A Broken Trust at the Alamo Drafthouse

Chaos reigned.

It started off as a cute phrase, purloined from the movie Antichrist. "Chaos reigns," a fox declares as it consumes itself. It became a stand-in for the wild and free party atmosphere that the Alamo Drafthouse promulgated. It's now become a metaphor for the most traumatic and controversial year in the firm's history.

Last month, Drafthouse founder and CEO Tim League consulted with a former executive at Southwest Airlines, to gain her insight into hiring the cinema firm's own first-ever people officer, responsible for all aspects of staff experiences and interactions. League said, "I want to find someone who understands who we are, understands the challenges that we've faced in the last six months, and can help build a great employee culture. I'm ready to step away from that, because my 20-year record proves that I'm not necessarily the perfect person to do that."

Many words have been used to describe Tim League. Hyperactive. Ambitious. Passionate. But contrite hasn't necessarily been on that list. In his West Austin home, League looks tired, graying, and a little older. He'd spent much of the last six months on the road, visiting every Drafthouse location in a massive listening exercise. Trying to bind together a company that had gone from the darling of indie film culture to a borderline pariah. Trying to find a way to fix something that started as a PR disaster and had become a long, brutal self-examination.

The 20-Year Party

2017 was supposed to be a spectacular year for the Drafthouse, marking its 20th anniversary, kicking off with a Memorial Day invite-only party at the flagship Alamo Ritz. Less than a month later, Tim League was in a near-fatal cycling accident. But the company crash came last September – or rather it began a year earlier, when Devin Faraci, editor of in-house movie news publication Birth.Movies.Death., resigned after being accused of sexually assaulting and harassing several women. The Alamo was applauded at the time for its swift response; yet in September 2017, film podcaster George Hick­man found Faraci's byline on film descriptions for the Drafthouse-run Fantas­tic Fest, and the company confirmed he had in fact been rehired as a copywriter only four months after his ignominious exit. At the time, League wrote "I am very much an advocate for granting people second chances, and I believe that Devin deserves one."

Faraci quit again, but the revelation of his return opened a floodgate, as the Drafthouse management was condemned for failing to deal with other cases of sexual harassment and misconduct by employees and favored customers. Indiewire published specific accusations by former Drafthouse staff against Ain't It Cool News founder and publisher Harry Knowles (which he has consistently denied) for serious sexual misconduct at Drafthouse events. The article claimed that not only had the Leagues known about the allegations, and did too little in response, but they continued doing business with Knowles (they have since severed all ties with Knowles and AICN). Questions flew: Who knew what, when, and why wasn't more done? After all, the Drafthouse was supposed to be "the good guys," the safe place for the underdog in the audience and behind the camera. It had been at the vanguard of sexual politics in entertainment through high-profile actions like the women-only Wonder Woman screenings and building gender-neutral bathrooms at Alamo Mueller. Drafthouse National Direc­tor of Family and Community Program­ming Amy Averett put it simply: "We disappointed people."

"It speaks to my own personal blind spots," said League. He called Faraci's initial departure "appropriate," adding that the two had remained in contact. After four months, he began to be concerned about Faraci's financial and emotional state, and so brought the idea of rehiring him to senior management. However, he was less seeking their input than making a statement. League said, "Our primary core value at the company is 'Do the right thing,' and in my mind I thought I was doing the right thing. But what I didn't realize, which I'm very sorry and embarrassed about now, is that trying to do the right thing for a longtime employee and friend did the absolute wrong thing for women survivors in the organization and everywhere. I just didn't see it, and that was the primary, shocking revelation to me of male bias, of not understanding what that says about the company and about myself."

The Alamo Drafthouse began on a knife edge. It was the cool, modern version of a grindhouse, an upmarket dollar theatre, an arthouse with edge. Founded in 1997, it was one single-screen cinema running with a few volunteers and part-timers, Tim in charge of programming and daily operations, and his wife Karrie as office manager. She said, "I was in charge of all the accounting, all the human resources, such as they were. I was in charge of everything to do with lawyers, everything to do with the government, everything to do with taxes and the city." Twenty years later, it's a chain, the thing they never thought they would be. Over 5,500 employees at 29 locations in 10 states, with another dozen planned openings on the books, including theatres in Los Angeles and Washington, D.C.

That's unprecedented in modern cinema – an arthouse going cross-country and mainstream – but strip away the showbiz glitz, and what the Drafthouse was was just another fast-growing company. The founding couple's roles had changed dramatically, especially for Karrie: She hired accounting staff in 2006, and a human resources officer in 2008, and finally stepped aside from any formal management role in 2010. "Really," she said, "it's unrecognizable now, with a dozen people working in accounting, a dozen people working in human resources, doing all those things I was never trained to do, that I never fully grasped."

