Saturday, July 20, 2024

Lifeline to Cinema Chain Sony Pictures to Acquire Alamo Drafthouse

Sony Pictures Entertainment will acquire Alamo Drafthouse Cinemas and manage its 35 locations, a rare example of a traditional Hollywood studio owning a theater chain.

The deal, announced Wednesday, follows a Justice Department decision in 2020 that repealed Paramount’s so-called consent decrees — film distribution rules dating back to 1949 that forced the biggest Hollywood studios to sell their theater holdings. Those rules were intended to prevent studios from controlling the movie business, from creation to exhibition.

In 2019, Mahan Delrahim, the antitrust chief of the Justice Department at the time, said changes in the entertainment industry made it “impossible for the remaining defendants to reestablish their cartel.” Sony’s move could open the door to similar deals from other leading studios. In recent years, leading streaming company Netflix has bought theaters to show movies.

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

Terms of the deal were not disclosed. Sony bought the Alamo from Altamont Capital Partners and Fortress Investment Group and the chain’s founder, Tim Leek. Mr. Leake said the dine-in movie theater chain is “beyond thrilled” about the deal.

It comes at a time of financial crisis for the Alamo and the theater business as a whole. Several Alamo franchises filed for bankruptcy and closed this month, a move by Sony that became a potential lifeline for the struggling chain. Alamo filed for Chapter 11 bankruptcy protection in 2021 before a private equity firm stepped in.

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The theaters will still operate under the Alamo Drafthouse brand, a Sony company that will be managed by a newly created division at Sony led by Michael Kusterman, Alamo’s chief executive, Sony said.

“Alamo Drafthouse has always held the craft of filmmaking and the theatrical experience as core values ​​shared between our companies,” said Tom Rothman, chief executive of Sony Pictures Motion Picture Group.

The industry has faced a number of headwinds in recent years as the pandemic has caused a slump in box office receipts — and, more recently, a poor start to the summer blockbuster season — as Hollywood strikes cut the number of movies studios churn out. .

According to ComScore, ticket sales in the United States and Canada this year totaled more than $2.8 billion, a 26 percent decline from the same period last year.

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