Sony Pictures Entertainment has purchased Alamo Drafthouse Cinema, the innovative movie theater chain known as a premier movie destination, including at its Downtown Los Angeles location.
The Culver City-based studio said Wednesday that the original Austin, Texas-based exhibition company will be housed in its new Sony Pictures Experiences division, led by Alamo Drafthouse’s Michael Kustermann.
Kustermann will retain his role as general manager of the cinema chain.
Sony did not disclose the price of the deal but promised to “preserve the distinctive Alamo Drafthouse movie theater experience.” The exhibitor — which has 35 locations in major U.S. cities, including Los Angeles, San Francisco, Chicago, Boston, Austin and New York — is known for serving food and craft beer in its theaters.
It’s also famous for its strict no-texting policy and special screenings, which have made it a movie buff’s paradise. The channel regularly organizes thematic “cinema evenings” inspired by certain titles. (Upcoming film screenings in Los Angeles include 2007’s “Hot Fuzz,” 1984’s “Purple Rain” and 1939’s “The Wizard of Oz.”)
“Alamo Drafthouse’s differentiated movie experience, admired brand and dedicated community align well with this vision,” said Ravi Ahuja, president and chief operating officer of Sony Pictures Entertainment, in a statement. “We look forward to building on the innovations that have made Alamo Drafthouse successful, and of course, we will continue to welcome content from all studios and distributors.” »
Alamo Drafthouse says it is the seventh largest movie theater chain in North America. In a limited sense, Sony’s acquisition of Alamo is a throwback to Hollywood’s golden age, when major studios also owned and operated their own theater chains, thereby controlling production, distribution and exploitation.
This system of vertical integration sparked a major antitrust case that resulted in a 1948 U.S. Supreme Court decision that effectively broke up studio oligopolies. In a series of settlements known as the Paramount Decrees, the studios agreed to divest their theatrical assets.
However, under the Trump administration, the Justice Department rescinded the executive orders, deeming them obsolete.
Sony’s acquisition of Alamo Drafthouse has, unsurprisingly, sparked debate online, with some suggesting the movie theater business is on a slippery slope that appears increasingly vertical.
“Maybe this comparison could be used,” said Shelleen Greene, a professor of film and media studies at UCLA. “But it’s also a very different time. … It’s another sign of acclimation to a change in theater attendance, audience numbers and the ongoing adaptation to streaming services.”
Greene sees this moment not so much as signaling a return to vertical integration, but rather as a new effort by studios to increase theater attendance, “reimagine the experience of going to the movies,” and stay relevant.
“Alamo is a different type of exhibition space,” Greene said. “It’s not passive cinema. … This is what Sony is looking for in the future.”
Today, entertainment companies control production, distribution, and exhibition in a different sense: Most major studio parent companies own streaming services. Sony is the only major studio without a mainstream streamer to compete with Netflix, although it does offer niche direct-to-consumer services, including anime release Crunchyroll.
Restrictions on studios owning movie theaters were eased in the decades following the executive orders, as studios began to branch out into the exhibition space.
Sony for a time owned the Loews theater chain, which is now part of AMC. Paramount Pictures and Warner Bros. have owned the Mann movie theater chain for many years.
Disney has long operated El Capitan on Hollywood Boulevard, where it screens its films and hosts special events. Netflix acquired the famous Egyptian Theater on Hollywood Boulevard from the American Cinematheque, as well as the Bay Theater in Pacific Palisades, where it also screens its own films.
In recent years, the line between exhibition and distribution has become increasingly blurred, with large exhibitors such as AMC Theaters releasing titles directly into their own theaters. After “Taylor Swift: The Eras Tour” was ranked among the highest-grossing films of 2023, AMC indicated that it intends to expand further into the distribution pool in the future.
“What used to be more limited categories … are now becoming much more fluid,” Greene said. “It’s a time of experimentation.”
For memory :
12:38 p.m. June 12, 2024A previous version of this article incorrectly stated that the Alamo Drafthouse location in Los Angeles was the operator’s only California theater.
Under Sony, Alamo Drafthouse will retain all of its existing locations, including its only Southern California theater, which opened in downtown Los Angeles in 2019.
The studio acquired Exhibitor from private equity firms Altamont Capital Partners, Fortress Investment Group and founder Tim League, who launched Alamo Drafthouse with a single-screen Austin repertory theater with his wife, Karrie, in 1997.
Like many movie theater operators, Alamo Drafthouse has struggled in the wake of the COVID-19 pandemic, which closed movie theaters for months. The company filed for Chapter 11 bankruptcy in 2021, citing issues related to the pandemic.
It emerged from bankruptcy under the ownership of a group of senior creditors, which included Altamont and Fortress.
Cinema chains continue to face challenges as the box office struggles to recover from the pandemic. Year-to-date, ticket sales in the United States and Canada are down 26% compared to the same period in 2023, according to Comscore.
“We are thrilled to make history with Sony Pictures Entertainment and to have found the perfect home and partner for Alamo Drafthouse Cinema,” Kustermann said in a statement. “We were created by movie fans for movie fans. We know how important this is to Sony and this is further proof of their commitment to the cinematic experience.
A handful of Alamo Drafthouse franchises have recently closed their doors in the Dallas-Forth Worth area, citing poor box office.