When Karrie stepped down in 2010, it was in no small part an admission that the mom-and-pop operation had become a nine-location mini-chain. Mean­while, Tim theoretically moved to the CEO position, but his fingers and decisions could be seen at every level. He was the self-described czar of Fantastic Fest, and no film played without his approval. He'd dip into the architectural files for new locations. Even the brief-lived decision to dump salad bowls for salad trays came from Tim, and the decision to go back to the bowls only came after people convinced him that everyone hated the trays. Even after last summer's bike accident, he was driven, still in hospital clothing, to introduce a screening in the Hill Country of The Bad Batch (a film distributed by one of his other ventures, Neon). It's not that Tim made every decision, but that there was a sense – whether accurate or not – that he was omnipresent. That, he concedes now, was a fault. "I think if I had worked on building a better system of communication, and if I had not unintentionally signaled that I'm the big boss and my decision stands, then people would have been more comfortable providing feedback."

There was also a question of priorities. Averett said, "A lot of Tim's focus had been external, it was growth-focused. Not just adding theatres, but starting Neon." That outward gaze left little time for introspection.

Cool Kids and Boys' Clubs

The allegations about how the firm dealt with harassment, including during Karrie's tenure as de facto HR manager, came back last month with a lengthy article on Splinter (part of the Univision-owned Gizmodo Media Group, formerly and better known as Gawker). A core part of the article by Texas Monthly writer Dan Solomon was a recording, made legally but without Karrie's knowledge, of a lunch meeting between herself and a former employee who had made some of the earlier allegations, and challenged the Leagues' responses to serious complaints when they were originally made, well before Faraci's original firing. Karrie said, "The past 10 years [since] the incidents occurred that these women brought up, I thought we were friends." While the automatic response for many people about being covertly recorded might be anger, Karrie said she took it as a time for self-reflection. "I thought that I was the kind of person that if somebody had a problem with me, then they could talk about it with me, and they clearly did not, and they just held it, and were never comfortable enough. So this whole illusion I had of being someone that people could talk to is just shattered."

It's not that no one would give the Leagues feedback, or tell them they were wrong. There were enough of them that, Karrie said, "because of those people, we thought we were doing a good job of being approachable."

Anyone who spent time around Alamo affairs knew who a lot of those people were. The mantra was that the Drafthouse was a family, and that Tim and Karrie were just big film nerds who happened to own a multi-million-dollar operation. But families have their own politics, and not every relative sits close to the head of the table. It was the same die-hards snagging tickets for special events. Behavior that would have led to regular customers getting kicked out of a screening was tolerated when it was a special guest, or visiting filmmaker. The snark culture that plagues modern online film culture pervaded discussion. Internally, League said he realized that hiring and promotion had become nepotistic. This was all an open secret: One experienced film booker, when first moving to Austin, was told that the best way to break into the local industry was to get a waiting job at the Drafthouse.

Faraci became the embodiment of that boys' club, "cool kids" culture, but it was immortalized in paint on the wall of the Alamo South Lamar, the site commonly known as the Drafthouse mothership. During the 2014 remodel, artist Heyd Fontenot painted a mural in the lobby, featuring many of those same familiar faces. In the latest round of revelations, it turned out that one of those depicted was a customer who had been accused of sexual harassment against a Drafthouse employee years prior to the painting. Earlier this month, after the Splinter article ran, the entire mural was painted black, and framed film posters were hung to cover the space. But it takes much more than a few cans of primer to dismantle that culture of insiders and outsiders. Kelly White, chief executive officer of Austin-based anti-sexual- and domestic-violence nonprofit SAFE, said, "Just saying #MeToo is powerful ... but now we've got to move to solutions."

From #Metoo to WhatNext?

The first step for solutions was getting a real sense of how the Drafthouse truly operates. During the long listening tour, Drafthouse community director Averett would gather anonymous feedback to which League would respond in the room. After that, Chicago-based consulting firm Nextions made an impartial third-party assessment of operational practices. League called their report "very telling ... there is this culture of creativity and being the best, and always constantly improving, but then there is this parallel culture that lives within the organization of poor communication, and siloing of information, and potentially some nepotism."

After that, SAFE was brought in to help reassess and reshape the corporate culture, a service they have previously performed with both commercial and governmental bodies. White compared the Drafthouse to the "Go go me, success at any cost" ethos rampant in many firms, and most specifically another fast-growing company that had a wake-up call over the last year – Uber. "What a toxic culture of masculinity and privilege [and] I don't think that has ever been the case with the Drafthouse. ... They came from a place of compassion, and maybe needed to come a bit more from a place of believing, and holding people accountable. That's no different from a lot of places out there, except a lot of places don't come from a place of compassion. They only come from the bottom line."

The company's core structural problem, as White sees it, was not the intention but the lack of the tools, and the narrow perspective, that formed its business culture. As she put it, "You don't know what you don't know."

