Relativity Media Logo

Relativity Media Logo


Relativity Studios is the film branch of the multimedia company, Relativity Media LLC, or Relativity. The largest division of the company, Relativity Studios has produced, distributed, or financed more than 200 films, generating more than $17 billion in worldwide box office revenue and garnering 60 Oscar nominations [1]. Considered the largest min-major film studio, Relativity Studios has continued to feed founder Ryan Kavanaugh’s vision to take advantage of and help fix inefficiencies in the market. The studio is dedicated to churn revenue and it employs a series of risk-assessing algorithms to help filter out risky projects. Relativity has operated with the mentality that they have taken the risk out of the film industry and takes pride in their innovative approach to a conservative industry [2].


Founded by Ryan Kavanaugh in 2004, the company started as a middleman, setting up multi-picture deals with studios and then finding banks such as Citigroup and Merrill Lynch to sponsor them. By 2007, Kavanaugh had started developing a reputation of being a bit impractical with his methods and investors slowly started dropping out. However, Elliott Management stepped in and took a minor stake in the company providing the Relativity Studios access to around a billion dollars in credit [3]. With their own source of money, Relativity became more independent. After a notably successful period through 2009, Relativity Media has since struggled.Relativity’s financial debt accumulated and they spent most of 2015 pushing back loan payments and missing new deadlines. On July 30th, Relativity Media filed for Bankruptcy and since then has been faced with an uphill battle to keep the company running.


Ryan Kavanaugh Portrait at Relativity in Beverly Hills, CA on Wednesday, April 2, 2014 (Alex J. Berliner/ABImages)

Ryan Kavanaugh has been getting the company out of tricky situations since it’s beginning. After a string of box office flops, Relativity has found itself in a $1.2 billion debt and as of July 30th the solution has been Chapter 11 of the United States Bankruptcy Code. The bankrupcy excludes: Relativity Sports, Relativity EuropaCorp Distribution (RED) and Relativity Education [4]. Chapter 11 allows for Relativity to restructure itself in hopes of reaching a point to stand on its feet; however, all decisions must be approved by a judge. Before reconstruction began, Kavanaugh auctioned off Relativity in October in hopes to pay off the debt. A group of creditors called Stalking Horse Bidders first offered $250 million for the whole company; then later withdrew to only $125 million to take Relativity Television, the company’s most successful branch of operation [5][6]. shortly after, Kavanaugh lead a group of investors to make a deal that would allow him to take control of the studio and with time, pull the business out of bankruptcy [7].

External Conflict

Despite his ability to save Relativity again and again, a few have spoken out against Kavanaugh’s ability to run the company. Since September, Original Films’ Neil Moritz, who has been producing action thriller Hunter Killer with Relativity Media, has been speaking out against Relativity and Kavanaugh [8]. Moritz expressed his distaste due to Relativity’s willingness to fund the thriller with the knowledge of their plans to go bankrupt and misled parties involved of their true financial situation [9]. Moritz demanded that the struggling organization let go of the project and allowed for a more qualified company to produce. Moritz claimed in September and in November that the company is a “sham”, a “fraud”, and a “failure” and to all of his statements, Relativity responded that the allegations were “baseless and patently false” [10].

The feud escalated against Relativity after Hunter Killer’s star, Gerard Butler, threatened to drop from the production if Relativity continued to drag out the bankruptcy case [11]. The production team even said that Relativity needed to “depose” Kavanaugh immediately and liquidation was the best option for Relativity [12]. Kavanaugh responds that the claims are false and that the outsiders are trying to slander him and his company in its weak state [13]. The tension was finally eased when Relativity announced that they would sign Millennium Films to get the production rolling and take on the responsibility of distribution overseas while Relativity distributes domestically [14]. This deal is the first sign of Relativity managing their situation effectively and solving a very public conflict.

Internal Conflict

While they resolved their biggest conflict with outside companies, Relativity still faces obstacles within. Since declaring bankruptcy Relativity has lost several of his executives including Angela Courtin, Richard Potter, and even Tucker Tooley the president of Relativity Studios [15][16][17]. With many losses, the Relativity team faces hardship as Kavanaugh does everything possible to take the company out of Bankruptcy; in fact, it seems that two of the most impactful losses have been those that have gotten in the way of Kavanaugh’s efforts. The most recent update to Relativity’s bankruptcy has been the news that in their court documents, Relativity has accused two of its former executives, Matthew Alvarez and former CFO Andrew Matthews of “sabotaging the studio’s efforts to refinance debt” [18]. The two ex-executives now work for Colbeck Capital Management which was a senior lender for Relativity. Relativity filed in court documents that “Colbeck intentionally diverted” money away from their efforts to refinance [19]. While the claims might have validity, it is clear that Relativity’s CEO might be at a point where they find it necessary to point fingers.

