In a groundbreaking move, Sony Pictures has announced the acquisition of Alamo Drafthouse, the seventh-largest movie theater chain in North America. This acquisition marks the first time a studio has purchased a theater chain since the Department of Justice’s antitrust division lifted the decree that prohibited certain film distributors from owning exhibition companies in 2020.
Enacted in 1948, the Paramount Consent Decrees were a landmark antitrust decision that ordered major studios to divest their cinemas. This decision had a significant impact on the motion picture industry and remained in place for over 70 years. However, it is important to note that the decree only affected some studios. While Warner Bros., 20th Century Fox, and MGM were barred from reentering the theater business without court approval, others like Universal, Columbia, and United Artists, which did not own theaters at the time of the decree, were not banned from acquiring them in the future.
With the acquisition of Alamo Drafthouse, Sony Pictures is making a strategic move to expand its presence in the cinema industry. Alamo Drafthouse CEO Michael Kustermann will continue to lead the dine-in movie theater chain and will report to Ravi Ahuja, president and CEO of the newly formed Sony Pictures Experiences division. The company’s 35 cinemas will remain under Alamo Drafthouse’s operation, with headquarters staying in Austin, Texas.
“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,” said Ahuja in a statement. This acquisition comes after Alamo Drafthouse faced financial challenges, including filing for Chapter 11 bankruptcy protection in 2021 due to disruptions caused by the Covid-19 pandemic.
“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.” This partnership between Sony Pictures and Alamo Drafthouse signifies a new chapter in cinema history, bringing together two giants in the industry to create a memorable and immersive movie-going experience for audiences around the world.
With this acquisition, Sony Pictures is not only expanding its reach in the cinema industry but also reaffirming its dedication to preserving the art of theatrical viewing. As the landscape of movie distribution continues to evolve, partnerships like the one between Sony Pictures and Alamo Drafthouse will play a crucial role in shaping the future of cinema and ensuring that audiences continue to experience the magic of the big screen for years to come.