Dawn Pisturino's Blog

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How the Paramount Decision and the Hollywood Blacklist Changed Hollywood

on August 27, 2021

Rapid post-war changes in American society put downward pressure on studio revenues and profits.  But the Paramount decision and the Hollywood blacklist led to permanent changes that determined how Hollywood studios would conduct business from then on.

Once the Justice Department set its site on the Hollywood filmmaking industry, there was no turning back.  The first antitrust challenge by the Department of Justice came in 1938.  The Hollywood studios operated as trusts, and the Department of Justice was determined to break them up (Lewis 194).

Operating as trusts, the studios held almost complete control over the industry from film development to exhibition.  Studios released new films via a two-tier system.  Most first-tier theaters were owned by the studios.  Second-tier theaters, owned mainly by independents, were pressured by the studios into accepting certain terms if they wanted to screen first-run movies.  The studios used other scams to keep the theaters under their thumbs, such as “blind bidding (the licensing of films sight unseen) [and] block booking (the licensing of an entire slate of films in order to get access to one or two hit titles)” (Lewis 194-195).

After much legal wrangling, the Big Five – MGM, Warner Bros., Paramount, 20th Century-Fox, and RKO – signed an “interim consent decree” (Lewis 195) with the Department of Justice on October 29, 1940.  This decree allowed a system of arbitration to be set up that could resolve conflicts between theater owners and the studios.  But the decree did nothing to break up studio monopolies and end their monopolistic practices.  This led to the studios and the theater owners arbitrating a new consent decree in 1941 called the United Motion Picture Industry (Unity) plan.  The plan gave theater owners more leverage but did not go far enough to limit the power of the studios (Lewis 195).

The Supreme Court agreed to hear the Paramount case in 1948 (which also included RKO, Warner Bros., 20th Century-Fox, Loew’s-MGM, Columbia, Universal, and United Artists.)  On May 3, 1948, the Supreme Court ruled that the studios must divest themselves of studio-owned theaters across the country.  The Court reasoned that the studios had colluded to “restrain free and fair trade and to monopolize the distribution and exhibition of films” (Lewis 195).

On the plus side, the Court found the fines imposed on theater owners by the MPAA [Motion Picture Association of America] for screening films without a PCA [Production Code Administration] seal, unconstitutional (Lewis 196-197).

While domestic revenues and studio profits declined after the Paramount decision, “foreign demand for American films after the war” (Lewis 197) grew steadily.  The Cold War was in full swing.  “The Office of War Information . . . cooperated with the MPAA to establish for the studios an ideological and industrial presence abroad” (Lewis 197) which would ensure that American filmmakers would depict America in a positive light.

Within this climate of anti-Communism and competition with the Soviet Union, the Hollywood blacklist was born.  Fearing Communist propaganda and influence in Hollywood, nineteen studio employees were subpoenaed in 1947 by the House Committee on Un-American Activities.  Only ten were required to show up for questioning (called the Hollywood Ten.)  Noted playwright, Bertolt Brecht, testified in a closed session and later emigrated to East Germany (Lewis 197-198).

Members of the Hollywood Ten were generally uncooperative with the House Committee on Un-American Activities and were ultimately indicted and imprisoned for contempt of Congress.  At first, the MPAA publicly supported the Hollywood Ten.  Its president, Eric Johnston, declared, “There’ll never be a blacklist” (Lewis 200).  But shortly after he backtracked, saying, “We did not defend them” (Lewis 200).  After the Hollywood Ten were indicted and sentenced, the MPAA helped to institute “an industry-wide blacklist” (Lewis 200).

The blacklist benefited the studios financially because the contract system was slowly being replaced by “the union-guild movement” (Lewis 200).  The blacklist allowed studios to exert a certain amount of control over actors, guilds, agents, and lawyers.  At the same time, financiers in New York supported the MPAA and gave them more control over the Hollywood studios (Lewis 200).

As a result of the indictments and subsequent blacklist, the studios cancelled contracts and refused to pay members of the Hollywood Ten.  Civil suits dragged on for years.  Hundreds of “writers, directors, producers, and actors were blacklisted between 1947 and 1957” (Lewis 200), resulting in bitter feelings against the Hollywood studios.

