Phoenix, AZ

Popular Phoenix Movie Theaters File For Bankruptcy

Greyson F

It’s hard to argue that any other industry has been impacted as much during the COVID-19 pandemic as the movie theater industry. Due to the enclosed space movie theaters were shut down nationwide. As this took place, production companies started to look for alternative methods of distribution. This includes Disney sending a number of its higher-profile movies to its streaming service, Disney+ (including live-action Mulan). Warner Brothers also made the move to send every single one of its releases to HBO’s streaming service on the same day it would hit movie theaters. With the significant lack of new content hitting the big screen and the drastic reduction in available seating, movie theaters have struggled to make ends meet. 

According to Investopedia (2020), an average of 60 percent of all ticket sales go directly to the studio, leaving just 40 percent of the ticket value with the movie theater. The majority of revenue movie theaters bring in come from concessions and food sales. In Phoenix, The Alamo Drafthouse Cinema is the king of food options, with a full-fledged restaurant and bar right inside of the movie theater, offering you the ability to not only eat before or after a movie but during.

At least that was the case until the pandemic hit. Because the Alamo Drafthouse is both restaurant and movie theater, both areas of the business had to shut down, which put even more people out of work. And now, it’s difficult to know for certain what will happen to the fan-favorite movie theater. Why? Because the Alamo Drafthouse parent company just filed for bankruptcy. 

Alamo Drafthouse Cinemas Holdings is based out of Austin, Texas, and runs over 40 theaters throughout the country. However, due to the extended shutdown here in Tucson and in other cities where the theaters are located, the company has been unable to stay afloat and, as such filed for bankruptcy with liabilities of nearly $500 million. 

What does this mean if you are a fan of the movie theater here in metro Phoenix? For the immediate future, the three theaters here in the greater Phoenix area will remain open, at least for the time being. The head of the movie theater has already announced downtown Austin, New Braunfels, and the Kansas City theaters will shut down for good. There is a chance more will come in the near future.

Alamo Drafthouse Cinema has filed Chapter 11 bankruptcy, which does allow the business to remain open as it looks for ways to raise money, cut debt, and work with its creditors. This means there may be other locations that are either completely shut down, or sold off. All three of the metro Phoenix movie theaters have done well since opening (which is why the region is one of the most prominent locations for the theater chain). There is a chance that the three theaters could be sold off though, and if this happens all three will likely be grouped together when sold. It is possible the chain might attempt to consolidate its reach and remain mostly in Texas (where the majority of its theaters are located). 

If you enjoy movies at the Alamo Drafthouse Cinema at the Gilbert, Chandler, or Tempe locations these theaters will remain open. However, should the theaters be sold during the Chapter 11 bankruptcy negotiations and another chain or owner buys the theaters out you will likely notice a change in the food offerings. All of the production equipment and technology will remain the same (if not see an upgrade), but the recipes are owned by Alamo Drafthouse Cinemas Holdings. This means, if you go to the movies specifically to enjoy one of the numerous flavored popcorn offerings (popcorn flavors you simply can’t find anywhere else), you’ll probably be out of luck, although at this point all of this is just speculations. 

So, for the time being, the only recommendations available for you are to, if you feel comfortable, go out, support the movie theater, see a movie, and order some of your favorite food and snacks. It’s hard to tell what might happen with the metro Phoenix theaters in the coming months. 

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