Throughout the coronavirus pandemic, few industries have been hit harder than movie exhibition. The movie theaters were closed for months, and then reopened with limited capacities. In some jurisdictions, they were restricted when it came to selling food, which is the main revenue driver of most theaters.
There had been speculation that AMC might end up in bankruptcy, but the company got an unexpected windfall from the Reddit/GameStop rally, and remains solvent, just in time for theaters to reopen in New York City for the first time in a year.
Instead, it was another chain that declared bankruptcy — Alamo Drafthouse, the beloved, Austin-based cinema beloved by cineaste types, announced this week that it had filed for Chapter 11, and also that it had agreed to sell most of its assets to investors Altamont Capital Partners and Fortress Investment Group.
The chain will remain in business, but it will close some underperforming locations. That includes the Alamo Ritz, the theater on East 6th Street in Austin, and the chain’s flagship. That theater was a centerpiece of each spring’s South by Southwest Film Festival, at least prior to the pandemic.
Also closing are the locations in Kansas City and in New Braunfels, near San Antonio.
The Alamo chain is known for its cinematic sensibility, its valuing of first-rate exhibition standards, and its zero-tolerance policy towards phone usage in the theater. While focused on Texas and nearby places for much of its history, Alamo had expanded to other markets in recent years, opening for the first time in New York and Los Angeles.
“Alamo Drafthouse had one of its most successful years in the company’s history in 2019 with the launch of its first Los Angeles theater and box office revenue that outperformed the rest of the industry,” company CEO Shelli Taylor said in a statement.
“We’re excited to work with our partners at Altamont Capital Partners and Fortress Investment Group to continue on that path of growth on the other side of the pandemic, and we want to ensure the public that we expect no disruption to our business and no impact on franchise operations, employees and customers in our locations that are currently operating.”