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LOS ANGELES, CA, OCTOBER 22, 2009 - Relativity Media, LLC (RML) announced today Beverly Blvd 2 LLC (Beverly 2), a wholly owned subsidiary of RML has entered into a senior secured revolving credit facility that provides for up to a total commitment amount of $300 Million (the “Facility”). Comerica Bank and Union Bank, N.A., jointly arranged the transaction.
Relativity plans to use amounts available under the Facility to fund pictures in its co-financing/co-production deal with Universal Pictures. In addition, Relativity will continue to maintain a significant equity investment (and own 100% of the equity) in Beverly 2, which will be used alongside the new Facility to fund new films which are part of the deal between Relativity and Universal.
Relativity, has an existing partnership with Universal Pictures where it is co-financing approximately 75 percent of Universal’s slate through 2015. Relativity and Universal have been partners for over four years.
Ryan Kavanaugh, CEO of Relativity Media, said of the financing, “We are very happy to continue to build our relationship with Comerica Bank and Union Bank, which has resulted in significant business over the past severalyears. They have been great partners, and continued to be through the course of this transaction. We are looking forward to a strong continued relationship.”
Jesse A. Cohn, portfolio manager at Elliott Management, a large Relativity Media shareholder added, “We are very pleased that Relativity was able to further optimize its capital structure by closing this Facility. As a successful, growing business, Relativity knows how to best deploy its capital and we are very supportive of their growth and well-established partnership.”
The deal was negotiated by Andrew Marcus (Chief Operating Officer), Ramon Wilson (EVP of Business Development) and Greg Shamo (EVP of Corporate Affairs) on behalf of Relativity, Jared Underwood, Senior Vice President, on behalf of Comerica Bank, and Senior Vice President Bryan LaCour and Vice President Brian Stearns on behalf of Union Bank.
HOW DOES RYAN DO IT? Kavanaugh Announces $300M Revolving Credit For Another Round Of Relativity/Universal Pics
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Wow! This guy will singlehandedly save Hollywood!!!
Love You, Ryan!
It’s going to take more than borrowed money to save Hollywood.
Well…………
1 he has successfully produced and released over 50 A list films over the last 5 years ?
2
he burned mob connected film producers 8 years ago through his hedge fund and they, after meeting his dad decided to give him a break, and then got them paid back through his film fund ?
3
his dad is a weight lifter with 40 inch biceps and he can squeeze your neck till your eyes pop out unless you say yes “YES !!!!”
4
he has a masters from ivy league school and he is a extremely fast pitchman and so in the middle of the pitch you are ready to do the deal just so your headaches goes away ?
5
he is a all around good guy ? and a very nice guy that never loses his temper……..
what could the reason be ?????
How… when most of their movies contain a profound amount of suckage…
For the time being, he’s one of the most consistent money-makers in town (”21,” “I Now Pronounce You Chuck & Larry,” “Talladega Nights,” “The Kingdom,” etc.) and he’s willing to gamble with his own money on movies others wouldn’t (”Charlie Wilson’s War,” “The Bank Job,” “All the King’s Men,” etc.). He’s had some big losers like “Land of the Lost,” but then because he took a chance on something like “Zombieland” when no one else would, he wins anyway.
Then there’s stuff like “Death Race,” “The International” and “The Perfect Getaway” – straight B-movies that are just a little better than they should be that end up killing all over the world.
In a word, shrewd.
“gamble with his own money”?!?
You completely mis-understand what is going on here. Mr. Kavanaugh personally is as at risk of performance as a producer getting a fee + participations, which is to say not at all. Mr. Kavanaugh is an agent drawing a salary and fees with updside but not real risk. All the $ here comes from deeper and more removed pockets that are convinced of this salesman’s pitch.
More crafty/wily than shrewd.
So Land of the Lost’s bridge financing through JP Morgan was X and Uni was X and so really we lost nothing, please learn your facts before posting.
Thanks
Bridge financing from JPM? What are you talking about? Uni is part of a massive corporate conglomerate — they’re not getting any “bridge” financing on any single pictures…
Actually as I parse your statement, I really have no idea what you are trying to say.
former agent, you’re wrong on just about all of those, so i guess we’re still looking for the answer…
I’m waiting for the day he realizes he doesn’t need Universal at all. Or any studio for that matter.
Teddy, at the state Universal is in right now, having a co-financier right now is a godsend when they were singlehandedly beaten this past summer by Paramount and Warners. The 75% deal from now till 2015 is a good deal for Universal, and probably on par with Legendary Pictures’ deal with Warner Brothers.
But some of Relativity Media’s output isn’t that bad, like “9″, “Zombieland” and “State of Play.” I’m surprised Sony hasn’t amped up its deal with Relativity as a result.
Don’t be fooled by this. None of this money is for Relativity. It all goes back to the hedge fund who backed the Universal deal. That fund had hundreds of millions of dollars invested in Uni films with no debt to offset their equity. This is the debt for that. Relativity won’t be able to access any of this for his films. This is yet another piece of spin from a great spin master. This guy will definitely not be saving Hollywood.
Wow, really? This is news? It’s just an ultimates facility loan. Who gives a crap? Besides the hedgefund that backs those guys was probably freaking out over the piss poor performance this past year at Universal. It’s not like Relativity has anything to do with the films, it’s all the studio. They arrive fully packaged and ready to be greenlit, with or without Relativity’s financing commitment.
