Alamo Drafthouse, the cinema chain known for its strict no-talking rule and fan-focused special events, is thinking about selling the business, based on information from two credible sources.
The company has contacted several Hollywood studios to see if they are interested in buying Alamo, but it's not clear if there are any potential buyers. Alamo has been looking for potential buyers for a while due to the high costs of their business model, as per an anonymous source from a studio who spoke with TheWrap.
“Their top locations do really good business, but it’s a very expensive operation that they are running,” the source said. “They operate in places like Brooklyn and San Francisco where they have to deal with liquor license and health inspection costs along with the rent that theaters usually have to deal with, and the auditoriums have to stay small because they can’t serve all that food to a 500-seat theater. It’s a very hard business that they’re in.”
Representatives for Alamo Drafthouse declined to comment.
Keeping up with those high costs is harder with box-office revenue still behind pre-pandemic levels. Last year’s $8.9 billion overall domestic total stands 21% behind the $11.3 billion grossed in 2019. With the first quarter of 2024 nearly complete, domestic grosses for the year stand at $1.44 billion, down approximately 10% from 2023 and down 40% from Q1 2019.
After being closed for a year because of the COVID-19 pandemic, Alamo Drafthouse declared bankruptcy in March 2021 and was sold three months later to Altamont Capital Partners, with funds managed by affiliates of Fortress Investment Group LLC and Alamo Drafthouse founder Tim League. While some underperforming locations were closed as part of the sale, Alamo Drafthouse currently runs a mix of 40 company-owned and franchised locations nationwide.
The potential sale was first reported by Deadline.
