guilty was the manager of Fox’s branch serving the Milwaukee, Minneapolis and Indianapolis region.

The Justice Department initiated action against eight major movie distributors, including Fox, as long ago as 1938 to stem an illegal practice in the film industry known as “block booking.” When a movie company block books, it forces a local theater to play a less popular film in order to get a better one.

In 1948, the U.S. Supreme Court upheld a lower court ruling that block booking is a violation of antitrust laws.

Fred Haynes, who now represents the Justice Department in the case, said the original suit led to the breakup of the old system in which the major studios were also allowed to own movie theaters.

In 1951, Fox entered into a consent degree that provided it would never block book again. The company was first accused of violating the agreement in 1978, and, without pleading guilty, it agreed to pay $25,000 to settle the charge.

Most recently, the government accused Fox--now owned by Rupert Murdoch’s News Corp.--of block booking with four popular movies and the company was indicted in October.

It was alleged that theaters that wanted to play “Flamingo Kid” had to agree to take “Johnny Dangerously” as well; to get “Cocoon” they had to take “Prizzi’s Honor”; to get “Aliens” they had to take one or both of “Space Camp” or “Big Trouble in Little China,” and to get “Mannequin” they had to take “Black Widow.”

The movie company pleaded innocent, and a two-day bench trial was held last month before Palmieri. Haynes said the department has told the judge that it will not ask for more than $500,000 in damages against Fox.