New owners, new money and the old executive team — that’s the post-bankruptcy plan for the company formerly known as Relativity Television.
The acquisition of Relativity’s television assets by debtholders Anchorage Capital, Luxor Capital and Falcon Investment Advisors was finalized in bankruptcy court in New York on Tuesday. The still-unnamed new entity confirmed later in the day that Tom Forman has formally signed on to remain as CEO while Andrew Marcus shifts from managing director to president and chief operating officer.
The new company will get a $75 million influx of capital in the form of cash and lines of credit to help rev up its operations in scripted and unscripted production. The company will be governed by a five-member board of directors. An effort is under way to recruit TV industry veterans with experience in building companies.
Forman and Marcus also have equity stakes in the newly configured company. The new owners have assured the pair of their intent to make the new-model Relativity TV a long-term investment rather than a short-term flip.
“This is the best possible outcome in that we get to continue working with a team of people we know and trust, we get to make shows that we’re incredibly proud of and we’ve got a lot of wind in our sails from new owners,” Forman told Variety.
“We are going to be proudly independent — and not just of Relativity Media. In an increasingly consolidated media business it’s an exciting time to be an independent. We’re going to be appropriately capitalized for the first time and we’ll build off the firm foundation that we’ve established over the last seven years.”
Tuesday’s court session marked the end of a trying three months for the erstwhile Relativity Television team. The parent company, Relativity Media, filed for bankruptcy protection on July 30 after racking up nearly $1.2 billion in debt. The profitable television operation was mostly untouched in the process but still suffered from the stigma of what became a public comeuppance for Relativity Media founder Ryan Kavanaugh.
In the end, Relativity’s three largest debtholders, who were owed more than $360 million, agreed to take over the television assets valued at $125 million while Kavanaugh and a group of investors work out a deal to buy back the remaining pieces of Relativity Media.
Relativity Television was buoyed by the volume of series, mostly unscripted, that it turns out for Food Network, Cooking Channel, ABC Family, FYI, Oxygen and MTV. It just launched a promising new drama on CBS, “Limitless,” based on Relativity’s 2011 feature of the same name. During the bankruptcy process the television company maintained its production obligations and even managed to sell a few pilots.
With the fresh start, Forman and Marcus aim to expand the company’s roster of development deals with producers and extend its reach in international markets. Acquisitions are also a possibility.
“Now that capital should allow us to be opportunistic,” Marcus said. “We were able to grow by our bootstraps before without having any real capital to supercharge our growth.”
Forman and Marcus said they are in the process of setting new deals with company staffers. Relativity TV has about 24 full-time executives, not counting the production teams on its various shows. The company was founded as a joint venture of Forman and Relativity in 2008. About two years ago, Relativity bought out Forman’s stake. Relativity TV has been managed as a lean and mean operation, in contrast to its former parent company.
“There were times when as part of Relativity Media our unscripted TV business felt like the un-sexiest part of the company,” Forman said. “The truth is, TV is a growing business. It generates lots of predictable revenue. We’ve grown every year that we have been in business, and we have always been conscientious about managing our costs. We were not the company of helicopters and jets, because that’s how you have to be as an independent in 2015,” he said.
One silver lining to the bankruptcy process, Forman said, was that it forced them to scrutinize every aspect of their business. With deep-pocketed owners who will support the venture, “we finally have the ability to take a breath and build the company we want to run for the next five- to 10 years,” he said.
(Pictured: Tom Forman, Andrew Marcus)