Although the Hollywood studios lost financially when divestiture was ordered by the Supreme Court, they gained more power and control as a result of the Hollywood blacklist when the union-guild movement eventually replaced the contract system.

Dawn Pisturino

Thomas Edison State University

January 9, 2018

Copyright 2018-2021 Dawn Pisturino. All Rights Reserved.

Works Cited

Lewis, Jon. American Cinema: A History. New York: Norton, 2008.

7 responses to “How the Paramount Decision and the Hollywood Blacklist Changed Hollywood

  1. Really interesting subject area as little known about the truths of how it operates or the level of dysfunction and corruption involved ❤️👍

    Liked by 2 people

  2. True, True, True that was the downfall of a once good industry for the most part that sank into utter corruption and evil. Metaphorically speaking it literally is a representation both figuratively and literally of what has happened to America.

    I know firsthand what this was and is that took hold of our culture and Nation as I was there at a crossroads; which now Out of the Shadows the documentary revealed and it was and is much worse than what I sensed was going on back when I was traveling through that Studio Gate into the Dream Factory which was becoming a Gateway to Hell.

    Here is a piece of the article I wrote about that transitional event as I experienced some of it.

    “I felt how something bad and ugly wanted me for some ulterior design and of course now many years later reading what Mike Smith is saying as the main narrator of the documentary “Out of the Shadows” from his own personal experience Out of the Shadows.; along with many life experiences I had since then, there is no doubt in my mind that the unseen I was sensing was the demonic forces from hell itself looking at me as a great prize to win over to the world of make-believe and decadent sins of lust and pleasure amongst many plastic people, to be used and prostituted in an industry full of all types of freaks and devious wicked minded individuals, AKA the Harvey Weinstein Club and like-minded liberal Democrats and so on! After feeling this and carefully praying with all of my heart asking God in the name of Jesus to help me make the right decision I decided and knew I should get the hell out of there, so I actually moved out of LA to another locale up in Northern California for a time and eventually out of the state, a short time becoming a news and sports videographer.”

    Is it any wonder so much negative and horrible change has taken place in our beloved Great America! A shaping of minds and hearts from the inside-out that slowly has taken control of the public consciousness by slowly but ever so surely releasing toxic poison into the bloodstreams of countless American’s!

    Getting Lost in The Hills

    God bless America and all decent Patriotic law abiding Citizens!

    Brother in Christ Jesus,
    Lawrence Morra III

    Liked by 2 people

    • Yeah, that’s why you see Hollywood stars moving out of Hollywood, working on Broadway and other projects, and moving to other countries. Those women who squealed on Harvey Weinstein knew about his behavior for years before they ever came forth and either participated in it to get roles or just kept their mouths shut. Blacklisting is still very much alive in Hollywood. Actors like James Woods can attest to that.

      Liked by 1 person

      • I agree with all you said it’s all spot-on and a messed up industry just like much of society these days but the old adage that my Dad told me as a teen that, “some people will sell their souls to make it in that business,” became ultimately far more true and prevalent all the years after my Dad said that!

        And you’re right James Woods, Mel Gibson, Jim Caviezel, Denzel Washington, Julianne Moore and others who were able to beat the odds staying true to their morals and standards; because that Industry can fester and propagate immorality in a heartbeat; with so much pressure to succeed coupled with exceeding temptations and “all that glitters is not gold.” It really is a lot more Hollyweird than what it once was in the Golden Age of Hollywood!

        Great posting Dawn and got me thinking as well as remembering, how I could have stayed and easily fell into a quagmire, so was the risk worth it; I say no. And I just didn’t feel right with trying to hack it out in such an unpredictable and insecure atmosphere of so much uncertainly with overnight success stories but also crash and burn horrors as well! Lots of drunk and party atmosphere all over the place at the time too; as Mom would say back then when asking for her opinion; “you’re just inviting trouble.”

        Maybe 9 to 5 jobs aren’t so bad after all!
        Thank you for the interesting article!

        Liked by 1 person

  3. So much for the illusion, we still have/had about the freedom of expression. I guess it was never real.
    The corporations will always win and if they are forced to backtrack they will find a way through the backdoors. It is left to the conscious minds to make sure history does not forget.

    Liked by 2 people

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