Tim League never saw a day like last Wednesday coming. As of a year ago, Alamo Drafthouse had grown from a single-screen theater in downtown Austin—much of which he and his wife, Karrie, literally built with their own hands—into a nationwide chain of 41 locations that commanded a devoted following among cinephiles. Now he was sitting in his home office in Austin’s West Campus neighborhood, trying to explain to countless employees and loyal supporters how the company could recover after filing for bankruptcy that day. Even a walk through nearby Pease District Park wasn’t enough to relax him. “I was on email all day,” League told Texas Monthly, “until I passed out.”

As with so many other aspects of American life, COVID-19 exacerbated problems that already existed for the theatrical movie business. A transformation that had been well under way—audiences increasingly opting for their own sofas and Netflix over sitting in the dark next to strangers with sticky floors and $9 popcorn—was accelerated. Alamo Drafthouse’s ethos had long pushed back hard against that thinking. The Austin-based chain built its branding on celebrating a night at the movies as a premium experience that can’t be replicated at home. It popularized for many Texans the notion of the dine-in theater, serving a full menu and bar, with appetizers like cauliflower buffalo wings and craft cocktails inspired by the latest releases. It hosts specialty programming beyond the first-run blockbusters screened at the megachain megaplexes—classics, off-beat indies, and obscure genre films—all of them presented with the chain’s customized preshow programming in place of the onslaught of advertising to which most theaters now subject their audiences.

So despite worrisome declines in ticket sales for the industry in recent years, Alamo Drafthouse believed it had the right formula to keep business coming. Year-over-year sales were up about 6 percent in 2019 for the chain amid an industrywide decline of 5 percent. In fact, just last December, even as most of its theaters nationwide sat empty, CEO Shelli Taylor said the company’s approach would not “go out of style.” Yet no cinema had been prepared to deal with the worst twelve months that theaters have faced in generations. New investors are poised to step in to save Alamo Drafthouse, so the chain won’t be shutting down, but the road ahead isn’t necessarily smooth.

Alamo Drafthouse will attempt to rebuild its business just as movie studio–owned streaming services have gained strength over the last year thanks to so many Americans quarantining at home and in need of entertainment. The covenant that’s existed between movie distributors and theaters at least since the advent of VHS—traditionally giving theaters at least ninety days of exclusive rights to films before home-viewing was available—has already broken and may never return. “Clearly with movies being available on subscription services we’re entering pretty unprecedented times,” says Brad Gastwirth, chief technology strategist with investment firm Wedbush Securities.

Alamo Drafthouse’s new owners include private equity firm Altamont Capital Partners (which already owned a stake), Fortress Investment Group, and League. This arrangement only affects the sixteen remaining corporately owned theaters. Twenty-two Alamo Drafthouse locations are owned and operated by franchisees and are not party to the bankruptcy proceedings.

The chain’s core audience of cinephiles, in hearing the news this week, may worry that major changes are coming. Any entity with “capital” or “investment” in its name seems more associated with squeezing out maximum profits than with engaging in the sort of quirky experiences that Alamo Drafthouse is known for hosting—like Master Pancake Theater, a live event where comics crack jokes during films, or its “Weird Wednesdays” featuring typically schlocky flicks. But League insists that Alamo Drafthouse will remain the same. He says the leadership structure will remain intact, as will the funky programming and experiences. Fortress will not be involved in day-to-day operations, and League describes Altamont’s role as limited to helping with research and “strategic thinking.” He insists that these financial partners support Alamo Drafthouse’s quirks as core to its business.

Yet when Texas Monthly asked League during an interview on Friday if he could promise that Alamo would continue its commitment to never run advertisements (other than film trailers and its in-house promotions) before movies—long core to the chain’s differentiation from other theaters—he laughed. “I could not have predicted COVID would come and do this, and I can’t guarantee nothing will change,” he said. “But under my watch there’s certain principles we certainly believe in.”

