We Shall Buy Alamo Drafthouse, Sony Decrees
Brent Lang
Well, well, well:
Sony Pictures Entertainment has acquired Alamo Drafthouse Cinema, the theater chain that inspired a passionate following with its creative cocktails, extensive food menu and strict “no talking, no texting” policies. The media company acquired Alamo Drafthouse from owners Altamont Capital Partners, Fortress Investment Group and its founder Tim League.
Under its new ownership, Alamo Drafthouse will be managed under a newly established division, Sony Pictures Experiences. In a press release touting the sale, the company said it “reinforces [Sony Pictures Entertainment’s] long-held commitment to theatrical exhibition and continued initiatives in experiential entertainment.” Alamo has been quietly soliciting offers for the past several months, but had struggled to find a buyer.
To some, this will be a surprise because well, there was a very famous Supreme Court case which ruled that movie studios could not also own the movie theaters where their movies played. Of course, that case was from 1948 – basically the height of people going to the movies in America. Just over 75 years later and the picture is very different – and far more bleak for theaters. To that end, the "Paramount Decree" was revoked a few years ago. And so now we have movie studios owning movie theaters again.
No surprise here.1 Nearly four years ago, I wrote a piece titled, It’s Time for the Movie Studios to Step In to Save the Movie Theaters. In it, I state:
It seems inevitable at this point that there’s going to need to be a new path forward. And that path may very well be one that looks similar to a path forged at the beginning of the business. That is, studios owning theaters.
...
One could imagine Disney or the like stepping in to save AMC. Perhaps with the notion that they would still agree to show other studios’ films as well. But perhaps they would go above and beyond to showcase their own. Or maybe Disney+ subscribers would get a deal. Etc.
And then maybe ViacomCBS (Paramount) buys Regal. Comcast (Universal) buys Cinemark. Sony buys Cineplex. Etc.
Sadly, it wasn't Cineplex that Sony nabbed. It was one of the theaters I actually enjoyed going to. I had higher hope for the chain:
And here’s where I should note that of course I hope that small, truly independent theaters will survive (or be re-born) in this new world I’m proposing. I just acknowledge that the larger chains have to exist as well for keep the industry intact, and I think the studios/tech players would be better stewards of those theaters. Though I’m all for Alamo Drafthouse and some of the great, more bespoke chains buying up the theaters as well!
But the reality is that things were just as grim – if not more so – for Drafthouse. Again, the entire industry just changed. And now this is likely the only way out of this for many of the chains – though the ones better known for stock pumping and dumping may be in more trouble...
Perhaps one of the tech players swoops in too at some point in an attempt to garner favor with Hollywood talent.2 But really, the entire movie theater industry needs to be re-thought and re-booted for the 21st century world of streaming, IMAX, and perhaps Vision Pro. (AI, I'm less worried about here.)
Anyway, maybe Sony truly will be a white knight here:
Alamo Drafthouse’s Michael Kustermann will remain CEO of the pioneering dine-in movie theater chain and head Sony Pictures Experiences, reporting to Ravi Ahuja, president and COO of Sony Pictures Entertainment. All 35 of the chain’s cinemas will operate under the Alamo Drafthouse brand. Alamo Drafthouse-owned Fantastic Fest, its popular genre film festival, is included in the acquisition and will also continue to be operated by Alamo Drafthouse. The company’s headquarters will remain in Austin, Texas. It has locations in 25 metro areas.
“We believe strongly in engaging entertainment fans outside the home in fun and distinctive ways,” Ahuja said in a statement. “Alamo Drafthouse’s differentiated movie-going experience, admired brand and devoted community fit well with this vision.”
One studio not buying up a theater chain anytime soon? The one that kickstarted the problems in the first place. They have far more problems now, sadly.
1 Starting around 1 hour 44 minutes in here feels pretty prescient...
2 Yes, they already have been in a smaller way, with Netflix buying the Egyptian in Los Angeles and the Paris in New York, while Amazon owns the ArcLight in Culver City.