In a potentially precedent-setting decision, a Los Angeles jury has found that ITC Entertainment violated antitrust laws when it packaged the motion picture “Twice in a Lifetime” for syndication. In its decision, the jury awarded the film’s producer, Bud Yorkin, $ 2.45 million.
“What happened was that ITC had packaged this commercially valuable film with 15 other films, some of which had commercial value, some of which were border-line and some of which were junk,” said Barry B. Langberg, of Langberg, Leslie, Mann & Gabriel, who represented Yorkin. “And then they refused to allow television stations to buy any of these films independently, which is block-booking. To my knowledge, this is the first time this kind of case has actually made it to a jury trial.”
In response, Gail Title of the law firm of Rosenfeld, Meyer & Susman said ITC “believes the jury’s verdict is clearly erroneous.”
“ITC will vigorously pursue an appeal and firmly believes that the appeal will result in a reversal of the jury’s decision and an affirmation of the propriety of ITC’s conduct,” she said.
So far, the jury’s decision does not set legal precedent since it’s only a trial court decision. If ITC does pursue an appeal and loses, the appellate court decision would then create legal precedent that could be cited in future cases.
“It’s not often that these cases make it to trial; they’re usually settled to avoid making them public,” said an industry insider. “But block-booking is really the dark underbelly of the motion picture industry.”
The antitrust laws pertaining to syndication require distributors to allow stations to purchase individual films, if they so choose.
Yet Larry Gershman, chairman of World Intl. Network and a former MGM TV exec, said most stations want feature films to be packaged so “they can spread their costs. From an accounting point of view, it makes sense.”
The problem, he noted, is in how distributors allocate the revenue stream.
“Traditionally … the producer always thinks his picture is worth more than the rest of the pictures in the package.”
If the verdict stands in the higher courts, Gershman said, producers and distribs will be faced with the difficult task of agreeing about the best way to divvy up proceeds from a theatrical package.
One TV station exec objected to the verdict, but disputed Gershman’s theory that stations prefer that films be packaged.
“That’s ridiculous to me,” the exec said. “I would rather buy the eight titles I like and skip the 16 I don’t like … but that is an accepted marketing practice.”
Langberg, Yorkin’s attorney, noted that station exex often are “very reluctant” to publicly go against distributors. “They’re afraid the distributors are going to cut them off,” he said. “But as adversely affected as Bud Yorkin was, the television stations are also adversely affected because ultimately it becomes the distributor who decides what a station’s programming will be.”
The jury took 2 1/2 days to find in favor of Yorkin.