The Roxy will close for two to three weeks for renovations, then reopen under new management offering the same film fare, said Tom Gavin, general manager of TLA Video, who will take over management of the theater with his partner, Jon Ralston.
Murray said that financial difficulties, stemming largely from problems with distributors, led to his decision to get out of the theater business.
"It was very wearing. We have small audiences and we were never a priority with the film companies. It was always a struggle," he said.
Murray began working in the alternative-film business in 1972 as a projectionist at the Theater of the Living Arts on South Street and was the manager when it closed in 1981.
Later that year, Murray and two other employees - Claire Brown and Alex Roberts - reopened the TLA. They bought the building a year later, and ran it as a cinema until 1987, when it was sold.
In January 1983, they took over the management of the Roxy, which had been operating as an alternative theater since the 1970s.
At the same time, the partners' video business has grown to three outlets: at Fourth and South Streets, on Germantown Avenue in Chestnut Hill and in another building in the 2000 block of Sansom Street, near the Roxy. TLA Video's sales have increased from $200,000 in 1985 to about $1.1 million last year.
Murray said TLA Video planned to close its second-floor store on Sansom Street and move to larger quarters at 15th and Locust Streets.
He also said that the Roxy owed payments to creditors but that the bills would be paid.
Gavin said the new operators planned to install new seats in the theater and make some other improvements.
He said he expected to have some of the same supply problems that Murray had.
"There were new films that were coming out last year that had some wonderful box offices like Batman, but not a lot of quality," Gavin said. ''We didn't show Batman. We show a different type of film."
Gavin said his strategy, in the face of a dearth of new films, was to repackage older films in series or festivals.
He also said that by staging festivals and special events, he hoped the Roxy could become a catalyst to a rebirth of the 2000 block of Sansom Street, which reigned as the center of Philadelphia's counterculture in the 1960s.
"I want to keep it as an art house and try to expand on what's been done in the past," he said. "The success or failure at this point depends upon our programming."
He said the Roxy might undertake joint ventures and promotions with TLA Video.
"With their growing video business, the demands on their time are such that they needed to make a choice," Gavin said. "But having grown up in the film business, it's been a very difficult one for them."
One constant at the Roxy is the theater building's owner, Max Raab, chairman of the board of the J.G. Hook clothing company, who took over operation of the theater when it was showing X-rated films in the early 1970s. He operated it himself for a while as the Academy Screening Room.
"I could have sold it many times over the years," Raab said, "But you have to love film to understand. The place is really dear to my heart."