Until 2020 and the rescinding of the so-called Paramount Consent Decrees, studios could not own exhibition companies except under certain stringent conditions. With Sony taking over the Alamo Drafthouse Cinema, we see the first deal in 7 decades to put a major Hollywood studio in movie theater ownership. Blake & Wang P.A. entertainment attorney Los Angeles, Brandon Blake, dives into the news and the history behind it.
The Paramount Consent Decrees
First enacted in 1948, the US Department of Justice banned film distributors from owning exhibition companies after a US Supreme Court ruling on the matter. These decrees were, in part, responsible for the dismantling of the older Hollywood studio model.
It was intended to remove some of the studio stranglehold over all aspects of the filmmaking cycle, from production and talent right through to release. However, it was a model designed for an entertainment landscape that no longer exists. In particular, it was designed with single-screen cinemas in mind, not the modern multiplex, where movie screening ‘favoritism’ and long runs are much less likely.
A Groundbreaking Deal for Historic Hollywood
While the Paramount Consent Decrees were relaxed in the 1980s and fully revoked in 2020, Sony’s purchase of the Alamo Drafthouse makes the company the first major Hollywood studio to enter such a deal. Since 2000, only Netflix and Amazon, neither traditional studios, have acquired theaters. In a fun twist, however, AMC Theaters, the world’s largest cinema chain operator, entered the distribution business last year with Taylor Swift’s Eras Tour.
The Alamo itself, an independent cinema chain with 35 locations, went into Chapter 11 bankruptcy in 2021, as a direct result of pandemic disruptions. According to an announcement from Sony early last week, the Alamo CEO, Michael Kustermann, will remain in charge of the chain, as part of a new Sony division he will helm, and the chain will still operate under the Alamo Drafthouse brand.
Film and Television 