Hollywood Renegades Archive

The Society of Independent Motion Picture Producers

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SIMPP v. Paramount Theatres

The Day that Detroit Became a Battlefield for Movie Monopolies

The independent producers who formed SIMPP, including Walt Disney, David O. Selznick, and Samuel Goldwyn, selected one of the most notorious Hollywood theater monopolies to declare suit, in the first of what was planned to be a long line of civil antitrust cases to expose monopoly and collect damages for past independent films.

Excerpt from Hollywood Renegades by J. A. Aberdeen

In the late 1940s, the independent producers increased their antitrust activity. According to David O. Selznick, the SIMPP vendetta began when he was called over to Samuel Goldwyn's house for a meeting one night probably early in 1948.

Goldwyn, aggravated by many of the theater monopolies, wanted to discuss some of the problems with Selznick, Edward Small, and Roy Disney. ("It might have been Walt Disney," Selznick later said, concerning who was present that meeting, "or it might have been Guenther Lessing [sic: Gunther Lessing], but I think it was Roy Disney.") Goldwyn spoke about "a particularly menacing and reprehensible situation in Detroit" where a Paramount-affiliated theater chain had antagonized the independent producers for years by dominating the first-run market in eastern Michigan. The producers tentatively agreed to investigate the monopoly, and decided to involve SIMPP.

Paramount's Monopoly of Eastern Michigan

Robert J. Rubin spent several weeks putting together a preliminary report on various "tight" situations across the nation where a potential theater monopoly acted to the detriment of the independent producers. Hiring a special economist to assist in the study, Rubin surveyed all over the country, locating areas where the independent producers' films, on the whole, suffered from depressed rentals. One of these places was eastern Michigan, where the key runs were dominated by the United Detroit Theatres Corporation controlled by Paramount Pictures, Inc. The Rubin report uncovered evidence that would make Detroit an obvious target for SIMPP's first civil antitrust suit, particularly while Paramount still owned the theater chain. At the end of April 1948, just days before the Supreme Court Paramount decision, Rubin reported his findings to the SIMPP Eastern Distribution Committee.

The independent producers alleged that a monopoly was maintained in the Michigan territory by the United Detroit Theatres, 75 percent owned by Paramount Pictures, Inc., working in concert with the Cooperative Theatres of Michigan, Inc., a booking organization which negotiated film rentals for its various exhibitor member-stockholders. On paper, United Detroit controlled only four of the seven first-run movie houses in the city. Yet two of the remaining three were operated by the closely related, though separate, H. & E. Balaban corporation. And not only were the United Detroit movie houses the highest revenue-generating theatres in the region, but the collusion between United Detroit and Cooperative Theatres gave Paramount control of 90 percent of all subsequent-run revenue in the area.

CLICK HERE to read about the history of Detroit theater monopoly.

The Detroit monopoly had a policy of denying percentage engagement deals with the independent producers. In other areas producers were accustomed to share with the exhibitors in a profit-sharing box office bonanza for their popular movies. The independents attributed the overall deflated returns in eastern Michigan to the parsimonious flat deal given by the high-handed Paramount affiliate on a take-it-or-leave-it basis.

The Society of Independent Motion Picture Producers decided to start their own private antitrust case to recover damages of lost revenue from United Detroit Theatres and the Cooperative Theatres of Michigan. All legal costs would be covered by SIMPP, and reimbursed to the Society out of the settlement. They queried the producer-members, and found eight independents willing to take part in the lawsuit to recover losses on specific films. The participants were Samuel Goldwyn, Walt Disney, David O. Selznick, Walter Wanger, William Cagney, Edward Small, Benedict Bogeaus, Hunt Stromberg, and Seymour Nebenzal.

The suit was announced at three simultaneous press conferences in New York, Detroit, and Hollywood on August 24, 1948. In coast-to-coast coverage, the Society announced that war had been declared by the independent producers against monopoly control in the industry. James Mulvey presided at the New York City press conference handing out a "pound or two of mimeographed material" to reporters gathered at the Blue Room of the posh Essex House hotel. In Detroit Robert J. Rubin answered questions shortly after he filed the case in Federal Court there. And in Hollywood Gunther R. Lessing announced at SIMPP's Beverly Hills headquarters that the case—independent producers suing exhibitors—was "without precedent in motion picture history."

Walt Disney, 1940s photo. (Aberdeen collection). To purchase Aberdeen photos for reprint purposes click here.

SIMPP claimed $2,917,272 in combined damages for the independent films listed in the suit. However the treble damage clause of the Clayton Antitrust Act multiplied the compensation three-fold to over $8.7 million plus attorney fees. Goldwyn's $1.5 million share was the largest, and included films like The Pride of the Yankees (1942), Up in Arms (1944), and The Best Years of Our Lives (1946). The next largest was Walt Disney who claimed $974,000 for a film lot that contained all of his golden age full-length features from Snow White and the Seven Dwarfs (1937) to Bambi (1942). Selznick featured many of his most important 1940s films that United Artists distributed, such as Hitchcock's Rebecca (1940), Spellbound (1945), and Since You Went Away (1944).

