Your assessment of the situation is more or less correct; it was
the Paramount Theaters chain that was eventually divested from Paramount
proper, since the government decided that it constituted a monopoly and
couldn't be allowed to continue. (Ironically, it was this divestment
that, having made Paramount Theaters an independent operation, later helped
ABC come into reality, as they were able to invest in the fledgling
network during a time it was struggling. This was viewed as a smart move
by many, since common wisdom said that this new TV thing was never going
to take off in people's homes, due to the expense in running land-lines to
individual homes, broadcast being marginal technology then. They figured
there would be TV Theaters, where you could come and pay and see TV shows,
boxing, sporting events, name it. Universal spent major bucks on this,
and even showed a major boxing event just this way as a test. And now,
of course, with satellites, and pay TV, and people gathering at sports bars
to watch pricey events, we've come full circle.)

(Why do I *know* all this stuff, when I can't retain what I ate for
lunch yesterday?)

Because studios had a monopoly, yes, they could force less obviously
commercial films down the throats of theaters. That changed with the
new rules. TV now, though, won't go through the same cycle, I think,
because a) none of the networks are stupid enough to become total
monopolies and invite the FCC in, and b) TV as a mass medium will always
be more easily targeted by special interest groups.

jms