Inside the Alamo Drafthouse Cinema theater.
Alamo Drafthouse
Sony Pictures The company announced Wednesday that it has acquired Alamo Drafthouse, North America’s seventh-largest movie theater chain.
This marks the first time a movie studio has acquired a theater chain since the Justice Department’s Antitrust Division in 2020 repealed laws banning certain film distributors from owning exhibition companies.
The Paramount Consent Decree, enacted in 1948, forced major movie studios to sell off their cinemas. It was a landmark antitrust decision for the film industry and remained in effect for over 70 years.
However, the order only affected a handful of studios: Warner Bros., 20th Century Fox, and MGM were barred from re-entering the movie theater business without the court’s permission, but other companies that did not own theaters at the time of the order, such as Universal, Columbia, and United Artists, were not barred from acquiring theaters in the future.
It’s why Columbia Pictures, now owned by Sony, was able to buy a minority stake in the Walter Reade Organization, which owned fewer than a dozen movie theaters, in the late 1980s and later acquired Loews Theatres, it’s why Disney was allowed to own the El Capitan Theatre, and it’s why Netflix was able to buy the Egyptian Theatre and New York’s Paris Theatre.
Alamo Drafthouse CEO Michael Kusterman will continue to lead the dine-in cinema chain, reporting 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 the headquarters will remain in Austin, Texas.
“We look forward to building on the innovation that has made Alamo Drafthouse so successful, and of course we will continue to welcome content from all studios and distributors,” Ahuja said in a statement.
The film company was acquired from 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 amid disruptions caused by the coronavirus pandemic. The company was rescued by a private equity firm, but five North Texas locations closed last week after the franchisee filed for bankruptcy.
“We’re excited to make history with Sony Pictures Entertainment and find the perfect home and partner for Alamo Drafthouse Cinema,” said Kusterman. “We were founded by movie lovers, for movie lovers, and we know how important this is to Sony, and this is further evidence of the company’s commitment to the moviegoing experience. Together, we will continue to innovate and deliver exciting new opportunities for our teammates and movie fans alike.”
Correction: This story has been updated to accurately reflect the terms of the Paramount consent decree and when the studio’s acquisition of the theaters took place.
