Interior of an Alamo Drafthouse Cinema theater.
Alamo Drafthouse
Sony pictures has acquired Alamo Drafthouse, the seventh-largest movie theater chain in North America, the company announced Wednesday.
This is the first time a studio has bought a theater chain since the Justice Department’s antitrust division in 2020 overturned a decree that banned certain film distributors from owning cinema companies.
The Paramount Consent Decrees, issued in 1948, required major studios to divest their theaters. It was a landmark antitrust decision for the film industry that lasted for more than 70 years.
However, the decree only affected some studios. While Warner Bros., 20th Century Fox and MGM were prohibited from re-entering the theater business without court approval, other companies such as Universal, Columbia and United Artists, which did not own their own theaters at the time of the decree, were therefore not prohibited from doing so to acquire in the future.
Because of this, in the late 1980s Columbia Pictures, now under the Sony banner, was able to take a minority stake in the Walter Reade Organization, which owned fewer than a dozen theaters, and later acquired the Lowes Theater. Because of this, Disney was allowed to own the El Capitan Theater and Netflix was able to purchase the Egyptian Theater and New York’s Paris Theater.
Alamo Drafthouse CEO Michael Kustermann will remain at the helm of the dine-in theater chain, reporting to Ravi Ahuja, president and CEO of the newly formed Sony Pictures Experiences division. The company’s 35 theaters will continue to be operated by Alamo Drafthouse and its headquarters will remain in Austin, Texas.
“We look forward to building on the innovations that have made Alamo Drafthouse successful and will of course continue to welcome content from all studios and distributors,” Ahuja said in a statement.
The cinema company was purchased by owners Altamont Capital Partners, Fortress Investment Group and founder Tim League.
The acquisition came after Alamo Drafthouse filed for Chapter 11 bankruptcy protection in 2021 due to disruptions caused by the Covid-19 pandemic. It was rescued by a private equity firm. However, just last week, five North Texas locations closed after a franchisee filed for bankruptcy.
“We are pleased to make history with Sony Pictures Entertainment and to have found the right home and partner for Alamo Drafthouse Cinema,” said Kustermann. “We were created by film lovers for film lovers. We know how important this is to Sony, and it’s further proof of their commitment to the cinematic experience. Together, we will continue to innovate and bring exciting new opportunities to our teammates and moviegoers.”
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Correction: This story has been updated to accurately reflect the terms of the Paramount Consent Decrees and the timing of studio acquisitions of theaters.
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2024-06-13 03:13:23
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