Tim League, Alamo Drafthouse: America's Coolest Movie Theater

America's Coolest Movie Theater

With the holiday season, the annual conundrum sets in: Time is scarce, but entertainment options are plentiful. You know, the garden variety merry events that always come around this time of year, such as:

  • An "Elf Quote-Along" where you can channel your inner-Buddy in a sea of twirly swirly gumdrops
  • A "Harold & Kumar" screening with free White Castle-style burgers as part of the "High for the Holidays" series
  • A "Terror Tuesday" showing of "Silent Night, Deadly Night"
  • An old-fashioned XMas Pops video karoake group sing

If these don't sound like your typical yuletide traditions, it's because they don't originate from a traditional kind of place. They are just a few of the untold special events held throughout the year at the Alamo Drafthouse Cinema, the Austin, Texas-based theater chain started by Tim League in 1997.

As the proprietor of a 21st-century "Cinema Paradiso," League is, well, in a league of his own. What started as a film buff's respite from a soul-crushing career has become one of the great American entertainment stories in its own right. The Alamo Drafthouse is much more than a standard multiplex showing the latest releases -- it's a movie lover's dream complete with cold beer, steak sandwiches (among many offerings), celebrity sightings, air sex competitions, and one-of-a-kind nights like the killer duo of the Marx Brothers "Horse Feathers" and the Prohibition-era bathtub gin cocktail, the Bee's Knees.

League, 40, explains why nerds are central to the company's success, if an Alamo Drafthouse will be coming soon as a theater near you and what kind of marketing lessons you can learn from Mr. Spock.

How did you get started in the showing-movies business?

It wasn't a well thought out plan. I was an engineer for Shell Oil and knew it was not the type of career I wanted to work all my life and retire from. I was living in Bakersfield, Calif., in 1994 and there was an art deco theater, the Tejon Theater, which means either "badger" or "gold ingot," that I drove by going to work. One day, I saw a "For Lease" sign in the window. That night, I talked about how cool it would be to run a movie theater with my then-girlfriend, now-wife, Karrie, and some other friends. I took it over at 24, which was a great time to be too arrogant for my own good. I thought I could run the Tejon even though I had no experience whatsoever.

Were you a movie buff?

That was my sole credential. I spent my formative years, from 12 to 18, in St. Clairsville, a small town in southeast Ohio. It was during the first wave of mom-and-pop video stores, and every weekend my group of friends would hang out watching movies. We had limited entertainment options, basically cruising around finding nooks and crannies to drink beer, so there was a lot of camaraderie in our movie marathons.

What lessons did you learn from running the Tejon for two years?

First is the biggest cliche: location, location, location. The Tejon was perceived to be unsafe because we were literally on the other side of the tracks. The second thing is to be financially sensible. We didn't have much money, so I kept rigorous controls. We did most of the renovations ourselves. It was the same approach we took at the original Alamo Drafthouse. The Tejon was more indie cinema than we are now, but it served as a perfect incubator for when we moved to Austin in 1996.

Why did you choose Austin?

I lived in Houston until I was 12, and both my wife and I went to Rice and spent our weekends in Austin because it was happening. We liked the city and it met our limited criteria of being a university town with a dynamic, fun entertainment scene and reasonable real estate.

How did you get the original two-screen Alamo Drafthouse up and running?

We spent about $250,000. I was able to take $50,000 out of Bakersfield, but that didn't mean much because I put $50,000 into it. My wife's parents mortgaged their house, some friends invested, and in 1996, Bank of America offered an "Invest in America" loan. That was for $50,000. Apparently, we were one of a very small percentage, like 5 percent, that paid it back. From Bakersfield, we kept some fixtures and equipment like projectors, but we put in all new everything else: Kitchen, plumbing, air conditioning, a grand staircase, a new roof that had to be raised a bit. Again, we did all of the construction, and whatever else we could do, we did. To this day, I don't know how it happened.

Did you always serve alcohol at your theaters?

In Bakersfield, I showed up in a T-shirt and jeans, assuming the state would give me a liquor license no problem. There was some age discrimination, but I didn't present myself well and we were denied, rightfully so. I didn't make that mistake in Austin. We outsourced the process to a third-party company that handles liquor licenses.

How long was it before you felt the Alamo Drafthouse was catching on?

It's good food, adult beverages and terrific films, so the movie buff audience developed relatively quickly. The full Alamo Drafthouse brand and concept took longer to reach beyond Austin. The wider audience started coming maybe five or six years ago, when I started the Fantastic Fest with Harry Knowles of Ain't It Cool News.

Tell us about Fantastic Fest. It seems as though the "Geek Telluride" is quite a thing ...

It's held every year at the end of September. The first one was in 2005, and basically, it's a celebration of all the "nerd" genres, sci-fi, horror and fantasy. Both Harry and I love these kinds of movies, which don't win awards and are often viewed as low-brow B-movies. There's a lot of creative work in these films and people come from all over the world for Fantastic Fest. The 2011 VIP passes sold out in under a minute. There are parties and crazy events, and it has a great reputation among fans of these genres. We'll always keep it manageable, so it doesn't turn into Comic-Con, but anyone is welcome. Just know that people aren't coming to make fun of these movies. We sincerely love them.

