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Relativity Media Logo [1]<\/a><\/p><\/div>\n OVERVIEW:<\/b><\/p>\n Founded in 2004 by venture-capitalist and movie enthusiast, Ryan Kavanaugh<\/a>, Relativity Media<\/a> has and continues to produce, distribute, and structure financing for more than 200 films through their Relativity Studios division. These films have successfully accumulated more than $17 billion of revenue in the worldwide box office and generated over 60 Academy Award nominations [2]<\/a>. Upon its inception, Relativity Media was widely praised for reimagining the Hollywood landscape in their buying of \u201ctextured, mid-budget films\u2026 To bankers, Kavanaugh appeared to have cracked the code, having come up with a way to forecast a famously unpredictable business by replacing the vagaries of intuition with the certainties of math\u201d [3]<\/a>.<\/p>\n KEY EXECUTIVES:<\/strong><\/p>\n RYAN KAVANAUGH, Chief Executive Officer [4]<\/a><\/p><\/div> RAMON WILSON, Interim President [4]<\/a><\/p><\/div> CAROL GENIS, Managing Director [4]<\/a><\/p><\/div><\/p>\n FINANCIALS & RESTRUCTURING:<\/strong><\/p>\n After six years of financing and distributing high-profile films for major film studios like Sony Pictures Entertainment<\/a> and Universal Pictures<\/a>, Relativity Media began making and distributing\u00a0their own movies in 2010 with their first original film, Season of The Witch\u00a0<\/em><\/a>(2010). Many industry professionals predicted the company\u2019s downfall after witnessing Kavanaugh\u2019s proven history of financial irresponsibility [5]<\/a>. Yet Relativity persevered, dealing out successful high-grossing films like Immortals<\/a><\/i> (2011 – $83.5 million),\u00a0Limitless<\/a><\/span>\u00a0<\/i>(2011 – $79.3 million), and Safe Haven<\/a>\u00a0<\/i>(2013 – $71.3 million) [6]<\/a>. Ryan Kavanaugh\u2019s algorithmic, low-risk business model finally proved to be successful. With over $560 million of assets by the summer of 2015, Relativity seemed relatively untouchable.\u00a0Yet when an outstanding $330 million in debt to various lenders came due in July of the same year (not to mention the $1.8 billion of debt due in the following years), Relativity was forced to file for Chapter 11 bankruptcy protection on July 30th in New York State Bankruptcy Court [5]<\/a>.<\/p>\n Relativity’s Ryan Kavanaugh Breaks Silence, Points Fingers in Emotional Post-Bankruptcy Interview [5]<\/a><\/p><\/div>With this major speed bump\u00a0in Kavanaugh’s plan for the future of Relativity Media, the production company came out of the 2015 fiscal year on a surprisingly high note: ranking 12th amongst all other production companies in total market share with 0.6%, and grossing $74.2 million on four\u00a0movie releases (making them the third largest mini-major production company) [7]<\/a>.\u00a0Similarly, things began to look up for Relativity Media at the start of this Spring when\u00a0United States Bankruptcy Judge Michael Wiles confirmed a reorganization plan for Relativity on February 8th, 2016. With an offer from\u00a0Trigger Street Productions<\/a>‘ notable industry\u00a0moguls Kevin Spacey<\/a> and Dana Brunetti<\/a>, Relativity was set to have their debt reduced by over $630 million [8]<\/a>. Although\u00a0the deal included Relativity losing\u00a0their television, fashion, and sports agency divisions to various lenders as a partial settlement for their egregious debt, the film division, Relativity Studios,\u00a0was\u00a0granted approval to release their upcoming films\u00a0Masterminds<\/a><\/em>,\u00a0The Disappointments Room<\/a><\/em>,\u00a0Before I Wake<\/a><\/em>,\u00a0Kidnap<\/a><\/em>, and The\u00a0Strangers 2<\/a>\u00a0<\/em>upon successful completion of the deal. Just one month after the negotiation was proposed on