Sony Pictures Entertainment Acquires Alamo Drafthouse Cinema

Photo by Bryce Bernier

The only major studio not to have invested in its own proprietary streaming service has now become the first major studio to acquire an exhibition circuit since the repeal of the Paramount Decrees—enacted in 1948 to forestall a handful of studios (not including Sony, which didn’t exist in its present form at the time) from gaining an unfair business advantage by also owning theaters. Following a motion from the Department of Justice, the Paramount decrees were phased out over a two-year period starting in mid-2020, leading to rampant speculation in the years since that a major studio may acquire a cinema chain.

That has now happened, with Sony Pictures Entertainment today announcing the acquisition of dine-in cinema chain Alamo Drafthouse, which has grown since its 1997 founding from a mom-and-pop repertory theater to a well-established brand with a loyal following and 35 cinemas across nine states. This comes after Sony ultimately stepped down from their bid to acquire rival studio Paramount earlier this year.

The chain, the twelfth largest in North America per our 2023 ranking, will exist under the umbrella of Sony Pictures Experiences. That division of the company also runs Wonderland, a Chicago-based entertainment destination that promotes Sony properties through immersive technology and experiences; the concept dovetails well with Alamo, which is known for giving each of its theaters a unique, film-related design that encourages customer engagement. Sony’s investment into the theatrical, immersive side of the cinema experience continues with their acquisition of Fantastic Fest, a popular genre film festival that will continue to be run by Alamo Drafthouse.

Alamo Drafthouse will continue to operate all 35 of its cinemas across 25 metro areas under the Alamo Drafthouse brand. Those metro areas do not include the Dallas Fort Worth metro area, as the five Alamo cinemas formerly based in the city were recently shuttered earlier this month by their franchise owners; a statement from Alamo indicated their intent to return to Dallas in short order.

“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–”a traveling staged experience based off the game show “Wheel of Fortune”—”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.” 

The last few years have been eventful for Alamo, as they have been for the industry at large. The chain brought in a new CEO, Shelli Taylor, in April 2020, filed for Chapter 11 bankruptcy in March 2021, emerged from bankrtupcy in June 2021, and elevated Kustermann, previously the president at Drafthouse, to the role of CEO in July of 2023. Kustermann will remain on as Alamo’s CEO and will lead Sony Pictures Experiences, reporting to Ravi Ahuja, President and COO of SPE.

Per a statement provided by Sony, the last year has been a good one for the chain, which saw a 30 percent jump in box office, over-indexing when compared to 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, with Karrie League the original founder of the chain. “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 Michael Kustermann, CEO of Alamo Drafthouse Cinema. “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.”

SPE acquired Alamo Drafthouse from owners Altamont Capital Partners, Fortress Investment Group and founder Tim League. Goldman Sachs & Co. LLC acted as exclusive financial advisor to Alamo Drafthouse in the transaction.

Photo by Bryce Bernier
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