Paramount Gives In

After ten years of agile legal footwork, Paramount Pictures, Inc. last week tossed in the sponge in its antitrust fight with the Justice Department. It approved a consent decree agreeing to split itself into two separate companies, one to make and distribute movies, the other to operate theaters.

Paramount President Barney Balaban put on a brave front. Said he: "The consent judgment . . . opens the way to one of the most constructive moves in the history of the corporation." But the constructive move broke up one of the biggest and most profitable U.S. movie companies at a time when the outlook for all moviemakers was none too good. On the other hand, moviegoers would benefit. "Clearances," which now prevent small theaters from showing pictures too soon after their first run, are banned. In many small towns this would give a wider selection of pictures. Among the separation terms:

P: No dual stock control, and within a year, no dual management of the new companies. In the reorganization, no stockholder will receive shares of both companies, but investors will be able to buy a limited interest in both in the open market.

P: The new theater company will be required to get rid of more than half of Paramount's 1,450 houses within three years, specifically those which are now owned jointly with local companies, or which have no competition. No new theaters may be acquired without court permission.

P: Paramount's television interests will be split up. The Chicago station (WBKB) will go to the theater company. The movie company will get the Los Angeles station (KTLA), and the controlling interest in Allen B. Du Mont Laboratories, Inc. With Paramount and RKO (TIME, Nov. 8) out of the fight, the Justice Department hoped that the rest of the "Big Five" (Loew's, Warner Bros, and 20th Century-Fox) would also come to terms.

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