How the smartest movie theater owner in the country has severely jeopardized his company's brand
- Alamo Drafthouse is one of the most successful independent theater chains in the country with its mixture of fun programming and tasty food and drinks.
- CEO Tim League is navigating the company's first major controversy following the rehiring of a movie blogger who was accused of sexual assault last year.
- League now sets forth with the biggest challenge of the company's 20-year existence: proving Alamo Drafthouse is not just a "boy's club," and rebuilding trust.
Tim League casually sipped a beer on the outdoor patio of a bar in Toronto, as the hustle of this year's Toronto International Film Festival rushed past him. Before joining the fray himself, the owner of one of the most successful independent movie chains in the country, Alamo Drafthouse, was happy to have a moment to reflect.
"I feel really blessed that this is my job," League told Business Insider. "I'm here working at the Toronto International Film Festival, and I saw three really good movies yesterday."
48 hours later, League's festival only got better when the distribution company he cofounded, Neon, beat out Netflix to nab the biggest title at TIFF, "I, Tonya," for $5 million. The darkly comedic look at the controversial rise and fall of US figure skater Tonya Harding (played by Margot Robbie) will be Neon's first-ever Oscar contender when it opens in theaters later this year.
But things drastically changed for League the following day, when the site Pajiba ran a story that revealed the Drafthouse CEO had rehired blogger Devin Faraci, the former editor-in-chief of the Drafthouse-owned Birth.Movies.Death movie site, who resigned after being accused of sexual assault last year. Faraci came back as a copy editor, and wrote film blurbs for this year's guide to the company's annual genre film festival, Fantastic Fest (which kicks off Thursday in Austin, Texas).
Social media and the film world instantly went into an uproar, particularly because news of Faraci being back at the company came just 11 months after he stepped down. The result led to a Fantastic Fest programmer resigning, Faraci resigning for a second time, and numerous public apologies by League.
For a company that's built a reputation on being young, hip, and fun - three things all of the major multiplexes in the world wish they were - the controversies Drafthouse is most familiar with usually come from a unique idea devised by League, or by the creative directors at one of the 29 Alamo Drafthouse theaters across the country.
A recent example was over the summer, when Alamo Drafthouse held all-women screenings of "Wonder Woman." The negative reaction by some men on social media blindsided League, who had done an all-women screening for the first "Sex and the City" movie in 2008 in Austin with zero objections. The "Wonder Woman" version resulted in three lawsuits (two are still ongoing). And when League got word that a man showed up to one of the screenings at the Drafthouse in Brooklyn, New York, he almost cleared out another screen in the theater and had the gentleman sit and watch "Wonder Woman" there all by himself. But the idea never came to fruition.
"That's where sometimes I have to check myself," League said.
But that's all fun and games to League, and plays well with Drafthouse customers. The Faraci controversy, however, put League and his company in the unfamiliar place of being on the wrong side of an issue for its audience.
Building the fandom
Alamo Drafthouse started out in Austin, Texas, 20 years ago, when League and his wife Karrie renovated an old building into a second-run theater. It stood out for the weird and unusual movies that played there, but what made it addictive was that the theater provided its customers with the option to eat and drink alcohol at their seats while watching the movies. As the company evolved and become a chain, so did the specialties of the menu and drinks (which often are themed to movies playing at that particular time at the Alamo). And with the evolution of online ticketing, and no need for ticket windows, Alamo Drafthouse lobbies are now bars. All of this has made the feeling of going to an Alamo Drafthouse more than just seeing a movie. It's an all-night experience. And most multiplexes and independent theaters have been playing catch-up the last two decades, trying to capture some of the cool factor Alamo Drafthouse has.
League said all that he's doing is going back to the model of the 1940s and 1950s, before the multiplex was created, and individual theaters had to focus on marketing to their cities or towns to get patrons in the door.
"A lot of what we do is not that innovative," he said. "It really goes back to older traditions of establishing that bond with your core audience."
I have seen that love for all things Drafthouse firsthand, and it's quite impressive.
My first taste was in Austin in 2013. Alamo Drafthouse likes to do roadshows across the country in the summers. Past events have included a screening of "Close Encounters of the Third Kind" in Wyoming, outdoors by the movie's epic Devils Tower location; or showing "Jaws" on a floating screen in a body of water, while everyone watches on inner tubes.
The roadshow I attended was for "Snowpiercer," Bong Joon-ho's post-apocalyptic thriller set on a train. For the event, we all loaded onto a train and traveled to an open field about an hour away to screen the movie. League was there, as well as Bong, and even director Nicolas Winding Refn hopped on the train the last minute. But there were also 100 or so dedicated Alamo Drafthouse patrons who attended the event. After the movie, we all got back on the train and partied all the way back to the station, each car themed like the dystopian movie.
The loyal Alamo Drafthouse fandom is an impressive sight in an era when interest in the moviegoing experience has diminished greatly. And League, who is a modern-day P.T. Barnum for all things Alamo, is certainly aware of it. With the internet and social media reaction king, the CEO believes being a tastemaker and understanding patron needs are vital to his business.
"Yelp, Facebook, the customer experience is job number one," League said. "You can't ignore data streams or any trends."
But despite League's efforts, Alamo Drafthouse is currently swirling in a bad trend.
