Sony Group Corp's (NYSE:SONY) Sony Pictures Entertainment (SPE) has acquired Alamo Drafthouse Cinema, a prominent dine-in movie theater chain, marking a significant expansion into the theatrical exhibition sector.
SPE acquired Alamo Drafthouse from owners Altamont Capital Partners, Fortress Investment Group and founder Tim League. The financial terms were not disclosed.
This acquisition is set to be managed under the newly formed division, Sony Pictures Experiences, emphasizing SPE's commitment to experiential and theatrical entertainment.
The integration of Alamo Drafthouse will include all 35 of its locations across 25 metropolitan areas. The deal includes the continuation of the renowned Fantastic Fest, a genre film festival operated by Alamo Drafthouse.
Michael Kustermann, the current CEO of Alamo Drafthouse, will lead Sony Pictures Experiences. He will report directly to Ravi Ahuja, President and COO of SPE.
The integration of Alamo Drafthouse into Sony's operations comes at a time when major U.S. cities like New York, Los Angeles, Austin, and Boston are witnessing a downturn in summer box-office sales. The move is seen as a strategy to revitalize audience interest in theatrical experiences, according to a report from the Wall Street Journal.
The chain enhances the movie-watching experience by offering creative food and drink options, such as the movie-themed "Transylvania Mule" and a bacon-wrapped hot dog inspired by "Indiana Jones."
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"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 Chairman and CEO of Sony Pictures Motion Picture Group, Tom Rothman.
The deal also highlights Sony's commitment to creating immersive experiences that extend beyond traditional movie viewing. This includes leveraging concession sales, which constitute more than half of Alamo's revenue, to build a stronger connection with the audience.
Founded in 1997 by Tim and Karrie League, Alamo Drafthouse has grown from a single-screen theater to North America's 7th largest theater chain, known for its enthusiastic moviegoer community and significant box office growth.
Sony assures that Alamo will operate independently, maintaining its unique identity and ensuring that films from Sony's studios do not receive preferential treatment, per the report.
Sony stock lost more than 15% in the last 12 months. Investors can gain exposure to the stock via Avantis International Large Cap Value ETF (NYSE:AVIV) and Trust For Professional Managers ActivePassive International Equity ETF (NYSE:APIE).
Price Action: SONY shares are trading higher by 0.45% at $84.34 at the last check Thursday.
Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
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