Sony Pictures Entertainment (SPE) has just bought Alamo Drafthouse Cinema. Deadline first told you the chain was up for sale and being shopped around to studios. The move puts Sony, which still has its eye on acquiring Paramount Global, in the exhibition business once again after owning the Loews Theater chain back in the 1990s (you might remember the jingle sizzle reel before each movie “Thank you for coming to Sony”). Those Loews locations are now owned by AMC Entertainment.
SPE acquired Alamo Drafthouse from owners Altamont Capital Partners, Fortress Investment Group and founder Tim League for finance sources tell us is a price tag of $200 million. The new Alamo Drafthouse Cinema will be managed within SPE under a new division, Sony Pictures Experiences. Alamo Drafthouse’s Michael Kustermann will remain CEO of the cineaste dine-in movie chain and head Sony Pictures Experiences, reporting to Ravi Ahuja, President and COO of SPE.
Thirty-five cinemas will continue to operate across 25 metro areas under the Alamo Drafthouse brand. The deal also includes the Alamo Drafthouse-owned genre Fantastic Fest, which will continue to be operated by the circuit. Alamo Drafthouse’s HQ will remain in Austin, Texas.
This is a great marketing move for Sony and their product: When Alamo embraces a movie and gives it some love, it has a positive halo effect among the under 25, hip crowd.
“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,” said Ahuja. “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.”
Alamo Drafthouse was founded in 1997 by Tim and Karrie League as a single-screen mom and pop repertory theater in Austin, TX. Not only is it known as a destination for cinema and cult movie lovers, but most locations boast a swanky bar, a bistro menu offering including grasshopper milkshakes and burgers, as well as a merch store, DVD rentals and vintage arcade machines. Alamo Drafthouse is North America’s 7th largest theater chain and is known to release more movies per year than any other theater chain, counting north of 10 million guests annually, and a loyalty member base of 4 million. Last year, the theater chain saw a 30 percent jump in box office revenue from the previous year, which came in ahead of the industry at large.
“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,” said Tim League. “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.”
“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,” said Tom Rothman, Chairman and CEO of Sony Pictures Motion Picture Group.
“We are excited to make history with Sony Pictures Entertainment and have found the right home and partner for Alamo Drafthouse Cinema,” said Kustermann. “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.”
Goldman Sachs & Co. LLC acted as exclusive financial advisor to Alamo Drafthouse in the transaction.
Variety recently reported that six Alamo Drafthouse franchised locations recently shuttered after their owner filed for bankruptcy. Those venues closed included five Texas locations in the Dallas-Fort Worth area, a Minnesota venue in Woodbury. Those venues are operated by Two is One, One is None, LLC, which filed for Chapter 7, terminated staff with the owners claiming they lost “over $1 million” in 2023.
Yesterday, news broke that Skydance and Paramount Global broke off merger talks. While the studio’s controlling shareholder Shari Redstone is entertaining rival offers, Sony’s bid per sources seems a distant option for the Melrose lot given regulatory hurdles of a Japanese company having interests in a U.S. broadcast company; not to mention the current POTUS Joe Biden anti-merger sensibility.