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Sony Pictures Entertainment acquired Alamo Drafthouse Cinemas this week — bringing vertical integration back to Hollywood, after the Department of Justice struck down a decades-old ban on studios controlling film exhibition.
“We are excited to make history with Sony Pictures Entertainment and have found the right home and partner for Alamo Drafthouse Cinema,” the theater chain’s CEO Michael 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.”
This follows the theater chain’s months-long effort to find a buyer, as cinemas struggle to attract audiences in a post-lockdowns landscape. Under the new ownership arrangement, Alamo Drafthouse theaters will be under a newly established division, Sony Pictures Experiences.
This will not be the first time that a major Hollywood studio has owned cinemas – it is, however, one of the first instances in several decades, following smaller ventures such as the launch of Amazon’s Culver Theater in Culver City, California, and Netflix’s deals to buy Hollywood’s Egyptian Theater and the Palisades’ Bay Theater.
For decades, the DOJ enforced a standard known as the Paramount Decree which blocked film production companies from also controlling the exhibition of movies. This regulation was derived from the 1948 Supreme Court case United States v. Paramount Pictures, Inc, in which the DOJ sued eight major film studios for antitrust violations.
The decision is often regarded as the beginning of the end of the traditional Hollywood studio system – giving rise to both independent theaters and film studios. The Paramount Decrees were allowed to sunset in 2020, on the grounds that it was “unlikely that the remaining defendants can reinstate their cartel.”
Prior to the 2020 decision, however, regulations had been loosening for decades. Sony Pictures even owned and operated the now-defunct Lowes Theatre chain in the 1990s. The film production company has placed increasing emphasis on live programming and theatrical experiences, even as Hollywood has invested heavily in streaming.
“We believe strongly in engaging entertainment fans outside the home in fun and distinctive ways,” Sony Pictures President Ravi Ahuja said in a press release.
“Alamo Drafthouse’s differentiated movie-going experience, admired brand and devoted community fit well with this vision,” said Ahuja. Alamo will still “welcome content from all studios and distributors,” the executive added.