Production still from the original "The Crow"

Production still from the original “The Crow”

Meanwhile, Relativity also struggles with other more personal obstacles as they proceed with their reboot of the comic book movie, The Crow.  The film has experienced some serious turbulence in pre-production including several actors that have fallen through to star in the film. Jack Huston was slated to star in the film but he dropped out back in June and no one has stepped in to replace him yet. However, both producer Edward Pressman and director Corin Hardy are insisting that the shooting will start in 2016 [20]. Relativity already has  invested so much money in the project, backing out does not seem plausible.

As part of of Relativity’s reorganization plan, there are seven film waiting to be distributed and several projects in the pipeline ready to produce. Before 2017, Relativity promised to release seven new films including Masterminds, starring Zach Galifianakis and Kristen Wiig and Kidnap, starring Halle Berry.  Both movies were set to release earlier this year but lost funding due to the bankruptcy. In addition to the finished films, Relativity claims to have over dozen films also ready to be made. Kavanaugh, despite having sold the TV unit,  intends to produce two scripted series a year based on their existing film and digital properties [22]. Although Relativity claims to have funds ready to start distributing the seven finished films and green light a few of the other projects, they have to wait until Judge Michael E. Wiles approves of Relativity’s reorganization plan.

While the company waits for approval of its reorganization, the future still seems uncertain. What is certain that the industry will be waiting to see how much longer Kavanaugh can pull it off.




  1. Relativity Media LLC. Retrieved November 23, 2015.
  2. Jones, Chris. November 19, 2015Ryan Kavanaugh Uses Math to Make Movies. December 1, 2009.
  3. Digiacomo, Frank. February 28, 2010. The Theory of Relativity. Retrieved December 1, 2015
  4. Relativity Media’s reorganization. Retrieved November 23, 2015.
  5. Lieberman, David. October 5, 2015. Relativity Tells Court It Will Have To Liquidate TV Unit If Sale Is Rejected.Retrieved November 26, 2015.
  6. Busch, Anita and Lieberman, David. October 3, 2015. Relativity Surprise: Stalking Horse To Pay $125M For TV Business. Retrieved November 26, 2015.
  7. Corrigan, Tom. October 22, 2015 Kavanaugh-Led Group Clinches Control of Relativity. Retrieved November 26, 2015.
  8. Kary, Tiffany and Sakoui Anousha. November 6, 2015. `Hunter Killer’ Movie Producer Calls Relativity Media a Sham. Retrieved November 23, 2015.
  9. Patten, Dominic. November, 05, 2015. Relativity Is A “Fraud” & “Failure”, Claims Neal Moritz; Wants ‘Hunter Killer’ Pic Back. Retrieved November 26, 2015.
  10. Patten, Dominic. November, 05, 2015. Relativity Is A “Fraud” & “Failure”, Claims Neal Moritz; Wants ‘Hunter Killer’ Pic Back. Retrieved November 23, 2015.
  11. Christie, Jim. NovemberProducer: ‘Hunter Killer’ film dead if Relativity Ch. 11 drags. Retrieved November 26, 2015.
  12. Gardner, Eriq. November 11, 2015. Relativity Bankruptcy: ‘Hunter Killer’ Producers Reach Deal. Retrieved November 23, 2015.
  13. Patten, Dominic. November, 05, 2015. Relativity Is A “Fraud” & “Failure”, Claims Neal Moritz; Wants ‘Hunter Killer’ Pic Back. Retrieved November 23, 2015.
  14. Lang, Brent. November 12, 2015. Relativity Resolves ‘Hunter Killer’ Legal Issues with Neal Moritz. Retrieved November 23, 2015.
  15. Andreeva, Nellie. July 31, 2015. Relativity Media’s Angela Courtin Named Fox Chief Marketing Officer. Retrieved December 1, 2015.
  16. Rainey, James. April 24, 2015. Relativity Studios Exec Richard Potter Leaves the Company. Retrieved Dec 1, 2015
  17. Busch, Anita. October 5, 2015. Tucker Tooley Leaving As Relativity President For “Creative Side” Of Business. Retrieved December 1, 2015.
  18. Rucinski, Tracy. November 25, 2015. Relativity Media accuses lender of prebankruptcy plot for control. Retrieved November 26, 2015.
  19. Rucinski, Tracy. November 25, 2015. Relativity Media accuses lender of prebankruptcy plot for control. Retrieved November 26, 2015.
  20. Chambers, Buddy. November 21, 2015.  ‘The Crow’ Remake Still Flies With Or Without A Star (Or Money To Pay One). Retrieved November 23, 2015.
  21. Lieberman, David and Patten, Dominic. November 18,2015. Relativity Promises 7-Film Slate In Bankruptcy Reorganization Plan – Update.
  22.  Lieberman, David and Patten, Dominic. November 18,2015. Relativity Promises 7-Film Slate In Bankruptcy Reorganization Plan – Update.

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