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RelativityReal Blossoms With Stable of Unscripted Cable Shows

Division's focus turns to retaining rights, small-screen adaptations of features

Producers Tom Forman and Ryan Kavanaugh have created a monster.

RelativityReal, the television arm of Relativity Media, has grown since its launch in 2008 to a bustling outfit that’s home to more than 20 unscripted series in production that run the gamut from MTV’s “Catfish” to Showtime’s “Gigolos” (pictured above) to GSN’s “The American Bible Challenge.”

(From the pages of the April 9 issue of Variety.)

RelativityReal’s Hollywood office hums with production and development activity under the direction of Forman, a veteran news and reality producer. When he joined forces with Kavanaugh in June 2008 as an equity partner in Relativity-Real, Forman told Variety that he saw the deal as nothing less than “a monster investment in a major new company that’s poised to reinvent unscripted television.”

Today, Forman describes the size of his current developmentand production slate as “overwhelming,” but his ambition hasn’t dimmed.

See Also: Debt of a Salesman: Pressure’s on for Relativity to Grow

Now that the company has volume, Forman is focused on finding creative ways to help RelativityReal and other producers hang on to format and international rights to its shows — the keys to making real money in the low-margin unscripted production world. There’s talk of moving strategically into select scripted projects, and the company has even kicked the tires on a channel acquisition or two. The company is also working on deals with outside partners to finance series adaptations of Relativity pics including “Limitless,” “Haywire” and “Act of Valor.”

“It’s an excellent time to be in the content biz,” Forman said. “We retain formats on about a quarter of our shows, and retain some meaningful level of participation on about 50%. Networks are loath to give up rights — they’re valuable — so in a fee-based business, you have to sell more. We will always continue to do that. But the way I sleep at night and the way to make more money without making more hours of TV is to hang on to rights.”

2012 was a big year for the company, with the success “Catfish” — the MTV adaptation of the 2010 docu, distribbed by Relativity Media’s Rogue unit, about Internet relationships gone awry due to misrepresentation by one of the parties. The series got a boost through media observations of its similarity to the real-life scandal involving college football player Manti Te’o (which has turned “catfishing” into a verb). The show is in production on its second season. It offers a raw, documentary-like aesthetic that stands out amid glossy competition and celeb-driven series.

On the other end of the spectrum, RelativityReal fielded a much-needed hit for GSN in gameshow “American Bible Challenge.” “The Great Food Truck Race” was also a draw in its third season on Food Network.

But “Catfish” is the biggest catch, because RelativityReal sees opportunity in international sales of the format rights, which it shares along with MTV.

“’Catfish’ taps into something not only going on in the U.S., but around the world. One of the reasons people would license the ‘Catfish’ format as opposed to (trying) their own take is that we have racked the code on how to make the show,” Forman said of the “Catfish” lensing strategy, which includes extensive research on participants beforehand as well as psychological counseling.

The risk management on “Catfish” runs so deep that RelativityReal has even spiked an episode of the show, cutting the count for the show’s first season from 13 to 12 after a participant backed out at the last minute. It was a financial hit to the production, but sensitivity toward those involved, according to Forman, is top priority.

In order to move the needle more to rights retention, Forman is eyeing new sources of financing, including a prospective $15 million-$20 million fund that taps into Relativity Media’s pool of capital and investors.

“You can walk those private equity guys through the rights we’ve left on the table at RelativityReal and say, ‘Look, for 30% of the budget, look what we could have retained,’ ” Forman said. “You’re saying to them, ‘I don’t need your money for development — you’re not paying for pilots or sizzle reels.’ At the point when I’m at a network in a negotiation deal, (it’s), ‘How do you feel about taking 30% of the slate?’ When you begin to model out shows like “Catfish,” some that are lower budget so that 20%-30% isn’t a daunting number, that’s a very appealing bargain for them. For a small percentage of a reality budget, we’ll be glad we owned this.”

RelativityReal is bringing a similar strategy to its push into scripted program development, where the shingle has overall deals in place with production companies including This Is Just a Test and Bogner Entertainment.

“We’re trying every (financial) model on for size,” Forman said, including having Relativity Media foot the bill on certain projects.

“We will never be in the 22-episode-a-year deficit finance, network hospital drama business,” Forman said in regards to RelativityReal’s scripted efforts. “But short-run cable stuff, event miniseries or one-offs that Relativity Media can model as if they were a movie may work. … As we look at things that are six-episode orders, eight-episode orders that guys like History and Discovery and A&E are ordering now, that’s appealing to us because it’s a predictable investment — it has a beginning and an end.”

RelativityReal has its eye on a bigger prize than merely rights deals as it heads toward summer. The shingle is serious about wanting to acquire a cable network, though Forman admitted there are few for sale now.

RelativityReal took a look at Current TV, which went for a whopping $500 million to Al Jazeera in January, and the TV Guide Network, which is off the block now that Lionsgate has struck a deal with CBS.

With all the activity at the company, Forman is mindful of the importance of focusing on the core biz of developing compelling unscripted fare. The idea for “Bible Challenge” came to RelativityReal from GSN. Forman hesitated at first until he brainstormed the right approach.

“I wondered, ‘Can it be funny?’ ” Forman recalled. “I remember making up a category during a phone call that made it all the way on air: ‘Genesis or Genesis’? Where I’m going to read you a line and you tell me if it’s from the Bible or a Phil Collins lyric? I think the convergence of religion and pop culture is interesting.”

Like many producers in the genre, Forman has concerns about the trend among some docureality shows to feature a more polished — some say staged — presentation.

While Forman knows that he, to a certain extent, shouldn’t be one to judge given that uber-produced “Gigolos” resides in his wheelhouse, the chief nevertheless sees the importance of “real” within “reality,” and said that “Gigolos” isn’t anywhere near the level of “Duck Dynasty” or “Amish Mafia” when it comes to being manipulated.

“This is the year where we find out if anyone cares if (reality TV is) real,” he said. “Ultimately, I’m not sure if the super-fake reality shows are good for the genre. One of the reasons this work is great is because it’s real people in extraordinary situations.”

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