{"id":25468,"date":"2015-09-30T11:53:23","date_gmt":"2015-09-30T15:53:23","guid":{"rendered":"https:\/\/bejone03.expressions.syr.edu\/trf235\/?p=25468"},"modified":"2015-12-02T23:21:06","modified_gmt":"2015-12-03T04:21:06","slug":"relativity-1","status":"publish","type":"post","link":"https:\/\/bejone03.expressions.syr.edu\/trf235\/2015\/09\/30\/relativity-1\/","title":{"rendered":"Relativity"},"content":{"rendered":"
\"Relativity<\/a>

Relativity Media Logo<\/p><\/div>\n

Background<\/strong><\/p>\n

Relativity Studios<\/a> is the film branch of the multimedia company, Relativity Media LLC<\/a>, or Relativity. The largest division of the company, Relativity Studios has produced, distributed, or financed more than 200 films<\/a>, generating more than $17 billion in worldwide box office revenue and garnering 60 Oscar nominations [1]<\/a>. Considered the largest min-major film studio, Relativity Studios has continued to feed founder Ryan Kavanaugh\u2019s 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<\/b> to a conservative industry [2]<\/a>.<\/p>\n

History<\/strong><\/p>\n

Founded by Ryan Kavanaugh<\/a> in 2004, the company started as a middleman, setting up multi-picture deals with studios and then finding banks such as Citigroup<\/a> and Merrill Lynch <\/a>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 Managemen<\/a>t stepped in and took a minor stake in the company providing the Relativity Studios access to around a billion dollars in credit [3]<\/a>. With their own source of money, Relativity became more independent. After a notably successful period through 2009, Relativity Media has since struggled.Relativity\u2019s 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.<\/p>\n

Bankruptcy<\/strong><\/p>\n

\"\"<\/a>

Ryan Kavanaugh Portrait at Relativity in Beverly Hills, CA on Wednesday, April 2, 2014 (Alex J. Berliner\/ABImages)<\/p><\/div>\n

Ryan Kavanaugh has been getting the company out of tricky situations since it\u2019s 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<\/a> of the United States Bankruptcy Code. The bankrupcy excludes: Relativity Sports<\/a>, Relativity EuropaCorp Distribution<\/a> (RED) and Relativity Education<\/a> [4]<\/a>. 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\u2019s most successful branch of operation [5]<\/a>[6]<\/a>. 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]<\/a>.<\/p>\n

External Conflict<\/strong><\/p>\n

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<\/a>, who has been producing action thriller Hunter Killer<\/i> with Relativity Media, has been speaking out against Relativity and Kavanaugh [8]<\/a>. Moritz expressed his distaste due to Relativity\u2019s willingness to fund the thriller with the knowledge of their plans to go bankrupt and misled parties involved of their true financial situation [9]<\/a>. 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 \u201csham\u201d, a \u201cfraud\u201d, and a \u201cfailure\u201d and to all of his statements, Relativity responded that the allegations were \u201cbaseless and patently false\u201d [10]<\/a>.<\/p>\n