Beverly 2 isn’t fundamentally different than the Melrose funds at Paramount, the Dune funds at Fox, the Kingdom funds at Disney, and so on and so on… The difference is Relativity takes a logo and a credit whenever they can, since they’re the middle men.
Biggest question no one is asking: why do the major slate financing Hollywood banks avoid Relativity like the plague? What’s in the closet that causes them reputational concerns?
Matt, that’s awesome that Universal was “singlehandedly beaten this past summer by Paramount and Warners.”
Alright, once again its unfortunately obvious that 99.9% of people in Hollywood are clueless about structured film finance and all this is really PR fluff. So here’s a painful reality check for everyone who is getting excited thinking this deal gives them more cash to spend on films and protects investors or Elliott
1. Kavanaugh does not have a college degree (but neither do so what do I know)
2. Kavanaugh lost tens of millions in bad VC deals but probably is genius salesman
3. No such thing as 40 inch biceps–maybe 23-24 inches tops but that involves massive amounts of testosterone cypionate, nandrolone decanoate, Andarol, methyltest, Halotestin, Anavar, Dianabol, and GH
4. A $300 million credit facility means nothing and if its used on films before Elliot’s money is, its in first position to be paid back, and then Elliott. meaning
(i)A movie costs $50 million
(ii) Relativity put ups $30 million in cash
(iii) bank puts up $20 million in debt
(iv) P/A is $40 million via studio
(v)Movie makes $200 million in box office
(vi) Theaters take 50%
(vii)Movie is now $100 million in profits
(Viii) P/A/ gets paid back first–$40 million
(Ix)Studio takes cut lets say 20%–now we are at $40 million
(x) Minus Bank debt (30 million)
(Xi) Now we are at $20 million (meaning Elliot Associates already lost $10 million)
Now this formula is not absolute and usually worse than I portray it
5. Anyone who says Kavanaugh is saving Hollywood is a fatherless, weak, uneducated liberal star f***ker. No one can save Hollywood with money. Hollywood can only save itself with the kind of content it produces–which we all know is heading for implosion
And actually Tom Tull has a MUCH better business model and structure that Kavanaugh
Wow, since you are so smart maybe you should start co-financing movies with the studios…
Coming from somebody who can’t get a cartoon made….
Ryan’s house of cards is going to collapse soon…just watch.
Remember Madoff? Not quite the same thing but a little too similar. He’s already depleted 2 1/2 funds and soon people are going to come calling.
Ryan has always been one of those guys at the right place at the right time. Studios need $$$. Any of U can make a killing if U can raise the 300M – 1B that Ryan has. And why not? He deserves his 5% on these deals. I remember meeting some Wall Street types years ago who asked, “what’s the best way into Hwood?” I said, “get 20M and pay a Jim Carey (who was making 20M a pic then) and U can set up a pic anywhere U want.” It’s the same here – find the $ and U can do anything. The difference with Ryan is that he can still GET $$$ at this strange credit juncture while others cannot.
Oh is that so?
How do u really know that Jim?
Hummmm do u know something we don’t?
Jim and Drogo are the only ones who have this right. This is not a substantial amount of
new money to make new films. Relativity has done many things right. But it is not single-handedly lifting Hollywood out of the doldrums.
Here’s hoping Kavanaugh’s loan was contingent upon never again financing a Jennifer Aniston-related bomb. I’m still shaking my head over the dud that is Love Happens. Who the hell thought that was gonna be a moneymaker? Here’s hoping they got fired.
House of cards definitely coming down. Curtain will be pulled back and certain people will be in a lot of trouble. Don’t be anywhere near that place when it happens.
Ponzi scheme will definitely collapse in on itself soon. Ultimates loans and $1MM/film in “financing fees” can only take you so far.
So the sleazy Ryan Kavanaugh gets in bed with 3 of the sleaziest bankers/banks around: Brian LaCour/Brian Stearns from Union Bank and Jared (Franchise Pictures) Underwood from Comerica – must be quite a vaseline fest under those dirty sheets…
The Uni deal with Elliott is well underway, so there are now ultimates that can be pledged to an asset-based lender like Comerica, who doesn’t take performance risk. Comerica is not Wall Street; they are a Main Street asset based lender. The facility is not for a new round of films with Uni; it’s to leverage an existing set of assets and an equity commitment. In other words, it’s balance sheet management to get the most return on equity. Is it an accomplishment by Ryan? Sure it is, along with the rest of what he’s been able to do while others flamed out in the space because hedge funds lost interest in film. Is it Big News? Hardly. Let’s see a new studio slate deal underwritten by a Wall Street dealer (and syndicated to hedge funds) in the fashion of the deals announced in, say, 2005 and 2006. That would be news…news that will be a long time in coming, if at all. As long as Elliott stays at Ryan’s table, he will be a major factor. If they leave, what happens next will be anyone’s guess, as predictions of Ryan’s impending collapse have been just plain wrong.
Someone I know took less money and sold their script elsewhere. There’s a reason.
I knew Ryan in high school and early college (we lost touch about 1994). He is a very smart, charming, fast talking CON MAN! Narcissitic to the bone– grandiose, liar, thinks he is “above the law”, he makes “friends” only to use them and get soemething from them, etc. We used to say this guy could sell ice to an Eskimo– he really could, he has a strong gift of gab and can talk in circles — looking you straight in the face and convincing you that the sky is not blue. Seriously, he is very cunning, very smart, SUPER smooth and thus . . . . VERY dangerous. Anyone who trusts this guy is a sucker and I have no doubt the house of cards will fall.