Sam Goldwyn and Walt Disney Speak Out

The day after the case was filed, Goldwyn and Disney held a joint press conference to confirm their trustbusting position. "The antitrust suit is the opening gun in the fight of independent producers for freedom of the screen. This is the first, but not the last action," Sam Goldwyn declared, as he vowed that the independents would never rest until a free market existed for all of their movies. "We do not intend to let theatre chains turn the silver screen into an iron curtain between the public and our pictures."

Sam Goldwyn, during his anti-trust battles in the 1930s and 40s. (Aberdeen collection). To purchase Aberdeen photos for reprint purposes click here.

Immediately after Goldwyn, Walt Disney spoke. He iterated his intentions to always make high-quality groundbreaking films, and that his purpose of insisting on a greater share of the profits was not to accumulate wealth but to stay in business to make better films. He said that if SIMPP failed in its attempt to return a free market for the independent filmmakers, the public would be subject to "routine entertainment turned out on a veritable assembly line." He characterized the independents as reluctant participants who were drawn into the battle, "We now feel we can no longer afford to tolerate this situation and are obliged to take legal action."

Other Monopolies

The basic legal precedent for the SIMPP lawsuit was the 1946 Jackson Park Supreme Court case that dealt with the monopoly problems in the Chicago territory. The small, independent Jackson Park theater, which had been in operation since 1916, accused the Balaban & Katz exhibitor monopoly of an aggressive double-feature policy, unreasonable clearance, and conspiracy with the major studios. The independent exhibitor had originally sued for $120,000, but as the case made its way through the courts, the small theater was awarded nearly $1 million. SIMPP noted that of particular interest in the case was, firstly, the courts' use of the Balaban & Katz gross ticket admissions as the basis for the award and, secondly, the restraining orders issued against the Paramount theater circuit in that region. SIMPP believed that the independents could easily prove the discriminatory practices in the Detroit area by highlighting the prosperous box office of the Paramount theaters there.

SIMPP's demands were not entirely monetary either. The lawsuit sought injunctions against further monopolistic practice. SIMPP demanded the forced sale of the United Detroit theater holdings and the dissolution of the Cooperative. This was in harmony with the Society's longstanding belief that monopoly control in the industry was not just vertical, but was epidemic on many levels. If they could command a swift and absolute victory against the notorious Detroit situation, the lawsuit—SIMPP hoped—would establish a pattern that would bring other regional monopolies into capitulation, and encourage the government as it followed through with the Paramount case. Immediately SIMPP began to identify other regions of the country that would serve as the next legal battlefront once the Detroit case was ended. Unfortunately SIMPP v. United Detroit encountered unexpected problems that made the open-and-shut-case a far more involved and drawn-out ordeal.

For information on the significance of the Detroit case - see:



The Society of Independent Motion Picture Producers, et al v. United Detroit Theatres Corp., et al, case number 7589, District Court of the United States for the Eastern District of Michigan Southern Division [hereafter: SIMPP v. United Detroit].
Meeting at Samuel Goldwyn's house: SIMPP v. United Detroit, Deposition of David O. Selznick, April 28, 1949, pp. 96-100, AMPAS.
Rubin report on monopolies: Proof of Combination-Proof of Damage, Richard V. Gilbert, consulting economist at Washington, D.C., to Robert Rubin, April 13, 1948, AMPAS; "Indies Plan Screen Time Fight," HR, April 28, 1948, pp. 1, 3.
Producers authorize SIMPP to initiate Michigan case: Walter Wanger Pictures, Inc. to The Society of Independent Motion Picture Corporation, July 21, 1948, pp. 1-2, WWP.
SIMPP announces Detroit case: "Producers Allege Movie House Trust," NYT, August 25, 1948, p. 29; "SIMPP Sues Exhibs For Millions," HR, August 25, 1948, pp. 1, 4; "Independent Film Producers File Anti-trust Theater Suit," Daily News, August 25, 1948; "pound or two" and "without precedent": "Exhibitors Monopoly, Too, Says SIMPP, Filing Suit," MPH, August 28, 1948, p. 13.
Goldwyn-Disney press conference—"The antitrust suit is": "Goldwyn Hits Theater Chains," Los Angeles Examiner, August 26, 1948; "We do not intend": "60 Films Figure In Indie Suit," DV, August 26, 1948; "routine entertainment turned out" and "we now feel": "Free Screen Object of SIMPP Suit, Assert Goldwyn, Disney," HR, August 26, 1948, pp. 1, 11. Also see "Exhibitors Monopoly, Too, Says SIMPP, Filing Suit," p. 13.
Jackson Park case: see Conant, Antitrust in the Motion Picture Industry, pp. 161-177. Bigelow v. RKO Radio Pictures, 327 U.S. 251 (1946).

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