Sony Pictures Acquires Alamo Drafthouse in Lifeline to Cinema Chain

Sony Pictures Entertainment is acquiring Alamo Drafthouse Cinema and will manage the theater chain’s 35 cinemas, marking the first time in more than half a century that a traditional Hollywood studio has gotten into the theater business.

The deal, announced Wednesday, was made possible by the Justice Department’s decision in 2020 to rescind the so-called Paramount consent decrees — movie distribution rules dating to 1949 that forced the largest Hollywood studios to sell off their theater holdings. Those rules were intended to prevent studios from controlling the film business, from creation to exhibition.

In 2019, the Justice Department’s then-antitrust chief, Makan Delrahim, said changes in the entertainment industry “made it unlikely that the remaining defendants can reinstate their cartel.” Sony’s move to test that regulatory shift could open the door to similar deals by other leading studios. In recent years, Netflix, the leading streaming company, has bought theaters to show films.

Alamo, the seventh largest theater chain in North America, operates theaters in 25 metro areas across the United States and has invested in distinctive programming and food offerings in an attempt to lure in moviegoers away from major multiplexes.

The terms of the deal were not disclosed. Sony bought Alamo from Altamont Capital Partners and Fortress Investment Group, as well as the chain’s founder, Tim League. Mr. League said the dine-in movie theater chain was “beyond thrilled” about the deal.

It comes at a time of financial trouble for Alamo and for the movie theater business as a whole. Several of Alamo’s franchised 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 in 2021 before a private equity firm stepped in.

The cinemas will still operate under the Alamo Drafthouse brand, Sony said, though they will be managed by a newly formed division at Sony led by Michael Kustermann, Alamo’s chief executive officer.

“Alamo Drafthouse has always held the craft of filmmaking and the theatrical experience in high esteem, which are fundamental shared values between our companies,” said Tom Rothman, the chief executive of Sony Pictures Motion Picture Group.

The industry has grappled with multiple headwinds in recent years, as the pandemic caused a slump in box office receipts — and, more recently, a dismal start to the summer blockbuster season — while Hollywood strikes chipped away at the number of movies that studios churned out.

Ticket sales in the United States and Canada for the year to date total just over $2.8 billion, a 26 percent decline from the same period last year, according to Comscore.

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