Interior of the Alamo Drafthouse movie theater.
Alamo Drafthouse
Sony pictures It 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 purchased a theater chain since the Justice Department's antitrust division ended a decree prohibiting certain film distributors from owning exhibition companies in 2020.
Maximum approval decrees were issued in 1948, ordering major studios to divest their movie theaters. It was a landmark antitrust decision for the motion picture industry, and has stood for more than 70 years.
But the decree only affected some studios. While Warner Bros. was banned While 20th Century Fox and MGM were unable to return to the theater business without court approval, other companies such as Universal, Columbia, and United Artists that did not own theaters at the time of the decree were not prohibited from acquiring them in the future. .
That's why Columbia Pictures, now under the Sony banner, was able to acquire a minority stake in the Walter Reed organization, which owned less than a dozen theaters, in the late 1980s and later acquired the Loews Theater. This is also why Disney was allowed to own the El Capitan Theater and Netflix was able to buy the Egyptian Theater and the Paris Theater in New York.
Alamo Drafthouse CEO Michael Kosterman will remain at the helm of the movie theater chain, reporting to Ravi Ahuja, president and CEO of the newly formed Sony Pictures Experiences division. Alamo Drafthouse will continue to operate the company's 35 movie theaters and will remain headquartered 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 from its owners Altamont Capital Partners, Fortress Investment Group and founder Tim League.
The acquisition comes after Alamo Drafthouse filed for Chapter 11 bankruptcy protection in 2021 due to Covid-19 pandemic disruptions. It was bailed out by a private equity firm. However, just last week, five North Texas locations closed after the franchisee filed for bankruptcy.
“We are excited to make history with Sony Pictures Entertainment and have found the right home and partner for Alamo Drafthouse Cinema,” Kosterman said. “We were built by movie fans for movie fans. We know how important this is to Sony, and it's further proof of their commitment to the theatrical experience. Together, we will continue to innovate and provide exciting new opportunities for our teammates and moviegoers alike.”
Correction: This story has been updated to accurately reflect the terms of the cap approval decrees and when the studio's theater takeovers occurred.
