In a landmark moment that is sure to open the floodgates for a return to vertical integration for movie studios, Sony Pictures has purchased Alamo Drafthouse Cinema. From 1948 to 2020, the US Justice Department prohibited film distributors from owning an exhibition company which was known as the Paramount Consent Decrees. It arose from a 1948 Supreme Court decision that dismantled the vertical integration that movie studios had and forced them to divest their theater holdings.
Vertical integration meant that studios owned every stop on the production and exhibition of movies, which was a monopoly. The decrees forced studios to divest and sell their stakes in theater chains. Sony is the first major studio to step back into the waters since the decrees were rescinded in 2020.
Netflix has been the only studio so far to own theaters, but it was on a much smaller scale than this, they bought the Egyptian Theater in Hollywood, California and the Paris Theater in New York.
Alamo Drafthouse went through similar troubles to other theater chains in 2020 due to the COVID-19 pandemic. They filed for Chapter 11 bankruptcy in 2021. Alamo Drafthouse is an independent chain with 37 locations across the country. They pride themselves on being the best place to see a movie with no talking or texting allowed during their showings. They serve food and drinks straight to your chair. The company will continue to operate under CEO Michael Kustermann, but he’ll now report to Ravi Ahuja, President and COO of Sony Pictures Entertainment.
“We are excited to make history with Sony Pictures Entertainment and have found the right home and partner for 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.”
The Fantastic Fest movie festival is also included under this new deal with Sony Pictures. Alamo Drafthouse is the 7th largest theater chain in the US. They release more movies per year than any other chain and welcome more than 10 million guests per year.
The biggest question about this acquisition is whether or not Alamo Drafthouse will be able to keep its spirit of independence and rogue behavior, or will the crushing foot of a corporation strip away what makes it so special?
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