Some theaters that were underperforming even before the pandemic will close. Three of those have been announced so far, including the New Braunfels location and the ninety-year-old Ritz on Austin’s Sixth Street, which the company considers the successor it its original downtown Austin theater. Alamo Drafthouse’s press release about the bankruptcy hinted at reevaluating leases for other locations, which suggests that more theaters may shutter, but League insists the company is done with closures.

Tim and Karrie League opened the first Alamo Drafthouse in 1997. They soon hooked loyal Austin audiences with boozy milkshakes, curated films, and popcorn so good that Redditors trade tips on how to make it at home. Plenty of other chains have added dine-in experiences and full bars in the past two decades, but Alamo Drafthouse has maintained an unusually devoted audience. Just this week, before the bankruptcy announcement, there was much social media praise for the company’s strongly worded statement that it would continue requiring mask-wearing and social distancing even after Governor Greg Abbott dropped the state’s mandate. Last fall, the Leagues drew positive reactions for auctioning off their personal memorabilia collection to offset pandemic losses. (At least eighty employees were reportedly laid off last summer, and many more remain furloughed.)

That’s not to say Alamo has done everything right. The company, and Karrie and Tim League personally, have been accused of mishandling accusations of sexual harassment and sexual assault allegations by employees and certain favored customers. League stepped aside as CEO, though he remains executive chairman, in spring 2020.

That leadership change became official not long after the coronavirus pandemic sent theaters into an existential crisis. The AMC chain, needing nearly $1 billion to pay its obligations, flirted with bankruptcy until deep-pocketed investors stepped in. Plano-based Cinemark, the nation’s second-largest chain, joined AMC in reporting quarterly revenue drop above 90 percent compared with last year. Cinemark laid off 17,500 workers at the beginning of the pandemic. Alamo Drafthouse is privately owned, so its finances are not available, but the chain may have faced a particularly rough 2020 given recent expansions into pricy markets like New York, San Francisco, and Los Angeles that contributed to a debt load north of $100 million.

As many Americans remain reluctant to return to theaters because of the ongoing pandemic, Warner Bros., owned by Dallas-based AT&T, decided to release its entire slate of 2021 films on the streaming service HBO Max on the same days they hit theaters. Other studios have yet to replicate the Warner Bros. approach, but Paramount announced this week it would keep its movie releases in theaters for just 45 days before placing them on newly launched streamer Paramount Plus. With the exclusive theater window narrowing, or potentially disappearing altogether, exhibitors will have even more incentive to attract customers with inducements aside from the films themselves—potentially additional attractions like Alamo Drafthouse has offered. In fact, League doesn’t consider the streamers to be his enemy. “We’re an out-of-the-home entertainment option,” he said. “We compete against bars, restaurants, and comedy clubs. There’s a vibrant restaurant economy even though everybody has a kitchen. I think it’s more poignant right now than ever before that you want to get out of the house.” League says studios have told him they can’t wait for normalcy to return.

As a way to promote the strength of theaters going forward—and to emphasize that Alamo is the same Alamo—the chain has scheduled a Lord of the Rings reunion series featuring appearances by cast members for later this month. League says the company has also experimented with new features during the pandemic: he expects Alamo to continue with private theater rentals and to improve a preordering system for food and beverages.

The bankruptcy and the news of the Ritz’s closure in particular garnered significant numbers of responses on social media. Edgar Wright, director of Scott Pilgrim vs. the World and Baby Driver, mourned the loss of the Ritz on Twitter. “Had many great screenings here for films I worked on,” he said. “Will miss it dearly.” Tommy Swenson, who programmed preshows at the Ritz from 2011 to 2017, told Texas Monthly over email, “The Alamo Drafthouse Ritz was an impossible place. For a time it was a cinema where it seemed like anything could happen.”

Even as the company grew in other directions, Swenson said, the Ritz “preserved the wild no-rules approach to loving movies that had originally made the Alamo into what it was.” The last piece of those wild early days is gone, and so is the Alamo that Texans have known for 24 years. Audiences will have to wait and see how the company adapts post-bankruptcy—or if it will even matter in an industry in which theaters are more endangered than ever.