Sony Pictures (NYSE:SONY) shares were in plus territory Thursday, on word the film conglomerate has acquired Alamo Drafthouse, the seventh-largest movie theater chain in North America, the company announced Wednesday.
This is the first time a studio has purchased a theater chain since the Department of Justice’s antitrust division terminated a decree that prohibited certain film distributors from owning exhibition companies in 2020.
Enacted in 1948, the Paramount Consent Decrees ordered major studios to divest their cinemas. It was a landmark antitrust decision for the motion picture industry and held firm for more than 70 years.
However the decree only affected some studios. While Warner Bros., 20th Century Fox and MGM were barred from reentering the theater business without court approval, others like Universal, Columbia and United
Artists which did not own theaters at the time of the decree were therefore not banned from acquiring them in the future.
Which is why Columbia Pictures, now under the Sony banner, was able to take a minority stake in the Walter Reade Organization, which owned less than a dozen theaters, in the late ’80s and later acquired the Lowes Theater. It is also why Disney was permitted to own the El Capitan Theatre and Netflix was able to purchase The Egyptian Theatre and New York’s Paris Theater.
SONY shares moved ahead 17 cents to $84.13.