the other hand, Spacey\u00a0backed out, citing his busy acting schedule as an excuse for his inability to serve as Relativity Studio’s new chairman\u00a0[9]<\/a>[10]<\/a>. Brunetti\u00a0did remain on board, however, and now serves as the studio’s President of Production in both film and television operations\u00a0[11]<\/a>. After multiple other financial dealings fell through including the unsuccessful Trigger Street negotiation, Relativity entered bankruptcy court once again on March 19th, now with only $16 million of financial help from various capital groups, as opposed to the\u00a0$100 million Kavanaugh had pledged upon filing Chapter 11 [10]<\/a>.<\/p>\n Image from The Wrap’s “Ryan Kavanaugh\u2019s Relativity Media Declares Chapter 11 Bankruptcy” [13]<\/a><\/p><\/div>On top of Relativity’s\u00a0fruitless financial dealings, news broke\u00a0of\u00a0Relativity Media’s apparent ‘Ponzi Scheme’ in late March. According to Variety magazine’s online article, “The New York investment firm\u00a0Colbeck Capital\u00a0aided and abetted\u00a0Relativity Media\u2019s fraudulent acquisition of a crucial film-release loan \u2014 money that was misspent on corporate expenses and to support the high-flying lifestyle of Relativity founder\u00a0Ryan Kavanaugh” [9]<\/a>. This claim by RKA Film Financing seeks over $110 million in damages, and has the potential to put Relativity further in debt if\u00a0found guilty [9]<\/a>.<\/p>\n Amongst Relativity Media and Kavanaugh’s slew of shortcomings and failures to fulfill many of its early bankruptcy pledges, Judge Michael Wiles shockingly granted Relativity Media approval to exit bankruptcy\u00a0status after many negotiations and a successful $400 million refinancing plan with UK investment firm, Maple Leaf Films<\/a> (of Maple Leaf Capital Group) [12]<\/a>. While the investment company has an oddly shady past and limited credits in the film industry, Maple Leaf Films proved to be a significant life saver for the drowning Relativity Media. In the meantime, as they begin the post-bankruptcy reorganization phase, Relativity must face RKA Film Financing and FTI Consulting<\/a> in court. In the coming months, Relativity will attempt to resolve RKA’s ‘Ponzi Scheme’ claim against the company, and FTI’s fee dispute that began in the summer of 2015 and could cost Relativity an added $4 million of debt [9]<\/a>.<\/p>\n PROJECTION\u00a0& CONCLUSION:<\/strong><\/p>\n Upon Relativity Media’s ultimate emergence from bankruptcy, Ryan Kavanaugh and his newly diminished team of industry professionals will continue in their attempt to regain the reputation that was lost in the summer of 2015. With the help of Maple Leaf Films’ convenient endorsement and Judge Wiles’ thoughtful compassion in bankruptcy court, Relativity looks to rebound with its upcoming films\u00a0Masterminds <\/em>(which was postponed from its original 2015 release),\u00a0The Disappointments Room<\/em>,\u00a0Before I Wake<\/em>,\u00a0Kidnap<\/em>, and\u00a0Strangers 2. <\/em>After a full year without a release, Relativity needs a break.\u00a0While these upcoming releases do not necessarily ensure\u00a0a future of success for Relativity, the big-named high-profile comedy,\u00a0Masterminds<\/em>, looks to be the company’s one saving grace. With Kristen Wiig, Zach Galifianakis, Owen Wilson, and Jason Sudeikis as the headlining cast, the 2016 comedy earned a 96% in the “Want to See” category on Rotten Tomatoes\u00a0[14]<\/a>. While it falls under the throw away genre of stupid comedies, it is likely to make Relativity some much needed cash. Check out the trailer below.<\/p>\nRELATIVITY MEDIA<\/strong><\/h6>\n
9242 Beverly Blvd #300, Beverly Hills, CA<\/strong><\/h6>\n
http:\/\/relativitymedia.com<\/a><\/h6>\n
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