Since Ryan Kavanaugh founded Relativity Media in 2004, the risk-taking CEO has made unconventional moves both admired and questioned in Hollywood, building his production company into a fully realized studio with a slate to rival the majors.
Now, with a fresh round of funding in hand, Relativity is positioned to take its place among them.
Along the way, Kavanaugh also has become an essential member of the Hollywood financing ecosystem, considering that Relativity funds half the slates of Columbia and Universal, and has pieces of projects all over town.
Last week’s news that New York-based hedge fund Elliott Associates put up enough equity to trigger a larger bank facility in the several hundred million dollar range allows Kavanaugh to take the biggest shots of his career. To wit, not only did Tarsem Singh’s sword-and-sandals epic “Immortals” come in at $100 million, but Singh is about to embark on a $100 million production of “Snow White,” starring Julia Roberts.
Between the nine to 10 movies Relativity plans to make a year and its burgeoning acquisitions business, the studio plans to distribute at least 15 films annually, Kavanaugh told Variety, adding that the infusion of significant capital “allows us to be a competitive, full-fledged studio.” The mogul explained that given that “we have moved into the distribution business, doubled the size of our team, inked significant deals with Netflix, Technicolor and others, the infusion of capital will allow us to compete with the major studios.”
Relativity began its transformation by taking over the distribution and marketing operations of Overture Films last July, then in January hired former Paramount Home Entertainment exec Steve Bertram as chief operating officer and named ex-Universal exec Michael Joe as president.
Also last summer, Relativity inked the lucrative Netflix deal to digitally stream its slate, bypassing pay-TV channels like HBO, Showtime and Starz. That deal initially covered the 10-14 films that Relativity doesn’t co-finance, but terms were renegotiated to include co-productions, making for about 30 titles a year over the next five years.
Regardless of how Hollywood views Relativity’s business model, it’s going to want Kavanaugh and co. around — so long as he keeps having access to coin and is willing to spend it.
And for every Relativity box office disappointment like “Skyline” or “The Warrior’s Way,” there’s bound to be a surprise hit like “Zombieland,” simply due to the number of pictures it’s co-financing.
While Kavanaugh was denied a producer credit on Oscar-nommed “The Fighter,” his gamble paid off, as the modestly-budgeted boxing pic has grossed more than $90 million in the U.S. Kavanaugh is also exec producing Universal’s “Cowboys and Aliens.”The film has a good shot at box office success, though Relativity’s formula covers much of the risk with foreign presales.
Relativity distributed Nicolas Cage-starrer “Season of the Witch” earlier this year, and while the genre film grossed a disappointing $24 million Stateside, it performed well overseas and has now grossed more than $71 million worldwide. Studio opened the ’80s-set comedy “Take Me Home Tonight” this weekend, and has the Bradley Cooper-Robert De Niro thriller “Limitless” coming out March 18.
Down the road, Relativity has high hopes for “Immortals,” which stars Mickey Rourke and Henry Cavill, who director Zack Snyder recently cast as Superman. Studio also is developing a sequel to 2008’s sleeper hit “The Strangers,” as well as a reboot of “The Crow” franchise.