Sony Pictures Entertainment said it bought Alamo Drafthouse Cinema, a dine-in movie theater chain that shows new releases and cinematic classics, as the studio continues to expand into experiential entertainment.

The deal includes Alamo Drafthouse's 35 locations in 25 metropolitan areas. The terms of the deal were not disclosed. Michael Kustermann will remain as Alamo Drafthouse’s CEO and serve as CEO of Sony's newly created division called Sony Pictures Experiences, according to a statement from Sony.

All Alamo Drafthouse locations will continue to operate under the Alamo Drafthouse banner and the company’s headquarters will remain in Austin, Texas, according to the statement.

Sony bought Alamo Drafthouse from Altamont Capital Partners, Fortress Investment Group and Tim League. The sellers came into ownership of the company after Alamo Drafthouse filed for Chapter 11 bankruptcy protection in March 2021 to restructure as it sought to survive what the pandemic wrought on the industry.

Alamo Drafthouse, North America’s seventh-largest movie theater chain, was founded by Tim League and Karrie League in 1997. The first theater opened in Austin as a dine-in cinema hall.

League said in a statement that Sony Pictures has “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.”

Sony also bought Fantastic Fest, a genre-themed film festival owned by Alamo Drafthouse.

Alamo Drafthouse had about 40 locations across the country, with the majority in Texas but also theaters in California, Colorado, Florida, Illinois, New York and North Carolina. Four locations in the Dallas-Fort Worth area and one in Minnesota closed in early June after an Alamo Drafthouse franchisee filed for Chapter 7 bankruptcy protection.

Sony’s purchase of Alamo Drafthouse marks the first time a traditional movie studio has owned a movie theater chain in more than half a century. The Paramount consent decrees, which went into effect around 1948, prohibited Hollywood studios from owning movie theaters. The decrees were established after federal courts said movie studios were fixing ticket prices and monopolizing film distribution.

A federal court ended the Paramount consent decree in 2020, saying new technology has created many different movie platforms that did not exist when the decrees went into effect, such as cable and broadcast TV and streaming services.

Goldman Sachs served as the financial adviser for Alamo Drafthouse on the deal.