LOS ANGELES -- The Justice Department's anti-trust division has launched a routine preliminary inquiry into the proposed joint venture among CBS Inc., Columbia Pictures Industries Inc. and Time Inc. to form a $400 million new movie studio.
A department spokesman said Tuesday a proposed partnership among MCA Inc., Paramount Pictures Corp. and Warner Bros. in The Movie Channel, a pay-television service, is also the subject of a preliminary inquiry by the antitrust division.
The CBS-Columbia-Time inquiry was formally launched Monday. The MCA-Paramount-Warner Bros. inquiry has been under way for the past two weeks.
The spokesman said such inquiries are fairly routine in the case of big corporate mergers, and usually involve a review of documents, interviews with the concerned parties and potential competitors, and research into how the industry would be affected should the joint ventures be approved.
A recommendation is then made either to sue to prevent the mergers or to close the investigation. The process is expected to take several weeks.
The plan for CBS, Columbia and Home Box Office, a Time Inc. subsidiary, to join forces to create what would be the eighth major motion picture studio was announced Nov. 30. The studio would be based in the Los Angeles area.
Paramount, a unit of Gulf & Western Industries Inc., MCA Inc.'s Universal Pictures subsidiary and Warner Bros., a subsidiary of Warner Communications Inc., announced an agreement in principle to become partners in The Movie Channel service Nov. 12.
CBS and Columbia had no initial comment about the inquiry. Roger Fransecky, vice president of corporate relations for Home Box Office, said, 'Anytime you have a venture with the players you have here, something like this is expected, and in fact, is welcome. We'll fully cooperate, and we see no reason for alarm or concern.'
Paramount, MCA and Warner had no comment on The Movie Channel inquiry.