Sony Pictures Entertainment buys cinema chain Alamo Drafthouse Cinema

(Reuters) -Sony Pictures Entertainment (SPE) has acquired U.S. cinema chain Alamo Drafthouse Cinema, the companies said on Wednesday, a move that will give the studio control over movie distribution.

The movie theater chain will be managed under SPE's newly established division Sony Pictures Experiences, which will be headed by Alamo Drafthouse's Michael Kustermann. He will remain the chief executive of the firm.

The companies did not disclose the financial terms of the deal.

SPE has become the first major studio to acquire a cinema chain since the repeal of the "Paramount" consent decrees that were enacted to protect movie theaters from powerful studios.

These decrees, established in the 1940s and early 1950s, were antitrust regulations designed to prevent movie studios from monopolizing film production, distribution and exhibition.

In 2020, a federal judge granted the U.S. government's request to terminate the consent decrees.

Alamo, which was founded in 1997, will continue to operate all 35 of its cinemas across 25 metro areas under the Alamo Drafthouse brand, the companies said in a statement.

The chain brings over 10 million guests annually, and has a core audience of 4 million loyalty members, the companies said.

The studio behind notable franchises such as "Resident Evil," "Spider-Man" and "Bad Boys" acquired the Austin, Texas-based Alamo Drafthouse from owners Altamont Capital Partners, Fortress Investment Group and founder Tim League, the companies added.

"They (SPE) have a deep respect and understanding of cinema's ability to both drive growth and create lasting cultural impact which aligns perfectly with everything Alamo Drafthouse stands for," Tim League said.

Alamo had filed for Chapter 11 bankruptcy protection in March 2021, as the theater business was hit by the pandemic due to stay-at-home restrictions, and it emerged from the bankruptcy less than four months later, Variety had reported.

Sony Pictures Entertainment and private equity firm Apollo Global Management had earlier expressed interest in acquiring Paramount Global.

(Reporting by Jaspreet Singh in Bengaluru; Editing by Vijay Kishore)