For the first time in more than 75 years, a major Hollywood studio will own a movie theater chain.
Sony Pictures has acquired Alamo Drafthouse, the seventh-largest movie theater chain in North America, the company announced Wednesday. The cinema company was purchased from owners Altamont Capital Partners, Fortress Investment Group and founder Tim League.
From 1948 until 2020, film distributors were prohibited from owning an exhibition company under what was known as the Paramount Consent Decrees. While studios were permitted to own individual theater locations — Disney owns the El Capitan Theatre and Netflix owns The Egyptian Theatre and New York’s Paris Theater, for example — the Department of Justice disallowed ownership of a chain of cinemas.
The decrees were abolished in 2020. Now, some four years later, Sony is the first to invest in a theatrical company.
Alamo Drafthouse CEO Michael Kustermann will remain at the helm of the dine-in movie theater chain and will report to Ravi Ahuja, president and CEO of the newly formed Sony Pictures Experiences division.
The company’s 35 cinemas will continue to be operated by Alamo Drafthouse and its headquarters will remain in Austin, Texas.
“We look forward to building upon 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 acquisition comes after Alamo Drafthouse filed for Chapter 11 bankruptcy protection in 2021 due to Covid disruptions. 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 excited to make history with Sony Pictures Entertainment and 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 serves as further evidence of their commitment to the theatrical experience. Together we will continue to innovate and bring exciting new opportunities for our teammates and moviegoers alike.”