The "Boy's Club" stigma
After the Pajiba story broke last Tuesday, League took to Facebook that evening and addressed the Faraci rehiring. He confirmed that he brought Faraci back into the company as a copy writer, and to write film blurbs - and he hoped people would understand that Faraci was entitled to a second chance.
"I understand there's some discomfort with the idea that Devin is once again employed by the Alamo Drafthouse," League wrote in the post. "However, I am very much an advocate for granting people second chances, and I believe that Devin deserves one. He continues to confront his issues and to better himself with the help of his friends and family. I am proud to consider myself a part of this process."
Here's the entire statement:
League's explanation didn't go over well. The post was flooded with hundreds of comments, many disappointed in the CEO doubling down on the rehiring.
That was followed on Wednesday by Fantastic Fest international programmer Todd Brown resigning. He posted his own thoughts on Facebook, in which he said he was "embarrassed and ashamed" to have worked at Drafthouse:
"Rehabilitation is a noble and worthwhile pursuit, to be sure, but it is also one that requires the involvement of a community," Brown wrote. "Forgiveness is fantastic but forgiveness is the sole purview of the person who has been wronged. Tim, bluntly, does not get to forgive Devin for Devin's alleged - and undisputed - sexual assault. Only the victim gets to do that. And where was she in this? Where was the concern for any victim of sexual violence and the message this would send to them? While I do not believe there was any malice in the decision to bring Faraci back there was, however, a clear, undeniable and arguably even callous disregard for the impact of this decision on anyone not named Devin Faraci."
Here's Brown's full statement:
Brown touched on an element that had many in an uproar, that League chose to rehire Faraci without consulting his employees or Faraci's alleged victims. (Last September, following Faraci tweeting about Donald Trump's now infamous comments during an "Access Hollywood" taping, a woman replied to him and alleged that Faraci had sexually assaulted her. League was emailed by another woman a month later, who alleged she had been sexually harassed by Faraci as well.)
It was a troubling revelation. And it was especially troubling that League acted without consulting employees about it, given that he said to Business Insider, at TIFF, that one his major learnings in the 20 years of Alamo Drafthouse has been how important it's been to get employee feedback to better the company.
"In the early years we would think, 'We're a good company, our employees like working here because it's a cool company,' but we never measured anything," League said. "Now we realize, 'Oh my god, why don't we just increase our communication with our staff to say how can this be a good place to work?' That's certainly changed for us."
On Wednesday evening, League sent an industry-wide memo to his company announcing that he had accepted Faraci's resignation. League also posted another statement on Facebook:
"Over the past few days, I've realized that decisions I have made over these past months have been problematic," League wrote. "I am concerned about what these choices may say about me and the values of this company to employees, customers and the community at large. I'm humbled and deeply sorry."
But that didn't stop Fox Searchlight from pulling Oscar-favorite "Three Billboards Outside Ebbing, Missouri" from this year's Fantastic Fest.
Searching for redemption
The controversy comes at a time when the independent theater community is already suffering a black eye from sexual harassment claims. In August, two top employees of the Los Angeles arthouse staple Cinefamily stepped down after allegations of sexual harassment surfaced. The theater has since suspended all activity.
It's very unlikely Alamo Drafthouse will be closing up shop over its controversy, but both instances are similar in that they shine a light on the male-controlled theater chain industry. However, for Drafthouse it goes a step further. Steeped in the male-heavy genre world, what drives the fandom of Drafthouse, its festival, website, and merchandise company Mondo, are the voices (and social media reach) of the predominantly male bloggers and fans that attend events and frequent the theaters. Take Fantastic Fest. It's incredible to see how male-heavy it is. I've never been to an event where the line to the men's room is twice as long as the women's.
"Anyone who has ever suggested that Fantastic Fest and the Drafthouse is just the geek friendly equivalent of the classic Old Boys Club, you have just been proven correct," Brown wrote at the end of his Facebook post. "We have just seen that Club in action. There it is, the Club utterly ignoring the victim while it creates a protective ring around the perpetrator. Telling every woman who has ever been harassed or assaulted that the predatory males around them will be protected if they are a part of the Club. Telling every woman that the Sad Man whose life is a shambles because of his own actions deserves help and support in putting himself back together while she deserves … nothing."
League, who declined numerous requests for a follow-up interview with Business Insider following the controversy, wrote in his statement regarding Faraci's permanent resignation from Alamo Drafthouse that he has begun setting up meetings with staff at all his theaters around the country to hear their thoughts on his controversial decision.
"Transparency, consistency, and credibility are crucial at this point to restore his reputation and that of Alamo Drafthouse," Dr. Nir Kossovsky, CEO of the risk management company Steel City Re, told Business Insider.
Though League always seems to place Alamo Drafthouse in a progressive position - unintentionally with the "Wonder Woman" screenings and intentionally with providing gender-neutral restrooms at his theaters last year - he's also known in the industry for being extremely loyal, and that seems to be what backfired here.
Sources tell Business Insider League was simply looking out for a friend, but has since regretted that decision and his driven to make amends. In the last week, League has reached out to Faraci's alleged victims to apologize and is starting the long road back to gaining the trust of not just the Alamo Drafthouse patrons, but his staff.
When talking to League at TIFF about the evolution of the company over the past 20 years, and the responsibility that comes with building a brand, he touched on numerous times the importance of not just making sure customers are having a great time, but that the people working for him are as well. This controversy is a sobering reminder to League that he still needs to work on the latter.
"We are a real company now," League said. "Still a little rough around the edges."