Sony Pictures Entertainment is acquiring Alamo Drafthouse Cinema and will operate its 35 locations, a rare example of a traditional Hollywood studio owning a theater chain.
The deal, announced Wednesday, followed the Justice Department’s decision in 2020 to void Paramount’s so-called consent decrees — film distribution rules dating back to 1949 that forced Hollywood’s biggest studios to sell their film holdings. These rules were intended to prevent studios from controlling the film business, from creation to exhibition.
In 2019, the Justice Department’s then-head of antitrust, Makan Delrahim, said changes in the entertainment industry “made it unlikely that the remaining defendants would be able to reinstate their cartel.” Sony’s move could open the door to similar deals from other top studios. In recent years, Netflix, the leading streaming company, has bought movie theaters.
Alamo, the seventh-largest theater chain in North America, operates theaters in 25 metro areas in the United States and has invested in separate programming and food offerings in an effort to lure moviegoers away from big multiplexes.
Terms of the deal were not disclosed. Sony bought Alamo from Altamont Capital Partners and Fortress Investment Group, as well as the chain’s founder, Tim League. Mr League said the cinema chain was “beyond excited” about the deal.
It comes at a time of financial trouble for the Alamo and for movie theaters as a whole. Several of Alamo’s franchise locations filed for bankruptcy and closed this month, making Sony’s move a potential lifeline for the struggling chain. Alamo filed for Chapter 11 bankruptcy protection in 2021 before a private equity firm stepped in.
The theaters will continue to operate under the Alamo Drafthouse brand, Sony said, although they will be run by a newly formed Sony division led by Michael Kustermann, Alamo’s chief executive.
“Alamo Drafthouse has always held a high regard for the art of cinema and the theatrical experience, which are fundamental shared values between our companies,” said Tom Rothman, CEO of Sony Pictures Motion Picture Group.
The industry has faced multiple headwinds in recent years, as the pandemic caused a drop in box office receipts — and, more recently, a dismal start to the summer blockbuster season — while Hollywood strikes reduced the number of movies studios put out.
Ticket sales in the United States and Canada for the year to date are just over $2.8 billion, down 26% from the same period last year, according to Comscore.
