Solid money sources drive Relativity slate

Relativity Media doesn’t produce every Hollywood movie. It just appears that way.

Thanks to a massive slate deal with Sony and Universal, the company received producing credit on no fewer than eight summer pics: “You Don’t Mess With the Zohan,” “Wanted,” “Hancock,” “Hellboy II: The Golden Army,” “Mamma Mia!” “Step Brothers,” “The Mummy: Tomb of the Dragon Emperor” and “Pineapple Express.”

But who wants to sit back and merely write big checks when others are calling the production and marketing shots? Certainly not founder Ryan Kavanaugh, one of the leading Wall Street-Hollywood intermediaries. The 33-year-old Los Angeles native will continue to quietly co-finance a significant chunk of Sony and Uni’s slate for years to come, but he is also ramping up the output from his fledgling one-off picture business — a move that allows the moneyman to flex his creative muscles. A few months ago, Relativity secured $1 billion-plus from New York-based hedge fund Elliott Management, a company with $17 billion in assets, to finance its single-picture business, and is now poised to bring 10 films a year into the marketplace with an average budget of $55 million.

That puts Relativity on a pace to produce and/or finance 30-35 films a year — a staggering number given the prevailing Hollywood trend of trimming one’s yield. But Kavanaugh, who at the age of 21 started a venture capital company that raised millions but generated losses and lawsuits, tends to zig when Hollywood zags. While others in the film biz were rattled by recent news that Deutsche Bank was shuttering its film financing unit, Kavanaugh remains unfazed. An insider said Elliott roughly doubled its investment this past week — interesting timing considering the ominous Deutsche announcement and what that portends for Wall Street-backed film financing.

“We’ve never been as solid as we are right now,” explains Kavanaugh, who speaks with both the enthusiasm of an independent and the sense of a banker. “Our budgets range from $25 million to over $100 million; we’re in the business of commerce and thus don’t make arthouse films.”

Relativity is in an ideal position to fill the void created when New Line relinquished its status in February as a stand-alone studio. Even Kavanaugh’s critics credit him with making one particularly savvy move: In New Line’s wake, he scooped up a number of newly available output deals, described as five-year flex partnerships, for nearly every foreign territory. That allows Relativity — whose one-off credits include “3:10 to Yuma,” “The Forbidden Kingdom” and “The Bank Job” — to sell foreign rights and then distribute domestically for the upside.

“The larger independent foreign distributors are in need of product,” Kavanaugh says. “New Line’s folding into Warner Bros. left a large vacuum with the foreign distributors, whose business thrives on having a constant supply of commercial product. Fortunately, our business focuses on providing studio-quality product to the independent world, and therefore we helped to fill part of that void.”

Now, buoyed by even more Elliott coin, Relativity has as much cash on hand as the average studio and is moving ahead on an ambitious slate of films scheduled to go into production by year’s end. The projects include the Lasse Hallstrom-helmed Channing Tatum starrer “Dear John,” which starts lensing next month; Rob Marshall’s $80 million ensemble musical “Nine,” which the company is financing (shooting in October); and the Scarlett Johansson jewel thief vehicle “Brilliant” (also lensing in October).

With a 10-man creative team working under prexy Tucker Tooley, Relativity is also readying a Jackie Chan vehicle “The Spy Next Door” (October start date) and a Jet Li topliner “Rage and Fury.” Even more noteworthy is Relativity’s ability to attract A-list talent: The company recently wrapped the Jim Sheridan-helmed drama “Brothers,” which stars Jake Gyllenhaal, Tobey Maguire and Natalie Portman. Relativity also boasts a Ridley Scott-Leonardo DiCaprio teaming, “The Low Dweller”; and a Denzel Washington vehicle, “The Matarese Circle,” based on a Robert Ludlum novel. Both are slated to go into production early next year.

Still, Relativity has no dedicated domestic distributor, a sometimes harrowing prospect in an ever-crowded marketplace. But the company enjoys a nonexclusive distribution pact with MGM, an arrangement that bodes well for the product-starved Lion. It also gives Relativity the flexibility to release its product with whomever it chooses.

“We maintain very good relationships with many of the studios and will continue to distribute through rent-a-system deals with the majors as we have done with our past films,” Kavanaugh says. “We just go wherever the best deal is.”

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