The Rolling Roadshow is another cool Alamo Drafthouse event.

We have a portable 35mm projection room in a truck that we set up to show movies during the summer on a 50-foot screen. The selections fit the surroundings. Over the years, we've shown shown "Escape From Alcatraz" on Alcatraz Island, "The Searchers" in Monument Valley, and a "Rocky"-thon on the steps of the Philadelphia Art Museum. These are movie nerd vacation destinations. It's great fun and great branding.

Now that there are 10 Alamo Drafthouse locations and the company is a well-known movie business commodity, are you able to work with the studios?

For the last couple of years, we have been doing promotional events because the studios want to reach our intense vocal film community. I set up one with Paramount in 2009 where we invited a bunch of fans to a free screening of "Star Trek II: The Wrath of Khan" on a Monday at 10 p.m. After 15 minutes, the film started to deteriorate, and the sound went out of sync, so we shut it down. I went up to the projection booth to "fix" it while a man in a trenchcoat carrying two film canisters walked in. It was Leonard Nimoy, Mr. Spock himself, and he brought the new "Star Trek." Only the projectionist and myself knew about it, I didn't even tell the theater managers that we were debuting the J.J. Abrams version. All these years of being actively engaged with diehard film fans has allowed Alamo Drafthouse unique opportunities. It's a big part of what we do.

What are the franchise expansion plans?

Right now, we have one franchise outside of Texas. It's in Virginia, and they are looking to expand in the D.C. area. For a new franchise, the investment ranges from $1.4 million to $7.8 million, depending on whether it's in an existing theater or a raw space build up from the dirt. Each Alamo Drafthouse Cinema franchise will have 6-9 screens, which requires 25,000 to 35,000 square feet. We get a lot of interest, but not a lot of viable candidates.

How aggressive will your franchising efforts be and what markets are you looking at?

I stepped back into the CEO role after six years to help oversee our expansion. It won't be rapid growth by any stretch of the imagination -- we'll do it carefully and cautiously. New York and Los Angeles make a lot of sense because they are the two major film communities and we've moved into distribution.

Distribution seems like a totally different animal. What new challenges are you facing?

In our theaters, we have built-in promotional tools like our bulk e-mail list, Twitter, on-screen ads, Facebook and so forth, but for films we're distributing, we have to start from scratch and rely on outside PR. It's a challenge, but it adheres to our core principle of delivering amazing movies. The idea came out of the Fantastic Fest, where many great small films never found an audience in the U.S. There's no quota on how many we'll distribute, but it'll probably be a few films a year that we're passionate and enthusiastic about that need help finding an audience.

The first Alamo film, "Four Lions," came out a few weeks ago to solid reviews. What can you tell us about it?

It's a jihadist comedy. It did reasonably well in its opening week with strong box office in New York City and Austin. It will be rolling out in arthouses across the country over the next few months. The film's director, Chris Morris, was on "Late Night with Jimmy Fallon," and "Four Lions" was even screened for anti-terror members of the NYPD. Word is getting out and momentum is building, which will help with the real revenue drivers, DVD and on-demand, down the line.

Now that movies are virtually available anywhere at anytime, does Alamo Drafthouse have to rely more on special events?

The events are fun and build the brand, but the vast majority of revenue comes from first-run new movies. Our community of moviegoers gives us a competitive edge, but it remains to be seen what will happen with the general audience as more and more films are going to be available on-demand while still in theaters. We're used to the year-to-year variances of the industry, because we all rely on big hits. In 2009, "The Hangover" was an unexpected smash that was perfect for us because it's a beer-drinking movie-watching experience. We're expecting a big end to 2010 with "Harry Potter" and "Tron," which some are saying could be bigger than "Avatar," but we won't know how the entire year shakes out until the holiday season is over.

What is your favorite ongoing promotion?

At the original Alamo Drafthouse, we have "Weird Wednesdays," where we show low-budget exploitation flicks from the '70s and '80s at midnight for $1. These films are discarded as trash, but we try to look at them in a scholarly way. We get upwards of 200 people who respect the films enough to show up in the middle of the night. I still go regularly. I also like when we bring in bands to accompany classic silent films. It's very cool to listen to them create their own film scores.

What movies have been an inspiration to you as an entrepreneur?

Two that come to mind are "Risky Business" and "Godfather II." I guess I shouldn't call them inspirational or full of life lessons, but they are two of my favorites.

Entrepreneur Spotlight

Name: Tim LeagueCompany: Alamo DrafthouseAge: 40Location: Austin, TexasFounded: 1997Employees: 3002010 Projected Revenue: $18 millionWebsite: www.drafthouse.com/The original version of this article appeared on AOL Small Business on 12/5/10.

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