Sony Pictures is getting into the movie theater business, as it has acquired Alamo Drafthouse and its 35 dine-in cinemas.
As part of the sale, Alamo Drafthouse will continue to operate all of its existing locations as well as the annual Fantastic Fest genre film festival in Austin. Michael Kustermann will remain CEO of the company and will report to Sony Pictures president/COO Ravi Ahuja.
The company will be managed within SPE under a newly established division, Sony Pictures Experiences. The Drafthouse will continue to operate its cinemas the same way it always has, which includes exhibiting non-Sony releases, an individual with knowledge told TheWrap.
Financial terms of the deal were not disclosed.
“We believe strongly in engaging entertainment fans outside the home in fun and distinctive ways as seen most recently with our ‘Wheel of Fortune LIVE!’ traveling tour, and the opening of Wonderverse in Chicago,” Ahuja said in a Wednesday statement. “Alamo Drafthouse’s differentiated movie-going experience, admired brand and devoted community fit well with this vision. Our Crunchyroll business also aligns well with their audience’s interests. 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.”
“We are excited to make history with Sony Pictures Entertainment and have found the right home and partner for Alamo Drafthouse Cinema,” Kustermann added. “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.”
The new ownership comes after a turbulent four years for Alamo Drafthouse after the economic upheaval inflicted on the movie theater industry by the COVID-19 pandemic in 2020. In March 2021, as theaters began to reopen after a year of being closed, Alamo announced that it was filing for bankruptcy and had been purchased by Altamont Capital Partners and Fortress Investment Group, from whom Sony has acquired the chain alongside its founder, Tim League.
A year later, Alamo sold its collectibles and art division Mondo to Funko, and this past week, the chain announced that all five of its franchised locations in Texas would close, though there are plans to reopen replacements operated directly by the chain.
Sony’s purchase of Alamo Drafthouse comes as a handful of theaters have been picked up by streaming studios in recent years. Amazon Studios, for example, now operates the Culver Theater adjacent to its offices in Culver City, taking over from the now defunct Arclight Cinemas. Netflix has also acquired a pair of historic theaters with the Paris Theater in New York and the Egyptian Theater in Hollywood, investing in both with significant renovations.
But Sony’s acquisition marks a significantly greater investment in a dine-in chain that has cultivated a devoted following of 4 million loyalty members with its curated selection of repertory screenings. However, according to exhibition sources, it also carries high overhead costs as a dine-in chain with limited auditorium capacity in many of its locations.
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Chairman and CEO of Sony Picture Group Tom Rothman characterized the acquisition as a sign of his studio’s dedication to the theatrical experience, saying, “Alamo Drafthouse has always held the craft of filmmaking and the theatrical experience in high esteem, which are fundamental shared values between our companies. I’m jazzed that our company is doing this.”
“We are beyond thrilled to join forces with Sony Pictures Entertainment to expand our company vision to be the best damn cinema that has ever, or will ever, exist now in ways we could only ever dream of,” League agreed. “They have a deep respect and understanding of cinema’s ability to both drive growth and create lasting cultural impact which aligns perfectly with everything Alamo Drafthouse stands for.”
Goldman Sachs & Co. LLC acted as exclusive financial advisor to Alamo Drafthouse in the transaction.
