Alamo Drafthouse has been acquired by Sony Pictures in deal that shakes up the industry
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Sony Pictures Entertainment has acquired Alamo Drafthouse Cinema, the Austin-based theater chain known for its experiential-driven food and movie service, the companies announced Wednesday.
Sony Pictures said in a news release that Alamo Drafthouse will be managed within Sony by a newly established division, Sony Pictures Experiences. The deal reinforces Sony’s long-held commitment to theatrical exhibition and gives the company new territory within the theater industry.
After the acquisition was announced, Sony made clear that Alamo Drafthouse CEO Michael Kustermann will remain in place leading the Lone Star dine-in movie theater chain. Kustermann will also head Sony Pictures Experiences.
The acquisition should not affect the theaters too much since Sony said that Alamo Drafthouse will continue to operate all 35 of its cinemas under the Alamo Drafthouse brand. Alamo Drafthouse-owned Fantastic Fest, the world-renowned genre film festival, is included in the acquisition and will also continue to be operated by Alamo Drafthouse. The company’s headquarters will remain in Austin.
“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 Ravi Ahuja, Sony Pictures Entertainment's president and chief operating officer. “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 expansion of an iconic Texas theater brand
Alamo Drafthouse was founded in 1997 by Tim and Karrie League as a single-screen, mom-and-pop repertory theater in Austin and has grown into a unique and iconic dine-in cinema chain with a strong following.
Since opening Alamo Drafthouse, it has grown into North America’s seventh-largest theater chain, releasing more movies per year than any other theater chain, welcoming over 10 million guests annually and building an impressive audience of 4 million loyalty members. Last year, the theater chain saw a 30% 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.”
Earlier this year, uncertainty surrounded Alamo Drafthouse as a franchisee announced the closure of five theaters in the Dallas-Fort Worth area — one of Texas’ biggest markets. However, this deal is seen as a faith bet from Sony Pictures that the company’s strong brand can sustain and scale.
“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 Entertainment Motion Picture Group.
As for the financial details of the deal, 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.
“We are excited to make history with Sony Pictures Entertainment and have found the right home and partner for Alamo Drafthouse Cinema,” said Kustermann, Alamo Drafthouse's CEO. “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.”
Beck Andrew Salgado covers trending topics in the Austin business ecosystem for the American-Statesman. To share additional tips or insights with Salgado, email Bsalgado@gannett.com.
This article originally appeared on Austin American-Statesman: Sony Pictures acquires Alamo Drafthouse in an industry-changing deal
