SIMPP v. Paramount Theatres

The Paramount Theater Monopoly: The History of United Detroit Theaters

The independent producers who formed SIMPP, including Walt Disney, David O. Selznick, and Sam 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

Two views of the Paramount theaters in Detroit - Before and After:  LEFT: Luxurious interior of Paramount's Palm-State Theatre built in 1921. RIGHT: In its declining years, the Paramount movie palace called The Michigan was converted into indoor garage.

The history of the Detroit monopoly went back to Adolph Zukor's theater-buying spree of the 1920s. Before Paramount invaded eastern Michigan, a film exchange known as the Cooperative Booking Office controlled most of important theaters in Detroit. This Michigan cooperative was one of the great examples of the booking agencies that sprang up in various parts of the country, created by neighborhood theaters to protect their interests from the rise of the distributor-owned circuits.

George W. Trendle (left) and John H. Kunsky. Photo taken from a detail of an advertisement for the Kunsky-Trendle Broadcasting Corporation in 1933. Trendle was the president; Kunsky vice-president.

Four of the first-run theaters in Detroit were owned by Cooperative members John H. Kunsky (a.k.a. John King) and George W. Trendle. Kunsky, the proprietor of Detroit's first movie house, also pioneered quality exhibition by opening an elaborate Detroit movie theater in 1911 while most of the country was still reacting to the nickelodeon boom.

During 1929 and 1930 Zukor engaged Paramount in its last important wave of theater acquisition. Prompted by the failed Paramount-Warner merger in September 1929, Zukor added another 500 screens to his film empire in various parts of the country. In Michigan he took over the theaters belonging to the Cooperative Booking Office. He ruthlessly demanded the Cooperative's complete withdrawal from the motion picture industry, and later forced Kunsky and Trendle to enter into a covenant never to reenter the movie business in Detroit. Zukor transferred the theaters to a Paramount subsidiary named United Detroit Theatres. The two former Detroit exhibitors decided to concentrate on the radio business, and formed the Kunsky-Trendle Broadcasting Company whose flagship station WXYZ introduced the Lone Ranger in 1933.

CLICK HERE for more information on George W. Trendle and the Lone Ranger

The remnants of the old theater cooperative were acquired by another midwestern exchange in February 1930. Remaining independent of all Hollywood studios, the organization was briefly known as the Midstates Theatres, Inc. before it was reorganized into the Cooperative Theatres of Michigan in June 1934. After a short period of direct competition with United Paramount, the Cooperative decided to collaborate with the Paramount circuit instead.

Because of its dominant regional monopoly, the massive chain secured the right of first refusal from all major Hollywood distributors, except Fox, which owned the only other first-run theater in the region. However even the Fox theater adhered to the rigid booking procedure in the region due to Paramount's exhibition power in Michigan. (Ironically, the Fox theater had formerly been a United Artists house back before Twentieth Century-Fox absorbed the UA chain.) Acting as a massive buying combine, the size of the Cooperative Theatres fluctuated over the years. At the time of the SIMPP lawsuit, the organization controlled over 100 theaters in the Detroit area, and another 24 in outlying areas.

In an unsuccessful antitrust case more than a decade earlier, several other independent theaters sued the Cooperative and the major distributors for acting in concert. The case was thrown out by the District Court judge who claimed that the independent theaters' body of evidence failed to show conspiracy in restraint of trade nor any involvement of interstate commerce. The independent producers on the other hand satisfied the interstate requirement since they negotiated film licenses from out of state. They also felt that with the Jackson Park victory, as well as the Crescent and Schine Supreme Court cases, there should be no problem bringing antitrust charges against Paramount's Michigan monopoly.

When the Society of Independent Motion Pictures (Walt Disney, Sam Goldwyn, David O. Selznick, and others) filed suit against United Detroit, the independent producers ridiculed the "highly artificial and restrictive system of picture runs" and stringent booking procedure—first run, second run, pre-key run, key run, sub-key run, third-week run, etc. Paramount had even implemented a bizarre and extreme method of block booking where different theaters ended up showing the same films at the same time. The Society claimed that the Detroit situation represented a movie monopoly in its most advanced form.

CLICK HERE for the lawsuit the independent producers brought against the Paramount monopoly: SIMPP v. United Detroit

SOURCES:

History of the United Detroit Theatres and Cooperative Theatres of Michigan: SIMPP v. United Detroit, Complaint, August 24, 1948, pp. 19-24, NARA.
Rise of cooperative buying and booking agencies for independent exhibitors: see Conant, Antitrust in the Motion Picture Industry, p. 57, which also mentions the predatory tactics of the Co-operative Theatres of Michigan.
John H. Kunsky (a.k.a. John King) and George W. Trendle: Kunsky in 1905 and 1911, see George B. Catlin, The Story of Detroit, and Koszarski, An Evening's Entertainment, p. 10. Apparently Trendle was kept on as manager of the Paramount theater holdings in Detroit until 1937 when he was fired for negligence, see Goldenson, Beating the Odds, pp. 36-37, 299. Information on the Kunsky-Trendle Broadcasting Company: see "History of Michigan AM Broadcasting," Michigan Broadcast Guide: <http://www.michiguide.com/history>; George Trendle and the Lone Ranger: Fran Striker, Jr., "The Real Lone Ranger: Fran Striker," excerpted speech given at the South Jersey Series Collectors meeting, Cherry Hill, New Jersey, February 25, 1995; Jack French, "The Miser of Motown: George W. Trendle," Old-Time-Radio, The Vintage Radio Place: <http://www.otrsite.com>.
United Detroit and Cooperative Theatres antitrust allegations: SIMPP v. United Detroit, Complaint, pp. 25-30; independent theater opposition: Colonial Theatrical Enterprise, Inc., et al v. Cooperative Theatres of Michigan, et al, no date (c. 1934), case number 6476, four-page decision by Edward J. Moinet - United States District Judge, courtesy of AMPAS; run, zone, clearance in Detroit: SIMPP v. United Detroit, Complaint, pp. 17-18; the "highly artificial and restrictive": "Independent Film Producers File Anti-trust Theater Suit."

See Bibliography.