Sony Pictures Buys Alamo Drafthouse

What a week for the Alamo Drafthouse.

Wednesday, Sony Pictures announced its acquisition of the Texas-based movie theater chain known for rowdy screenings and dine-in amenities. Just last Thursday, every Drafthouse location in North Texas closed after the partner company that owns those franchises filed for Chapter 7 bankruptcy. A franchise location in Woodbury, Minnesota, owned by the same company, Two Is One, One is None, also shut down Thursday.

Here’s a quick rundown of what happened, why, and what could be in store for the future.

North Texas shutdown

Early Thursday June 6, the Cedars, Las Colinas and Lake Highlands theaters in Dallas, plus the Denton and Richardson Drafthouse locations and the Woodbury, Minnesota, theater abruptly closed after Two Is One announced a bankruptcy filing.

The more than 600 affected theater employees reportedly got the news from their employee portal, according to multiple tweets. Two Is One said they reached out to all affected workers before the announcement, according to a press release, but many workers refuted this.

Two Is One blamed the sudden bankruptcy on the post-pandemic state of the movie industry combined with the effects of the 2023 writers’ and actors’ strikes.

“Industry-wide guest counts have not rebounded even to pre-COVID levels…industry-wide economic performance was severely down in the fourth quarter of 2023 and the first quarter of 2024. In fact, the first quarter of 2024 has been the worst performing quarter in movie-going history.”

Alamo later posted on its website that it was “hard at work” trying to come up with a solution to get the theaters back in the metroplex.

Sony enters the picture

Apparently, that hard work meant a movie studio purchase.

Wednesday afternoon, Sony Pictures announced it bought Alamo Drafthouse Cinemas for an undisclosed amount from founder Tim League and owners Altamont Capital Partners and Fortress Investment Group. The theater chain looked for a buyer for a while but couldn’t find a bite, according to Variety.

The theater’s headquarters will remain in Austin, and Fantastic Fest, the yearly genre film festival, comes with the acquisition.

What this means for the shuttered North Texas locations is still up in the air. With no announcement so far about plans for reopening, Alamo Season Pass holders (full disclosure: I am one) should contact support to talk about pausing their subscriptions.

Alamo touted the Sony deal as historic, but it’s a business move almost as old as the film industry itself. So many film studios used to own their own theater chains back in the day that it led to the 1948 Paramount Decrees, which prevented studios from creating monopolies by owning their own movie houses.

As the laws loosened, Sony owned and operated the Lowes Theater Chain in the 1990s. The Paramount Decrees expired in 2020, opening the gates for studios and distributors to own their own theater chains. Since then, Netflix bought the Egyptian in Los Angeles and the Paris in New York. Amazon bought the ArcLight in Culver City. This Sony deal was the first time Sony Pictures has bought an entire theater chain since the regulations lifted.

Thursday was also not the first time Alamo Drafthouse has experienced bankruptcy. In March 2021, the theater chain announced it was filing for Chapter 11 bankruptcy after it closed some money-losing locations in the middle of the COVID-19 pandemic. It bounced back by May 2021, and started announcing plans for expansion in June.

What’s next?

Times are tough for the movie industry this year, but the Drafthosue went into 2024 faring better than most. The theater chain had a 30 percent jump in box office revenue from 2022 to 2023, which was better than the 21 percent increase seen by the rest of the industry, according to Variety. They got out ahead of this 2024’s smaller slate for films following the actors’ and writers’ strikes by hosting its “Time Capsule” series, showing repertory screenings of fan favorite films from years like 1989, 1994, 1999. and so on.

But this year’s box office is unmistakably bad, and the summer totals aren’t on track to reach the heights of last year’s Barbenheimer phenomenon. Theaters expecting anything to be the same as it was pre-pandemic are deluding themselves. No increase in concession or ticket prices solves the problem that American audiences learned during the pandemic to just wait until a movie hits streaming.

Fall Guy, one of the biggest “flops” of the year so far, dumped to VOD after two weeks in theaters. Similarly, Furiosa was pulled from a majority of its theaters after just two weeks. The shrinking of the theatrical window during COVID fundamentally altered the movie landscape.

There is no way for theaters to bounce back at all unless studios and distributors find a way to keep movies in theaters longer, make cheaper movies, and offer audiences something they can’t get at home, whether that’s a better screen, a better sound system. or an out-of print movie.

Historically, Sony has made a big play for live experiences like Wonderverse Chicago, an interactive installation featuring Ghostbusters and Jumanji virtual reality experiences, Zombieland-themed bumper cars and Bad Boys racing simulators. That type of experience lines up with Alamo’s themed movie parties and rowdy screenings. Maybe there’s a way to combine both of those sensibilities to make the Alamo Drafthouse into something different than it was, instead of just another asset on a corporation’s budget sheet.

I hope so. Movie theaters are dying all across America, and especially in Texas — last week’s Drafthouse franchise bankruptcy news came mere hours after Angelika’s Plano location, about 22 miles northeast of Dallas, announced it was closing after 20 years of business.

The act of sitting silently next to other people and watching shadows being projected onto a wall is a human act that’s as old as cave paintings. There’s something magical about it. And now, at least for the Alamo Drafthouse, the burden of keeping that magic alive falls to Sony Pictures.