That meant a shift in perspective from the early days, which were focused on what Tim called "the customer experience." What's important now, he said, is "understanding that our staff is our most important customer. ... Creating a really incredible, positive environment for our employees is every bit as or more important than the customer experience." And that's where SAFE comes in.

One key element of their work has been running multi-hour, interactive training sessions with Drafthouse staff, but they are not about legal culpability. "That's for HR attorneys," White said. "It's not about the law; it's about the culture. It's about recognizing and responding to harassment and abuse, and changing reactions and response and culture." That means tackling the complex interpersonal side of management, such as knowing the lines between firm leadership and bullying, and between workplace-appropriate humor, reciprocated flirtation, and harassment. "It's not clear-cut," White said. "It's very much about perception of how it feels between people."

That extended to the Drafthouse's battered reputation. In January, Tim League was part of a panel on sexual harassment in the workplace at film industry conference Art House Convergence in Midway, Utah – one of his first public appearances since the initial allegations. One attendee later questioned how Drafthouse management, of all companies, could lecture people on good management practices. However, White took a more positive view of the work: "Good for Alamo Drafthouse and good for Tim League for absolutely, completely stepping up and saying, 'We've got to address organizational culture.' This isn't just something that we sweep under the carpet, and get the attorneys in and litigate out."

Tim League painted this as an opportunity to change culture and expectations – not just of how the Drafthouse operates, but what its employees can and should expect from any employer. He said, "We're in this synthesis of two industries, film and restaurants, that have some of the worst problems with sexual assault, sexual harassment, and the acceptance of it. Our goal, that we're training with our managers, is imagine that people, this is their first job, and people say, 'Oh, kitchens are just like that, restaurants are just like that.' Well, no, they don't have to be. It's an exciting wave that's happening, not just with us, but nationally."

One of the first and most high-profile examples of that change is the new Drafthouse code of conduct, launched last November. The firm has had protocols in place for dealing with issues between employees, but nothing strong or codified when it came to dealing with customers. White said, "When you're talking about harassment, it can be guest-to-guest, guest-to-employee. It's not exactly the norm of just a supervisor-supervisee situation."

The code was part of the feedback from Fantastic Fest attendees, finessed by feedback from staff, and rolled out in November at poster convention MondoCon. Such codes are commonplace at conferences and festivals, but the Drafthouse version covers not just special events, but every day, at every location. "It would have been so easy to slap up a sign and call it done," said Averett, but that was just the beginning of the process. Training methodology is being reassessed and restructured, shifting away from "hot pizza/cold beer" basics to more effective onboarding, and actual management training when staff are promoted. That way, Averett said, "If something does happen, we respond to it in the right way." Staff input has been institutionalized by installing Austin-based Workify's anonymous employee feedback system at all locations. The responses have varied, Averett said, "from 'Someone has to talk to my co-worker because he has really bad body odor' to 'I have a really serious concern about a situation,' but a lot of it is just input about working conditions, scheduling, or compensation."

The last few months also saw change in how decisions are made, and who makes them. In November, Fantastic Fest established a new board of directors: Its members were not picked by League, but by festival executive director Kristen Bell (who declined to be interviewed for this article). However, there were still traces of the old insider culture, as all board members were either current or former Drafthouse or Fantastic Fest employees, or longtime associates. League defended that decision, saying that it was "a bit of a triage" just to get through last year's festival. "[Bell] wanted people who knew the festival, and knew what's special and unique about it, and wanted to pitch in and make it better." The plan is to expand the membership eventually, with potential for more external voices. "We're not done with anything."

Similarly, League is not solely responsible for the chief people officer search, but is part of a four-person committee. That's a format that is being replicated companywide, with new committees at the executive and managerial level charged with specific issues such as construction and employee happiness. There's even a new staff advisory council. "If there's a decision that is going to affect the company," said League, "then we should discuss it with the stakeholders who will be affected before the decision is made."

As for League's nepotism concern, Aver­ett said, "I think the thing that must change is that we make opportunities much more transparent." Moreover, all these changes must continue once League and the leadership team move away from restructuring, and back to the daily job of running a theatre chain. If changes are institutionalized, she said, "When he does have to shift, and it rebalances out, that the work continues."

But that also entails rebalancing League's own job: to be less of an omnipresent decision maker, and more of a chief executive. Over the last six months, he said, "A big change has been stripping away the things that I allow myself to noodle and go deep on. Architecture, marketing, design, I just don't do them." Yet he remained optimistic that, whatever the changes in direction, the core mission of the Drafthouse will not really change. He said, "We always debate between 'always improving' and 'never satisfied' .... As tough as these last six months have been, it does help us put the rudder in the water and understand areas where we can improve and aim to be great."

Editor's note: an earlier version of this story misidentified the former Southwest executive with whom League met. The Chronicle regrets the error.