As has been widely reported, the cinema chain Alamo Drafthouse is searching for someone to buy it. The story was first reported by Deadline. Alamo Drafthouse operates 41 locations across 13 states in the US. So far, Alamo executives have not commented on the news.
The business has reportedly reached out to several Hollywood studios to assess their interest in buying the company, though whether there are any potential bidders is unclear. Alamo has been searching for potential buyers for some time due to the high costs of their business model.
There has also been no word on an asking price, however Alamo Drafthouse cleared $134 million at the 2023 box office, which was a 25 percent increase over 2022.
The top locations for Alamo Drafthouse last year were Brooklyn, downtown Los Angeles, Alamo Springfield 14 in Missouri, Alamo Manhattan, Alamo Raleigh, North Carolina, and Alamo South Lamar in Austin, Texas. Last July, Michael Kustermann was named President of Alamo Drafthouse, replacing Shelli Taylor, who retired at the time.
After being closed for a year by the COVID-19 pandemic, Alamo Drafthouse filed for 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.
Most of the top-grossing locations are owned by Alamo Drafthouse, but the circuit deal differs in that roughly 17 sites are franchise-owned. Alamo Drafthouse has challenges that other cinema chains don’t have to face. In addition to the concessions people and ticket-taker on staff, it also has waiters and bartenders.
Keeping up with those high costs is harder with box-office revenue still behind pre-pandemic levels.
“Their top locations do really good business, but it’s a very expensive operation that they are running,” one person 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.”