Last month, Alamo Drafthouse surprised many when it announced plans to file for Chapter 11 Bankruptcy protection, as part of a strategy to recapitalize and relaunch its business as the pandemic recedes. The Austin-based circuit with 41 locations has been well-regarded among exhibitors and had been on an impressive path of revenue growth and expansion before the collapse of the exhibition in 2020. As one measure of its strength, Alamo grew annual revenues in 2019 by 5% while the overall North American box office fell by 4%.
Alamo had established a pattern of adding eight new locations every year, including locations in Los Angeles and New York which had opened in the year just prior to the shutdown. Despite the shock of a Bankruptcy filing, much express optimism that its Founder Tim League will be able to use its fundamental strengths to navigate this stretch of troubled waters. In a vote of confidence, its major financial backer Altamont Capital and the entire senior management team will remain involved post-bankruptcy.
League also has re-committed to his pledge to provide customers with an environment for enjoying movies based on these fundamental principles: “No talking. No texting. Great beer, great food, great sound, great picture.” League is calling his recovery plan Chapter 12 – a logical next step after Chapter 11. Said League, “There are going to be quite a few theatres that do shutter, probably the neglected theatres of certain circuits, and what that’s going to do is open up new opportunities and holes in the market for us to take advantage of.”