Cory Woodroof
June 12, 2024 6:35 pm ET
On Wednesday, the biggest domino post-Paramount Consent Decrees fell as Sony Pictures acquired the Alamo Drafthouse movie theater chain, per multiple reports.
After the 1948 Supreme Court ruling that barred certain entertainment studios from owning major stakes in theater exhibition companies went away in 2020, it opened the path for studios to basically own their own theater chains.
While pre-Sony Columbia Pictures wasn’t specifically included in that 1948 ruling and purchased interests in Walter Reade circuit in New York and Lowes Theater in the 1980s, this does mark for a historic moment for the company.
While Netflix and Amazon both own individual theaters in New York and Los Angeles, Sony taking on the popular Alamo Drafthouse theater chain represents a seismic shift in the industry.
The Hollywood Reporter noted that Alamo CEO Michael Kustermann will continue to run the operation with 35 locations.
“We are excited to make history with Sony Pictures Entertainment and have found the right home and partner for Alamo Drafthouse Cinema,” Kustermann said in a statement. “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.”
As we enter a new era for movie studios and theatrical exhibitioners, let’s answer a few questions on what this means for Alamo and other chains like AMC, Regal and Cinemark.
RICARDO B. BRAZZIELL/AMERICAN-STATESMAN via Imagn Content Services, LLC
What will happen to the Alamo Drafthouse near me?
If you’ve got a beloved Alamo down the corner from you where you see all of the year’s biggest blockbusters, fear not. Your favorite Alamo Drafthouse shouldn’t be going anywhere (unless it’s in the Dallas area, as five Alamo locations closed recently… which could change with Sony’s involvement).
Tom Rothman, the head of Sony Pictures, confirmed in a statement his company’s excitement for acquiring the theater chain.
“Alamo Drafthouse has always held the craft of filmmaking and the theatrical experience in high esteem, which are fundamental shared values between our companies,” Rothman shared, via THR. “I’m jazzed that our company is doing this.”
As of now, it should be business as usual with the summer movie season in full swing. Sony doesn’t make this move if it wants to sell off the theaters for real estate deals; there’s clearly a plan in place for the company to benefit from the acquisition for its films and overall entertainment strategy.
That’s why you shouldn’t be surprised if Sony releases take a more prominent presence in the theater lobbies from an advertising standpoint, as Sony is undoubtedly going to leverage its newly acquired theater chain to benefit its own releases and with any repertory Sony screenings.
Basically, it’s going to be roughly the same experience until something changes, and we doubt those changes will be drastic.
Omar Ornelas/ El Paso Times via Imagn Content Services, LLC
What does this mean for Alamo long-term?
It’s hard to say. Sony will absolutely use part of this acquisition to pump up its own library and future releases. Those will likely get priority when it comes to special events and promotions, but you’ll still probably be able to watch movies from other studios at an Alamo Drafthouse for the years to come.
Sony simply doesn’t produce enough movies during the year to make owning a theater chain like this fiscally beneficial for the company if they ignore films from competitors. However, how those companies negotiate what percentage of the ticket sales go to which side will be absolutely fascinating to watch in the months and years to come.
Our best guess is Alamo Drafthouse locations will run largely as they have while Sony owns them, just with added incentive to prop up its own films to theatergoers. In theory, Sony would get all the ticket sales that come from showing one of its own movies, which gives them lots of fiscal incentive for moviegoers to see Sony films at an Alamo Drafthouse as opposed to another theater.
It’s always possible Sony could sell Alamo down the road or decide to open and/or close locations as it sees fit. The main takeaway is that Sony owns the chain now and, as all businesses obviously do, intends to make lots of money on this merger.
Dennis P. Carmody / USA TODAY NETWORK
What does this mean for other theater chains?
It could mean nothing or everything.
Sony breaking the ice by purchasing the Alamo Drafthouse could very well pave the way for other studios to eye acquisitions of struggling exhibition companies like AMC, Cineworld (which owns Regal Cinemas) and Cinemark.
While theatrical exhibition is not dying (despite how a post-strike 2024 summer at the movies is negatively impacting the box office), the industry is changing. Part of that change may well come with a major company like Apple, Amazon, Comcast, Netflix or Disney wanting to get into the exhibition game now that they legally can and no longer have to be first.
Our best guess is a company like AMC, saddled with billions in debt, gets enticed by a giant like Apple or Amazon, like Alamo did with Sony, sometime in the next half decade to make a merger.
The box office will most likely rebound in 2025 and 2026 with bigger-ticket items hitting theaters. The Disney, Marvel, Star Wars, Jurassic Park, DC, Avatar, Nintendo and Pixar brands will all bring in high-interest sequels and spinoffs in the next two years. However, AMC might feel it’s ultimately in better hands with a larger company pulling the strings and paying the bills.
One thing Sony doesn’t have that other studios do is a streaming branch in its portfolio, which complicated any acquisition of a chain exhibitioner. However, it will just take the right company and the right deal for a major chain to get voluntarily swallowed up by a bigger fish.
How this all goes in the future will be crucial to how movies go to theaters and who makes the money. We have a really good feeling theaters will still be here for decades to come, but Sony’s shot across the bow will reverberate for studios wanting a cut in the theaters that show their movies.
