How Alamo Drafthouse Battled Back From Bankruptcy
Photo: Amy Brothers / Denver Post via Getty Images
Alamo Drafthouse would like you to know that the reports of his death have been greatly exaggerated. In March, the fan-favorite movie channel sparked convulsions of agony on Twitter with the announcement that it was filing for Chapter 11 bankruptcy and shutting down money-losing sites in Kansas City, Missouri, and Austin and New Braunfels in Texas. Beyond a certain misunderstanding of the Chapter 11 beehive spirit – which restructures a company’s debt instead of triggering the kind of courthouse clearance sale more commonly associated with Chapter 7 bankruptcy – Alamo’s actions have been read as the last warning signs of bad luck going to the movies. The world’s largest cinema operators, Cinemark, Regal and AMC, have also all teetered on the brink of bankruptcy over the past 15 months. While Alamo was starving for clients and major Hollywood studios had all but shut down the pipeline to a new film product during this time, the news seemed like another nail in the coffin of joint film viewing.
On May 28, however, Alamo exited Chapter 11, having finalized an emergency sale of its assets to investment firms Altamont Capital Partners and Fortress Investment Group. On June 1, Alamo announced expansion plans: opening new locations in Staten Island, downtown Manhattan, St. Louis, and two in Washington, DC, over the next year – the continuation of a construction boom that the Texas-based chain began in 2019 And in the latest indicator of Nature’s healing and Alamo’s rebound from disaster, its Los Angeles theater complex has sold every screening of every film over Memorial Day weekend, a “likely” premiere for the nearly 40-slot Drafthouse channel, according to an announcement.
Tim League, founder and executive chairman of Alamo, calls himself a “movie crier”. In April, as things started to change for the industry as the chain “finally adjusted its balance sheet,” he found himself in tears in one of his own dark auditoriums. “The first time I went back to the theater the lights went out and I cried, I missed it so much,” League says. “I cried in King Kong vs. Godzilla! “
The past few months have been tense for Alamo. But after put about 80 percent of the line workers on leave at a time, and having survived the financial melting pot of bankruptcy by selling to big funders, the company is poised to achieve its greatest ambitions to date. With such expansion, however, comes a subtle but undeniable change in corporate culture. Established in Austin in 1997 as a secondary cinema by League and his wife, Karrie, before expanding to ten states with innovations such as highly participatory screenings of “Rowdy,” alcoholic milkshakes, special appearances from fine filmmakers. -loved, scavenger hunts and dinner parties to food-themed films, the movie chain (which took on Altamont as an investor in 2018) has effectively clung to its reputation as the latest mom-and-pop business. -pop of the cinema. So far.
“I look back on last December and things were pretty tough,” League said. “We were running out of money as a business. But we managed to get new funding. And we’re coming out of it really strong, financially. We had a big expansion plan in 2019. So we are taking over these projects. That’s exciting.
He continues, “Once we decided to go into chapter 11, we knew it was a path to healing. We ended up closing three cinemas. We got out of some pretty expensive deals that we didn’t necessarily want to continue. Yes, I understand that people hear that word “- bankruptcy -” and they are in a panic. But for us, we knew that day was coming.
In August, the executive will travel to New York City to oversee the finishing touches on the long-under-construction Alamo financial district location, which will include 14 screens and a full-service bar called the Press Room. “We acquired this collection of 60,000 metal newspaper advertising signs from the 1930s to the 1980s,” says League. “So they’re going to be on display, this museum of newspaper ads for films.” And it will be a functional printing press. So you can remove the plates from the wall and create index cards from the original plates for The Maltese Falcon or Casablanca or Stay alive. “
On Staten Island’s long-standing cultural connection to kung fu cinema – the Wu-Tang Clan, of course, calls the district “Shaolin” as the cornerstone of its wuxia-based myth – Alamo appealed to the musical brain of the hip-hop collective, RZA, to organize the bar of the new place, the Flying Guillotine. The space will feature an archive of memorabilia, posters and photographs spanning the history of kung fu film and possibly host afterparties for monthly screenings of martial arts classics. “As we worked on the terms he said, ‘I have a favor,’” League RZA recalled. “I don’t know if it would be good or not. But every time I come home to visit my mom, would it be okay if I took a quarter bar? Just as a surprise? ‘ I said, ‘No way. Absolutely not. We can’t have that. You are not fully trained.
In addition to the budget calamities of the COVID era, Alamo was rocked by a scandal last August. A talk in Kansas City, Missouri, alt-weekly Field detailed a laundry list of alleged abuses by officials at the chain’s Kansas City location, including sexual harassment, employee sexual and physical abuse, and racism – all of which have gone largely ignored by Alamo corporate executives, according to history.
When I ask League about the steps Alamo has taken to ensure that such abuses are not repeated in other places in the future, a spokesperson interrupts our call to say that the implementation of a Systemic change has become a “big goal during the pandemic downtime.” In an internal letter in August, Drafthouse chief executive Shelli Taylor called tackling abuse, inequality and harassment a “top priority” for the company. Ultimately, Alamo responded by expanding the harassment and discrimination training protocols followed by every Drafthouse ‘teammate’ (as chain employees are called), conducting workplace health surveys and implementing a new communication system called the Speak Up platform to report issues. “I will just say that we have heard these [issues] and they were deeply disturbing, ”League says. “And we’ve made it our top priority. Some of this work had already started and is continuing.
He insists that as long as Alamo maintains positive cash flow, the company’s new business owners have no intention of interfering with its day-to-day operations or credibility with the Criterion Collection crowd in as long as “gathering place for a new community of film, table and pop culture fanatics. ““ I would never want to lose some aspects of being a mom and a pop, ”League says.“ The idea is that we can be a theater that has a connection with everyone who comes in, has a local personality and does things that you don’t see big companies doing. I want to continue the vision that Karrie and I had in 1997, but to be a more mature and complete company. So our spirit is still in 1997. But our execution has been streamlined, modernized and improved.
During our conversation, League reveals that he’s sitting in a hotel room in a town he refuses to identify. “I’ve spent the last two days looking for new theater opportunities which shows we’re ready to grow and be the best we’ve ever been,” he says.
“Despite the emotional and financial difficulty of getting through the pandemic, I like to take the point of view of gifts and silver liners,” he adds. “Shut down your business completely and have a year to assess and review it from all angles and find ways to improve it – whether it’s corporate culture, opportunities for teammates.” who work with us, or from experience or from the financial model – we have learned so much by being closed. Now that we’re on the other side, let’s start to see the rewards. And I think our guests too.