Sony Pictures Entertainment has acquired Alamo Drafthouse Cinema and will operate its 35 locations, a rare example of a traditional Hollywood studio owning a theater chain.
The deal, announced Wednesday, follows the Justice Department’s decision in 2020 to rescind the so-called Paramount consent decrees — film distribution rules dating back to 1949 that forced Hollywood’s largest studios to sell their theatrical properties. The goal of these rules was to prevent studios from controlling the film industry, from creation to exhibition.
In 2019, the Justice Department’s antitrust chief at the time, Makan Delrahim, said changes in the entertainment industry “made it unlikely that the remaining defendants would be able to reinstate their cartel.” Sony’s move could open the door to similar deals by other leading studios. In recent years, Netflix, the leading streaming company, has purchased theaters to show movies.
Alamo, the seventh-largest movie theater chain in North America, operates theaters in 25 metro areas across the United States and has invested in premium programming and food offerings in an effort to lure moviegoers away from major multiplexes.
Terms of the deal were not disclosed. Sony purchased the Alamo from Altamont Capital Partners and Fortress Investment Group, as well as series founder Tim League. Mr Legg said the dining cinema chain was “very pleased” with the deal.
This comes at a time when the Alamo and the movie business as a whole are experiencing financial problems. Several Alamo franchise locations filed for bankruptcy and closed this month, making Sony’s move a potential lifeline for the struggling chain. Alamo filed for Chapter 11 bankruptcy protection in 2021 before a private equity firm intervened.
Sony said the movie theaters will still operate under the Alamo Drafthouse brand, though they will be managed by a newly formed division of Sony led by Alamo CEO Michael Kosterman.
“Alamo Drafthouse has always held a high regard for the craft of filmmaking and theatrical expertise, core shared values between our companies,” said Tom Rothman, CEO of Sony Pictures Motion Picture Group.
The industry has faced multiple headwinds in recent years, as the pandemic caused a decline in box office receipts — and, more recently, a dismal start to the summer blockbuster season — while Hollywood strikes reduced the number of films produced by studios. .
Total ticket sales in the U.S. and Canada for the year so far are just over $2.8 billion, a 26 percent decline from the same period last year, according to Comscore.
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