don't call it a comeback

How Alamo Drafthouse Battled Back From Bankruptcy

Photo: Amy Brothers/Denver Post via Getty Images

Alamo Drafthouse would like you to know that reports of its death have been greatly exaggerated. In March, the fan-favorite dine-in cinema chain triggered convulsions of Twitter agony with the announcement it was filing for Chapter 11 bankruptcy and shuttering money-losing locations in Kansas City, Missouri, and both Austin and New Braunfels in Texas. Above and beyond a certain hive-mind misunderstanding of Chapter 11 — which restructures a company’s debt as opposed to triggering the kind of fire sale on the courthouse steps more commonly associated with Chapter 7 bankruptcy — Alamo’s actions were read as the latest harbingers of doom for theatrical moviegoing. The world’s biggest theater operators, Cinemark, Regal, and AMC, have all also teetered near the precipice of bankruptcy over the last 15 months. With Alamo starved for customers and with major Hollywood studios all but shutting off the pipeline to new filmic product during that time, the news seemed like yet another nail in the coffin of communal movie-viewing.

On May 28, however, Alamo emerged from Chapter 11, having completed an emergency sale of its assets to the investment firms Altamont Capital Partners and Fortress Investment Group. On June 1, Alamo announced plans for expansion: opening new locations in Staten Island, downtown Manhattan, St. Louis, and two in Washington, D.C., within the next year — the continuation of a building boom the Texas-based chain began in 2019. And in the latest indicator of both nature healing and Alamo bouncing back from disaster, its Los Angeles theater complex sold out every single showing of every single film over Memorial Day weekend, a “likely” first for the nearly 40-location Drafthouse chain, according to an announcement.

Tim League, Alamo’s founder and executive chairman, calls himself a “movie crier.” In April, as things began to turn around for the industry while the chain finally “right-set its balance sheet,” he found himself in floods of tears in one of his own darkened auditoriums. “The first time I went back to the theater, the lights darkened and I cried, I missed it so much,” League says. “I cried in King Kong vs. Godzilla!”

The past few months have been tense times for Alamo. But after furloughing around 80 percent of the chain’s workers at once, and having survived the financial crucible of bankruptcy by selling itself to deep-pocketed backers, the company is poised to make good on its grandest ambitions to date. Such expansion, though, comes with a subtle but undeniable shift in corporate culture. Established in Austin in 1997 as a second-run movie house by League and his wife, Karrie, before branching out across ten states with innovations such as highly participatory “Rowdy” screenings, booze-y milkshakes, special guest appearances by beloved filmmakers, scavenger hunts, and dinners matched to food-themed films, the theater chain (which took on Altamont as an investor in 2018) effectively clung to its reputation as cinema’s last mom-and-pop business. Until now.

“I think back to last December and things were pretty difficult,” League says. “We were running out of money as a company. But we successfully brought on new financing. And we’re actually coming out of this really strong, financially. We had a heavy expansion plan in 2019. And so we’re picking up those projects. It feels exciting.”

He continues: “Once we decided to go into Chapter 11, we knew it was a path toward recovery. We ended up closing three theaters. We got out of a couple of deals that were fairly expensive that we didn’t necessarily want to pursue. Yeah, I understand people hear that word” — bankruptcy — “and are freaked out. But for us, we knew this day was coming.”

In August, the executive will travel to New York City to oversee finishing touches on Alamo’s long-in-the-works Financial District location, which will include 14 screens and a full-service bar called the Press Room. “We acquired this collection of 60,000 newspaper metal ad plates from the ’30s to the ’80s,” League explains. “So they’re going to be on display, this museum of newspaper ads for movies. And it’ll be a functioning print shop. So you can actually take the plates off the wall and make note cards from the original plates for The Maltese Falcon or Casablanca or Staying Alive.”

Apropos Staten Island’s longstanding cultural connection to kung fu moviedom — Wu-Tang Clan, of course, refers to the borough as “Shaolin” as a cornerstone of its wuxia-based mythos — Alamo has enlisted the hip-hop collective’s musical mastermind, RZA, to curate the new location’s bar, the Flying Guillotine. The space will feature an archive of memorabilia, posters, and photography spanning kung fu movie history and eventually host afterparties for monthly screenings of martial-arts classics. “As we were working out the terms he was like, ‘I have a favor,’” League recalls RZA saying. “‘I don’t know if it would be okay or not. But every time I’m coming home to visit my mom, would it be okay if I took a bar shift? Just as a surprise?’ I said, ‘No way. Absolutely not. We can’t have that. You’re not fully trained.’”

In addition to budgetary calamities of the COVID era, Alamo was rocked by scandal last August. An exposé in the Kansas City, Missouri, alt-weekly The Pitch detailed a laundry list of alleged abuses by managers of the chain’s Kansas City location including sexual harassment, the sexual and physical abuse of employees, and racism — all of which went largely unaddressed by Alamo corporate brass, according to the story.

When I ask League about the measures Alamo has taken to ensure such abuses won’t be repeated at other locations going forward, a spokesman interrupts our call to say that the implementation of systemic change became a “big focus during the pandemic downtime.” In an internal letter in August, Drafthouse chief executive Shelli Taylor called tackling issues of abuse, inequity, and harassment a “top priority” of the company. Ultimately, Alamo responded by expanding the harassment and discrimination training protocols taken by every Drafthouse “teammate” (as employees of the chain are called), conducting workplace health surveys, and implementing a new system of communication called the Speak Up platform to report concerns. “I’ll just say that we heard those [issues] and they were deeply troubling,” says League. “And we did make it our absolute priority to address. Some of that work had already begun and is continuing.”

He insists that as long as Alamo stays cash-flow positive, the company’s new corporate owners have no intention of interfering with its day-to-day operations or credibility with the Criterion Collection crowd as a “gathering place for a new community of film, tabletop, and pop-culture fanatics.” “I would never want to lose certain aspects of being a mom-and-pop,” League says. “The idea is that we can be a theater that has a connection to everybody that comes, has a local personality, and does things that you don’t see bigger companies doing. I want to continue the vision that Karrie and I had back in 1997, but be a more mature, full company. So our spirit is still 1997. But our execution has been streamlined and modernized and improved.”

During our conversation, League reveals he is sitting in a hotel room in a city he refuses to identify. “I spent the last two days looking at new theater opportunities, which is telling that we are ready to expand and be the best we’ve ever been,” he says.

“Despite how difficult it was emotionally and financially running through the pandemic, I like to take the perspective of gifts and silver linings,” he adds. “Closing your business entirely and having a year to assess it and review it from all angles and find ways to make it better — whether that be company culture, opportunities for teammates that work with us, or whether that’s dialing in the experience or financial model — we learned so much by being closed. Now that we’re on the other side of it, we’re going to start seeing the rewards. And I think so will our guests.”

How Alamo Drafthouse Battled Back From Bankruptcy