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Ron Burkle Talks Ryan Kavanaugh And Harvey Weinstein To The New Yorker

Ron Burkle remains a mystery to Hollywood. The supermarket tycoon turned private equity funds manager has sat down with The New Yorker‘s Connie Bruck for a not-very-flattering long profile. It makes clear he has no over-arching strategy for his entertainment investments at present –  except to avoid bidding wars. (“Burkle seemed to feel that as long as he was approaching movies as a hobby he could enjoy the dividend  of glamour without violating his proscription against the business.”) But there is intel about his financial dealings with Harvey Weinstein and Ryan Kavanaugh. (“Burkle said that he particularly likes investing in people who have encountered adversity, because he believes they often come back stronger.”) For instance, the article says Burkle received all of Relativity as collateral for his most recent investment of a “couple of hundred of millions of dollars” – and that Burkle, not Kavanaugh, is now calling the shots at Relativity. It also speculates in the future Kavanaugh goes out and Weinstein comes in:

In the past seven years, Kavanaugh has proved adept at structuring deals where investors have done poorly while he and Relativity prospered. And last winter, when Kavanaugh’s luck finally seemed to have run out, Burkle rescued his company … Relativity’s first big-budget epic, “Immortals,” was set to open in early November, and, less than two weeks beforehand, Elliott reportedly threatened to reduce its investment unless Kavanaugh agreed to dramatic concessions. At this moment, Burkle appeared,

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UPDATE: Elliott Claims Only “Single Digit” Investment Left In Relativity After Takes Back Kavanaugh’s Film Fund With Universal

By | Wednesday June 1, 2011 @ 11:23pm PDT

3RD UPDATE: Despite what Ryan Kavanaugh claims, Elliott Associates is making clear to me that today’s developments were another involuntary move foisted upon Relativity because of the mess it’s in. Just as I and my sources suspected, “To clarify the additional investment, it is a single digit investment. Very single digit. The vast majority of Elliott’s investment in Relativity Media was Beverly 2. That has been taken back. Elliott wanted to have more control over the Beverly 2 money, which comprises 3/4s of their investment in Relativity. The Elliott money left in Relativity is very minor.” In addition, Elliott tells me that, despite what today’s press release says, ”Michael Joe’s hiring was Elliott’s decision. Elliott did a search and interviewed candidates. Elliott wanted Michael Joe and told Ryan he was being hired. Elliott made the decision, but Ryan had to release him from his non-compete. The wording below was negotiated.” 

2ND UPDATE, More Details Throughout: By Ryan Kavanaugh’s own admission to me just now, Universal Pictures has been “bitching and moaning” about Relativity Media’s recent decisions to date several pictures opposite Universal’s. So Ron Meyer and Adam Fogelson have accused Relativity, which has its own distribution arm, of using its film fund Beverly 2 with Universal to gain a competitive advantage over the major. The result is that Elliott Associates has been called in to rescue Kavanaugh once again — this … Read More »

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Relativity Receives More Hedge Fund Financing

EXCLUSIVE: I’ve just heard that Ryan Kavanaugh’s Relativity Media has closed a new round of financing with its longtime financial backer, New York-based hedge fund Elliott Associates. The amount is “in the $100s millions” which, according to my source, “is substantial enough to allow Relativity to close pending transactions which ensures that the company can produce, finance, and market enough films to make it competitive with, if not more so, than any major studio”. Ryan Kavanaugh confirmed my scoop and just told me, “We doubled in size and went from a production company to a studio. We have more capital needs.” Meanwhile, Elliott is proving the most patient of financiers.

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OSCAR MOGULS: Ryan Kavanaugh Q&A

The Deadline Team of Nikki Finke, Pete Hammond, and Mike Fleming have spent recent days interviewing the studio moguls to gauge their perspective on this very close Oscar race:

RELATIVITY
7 Nominations: 7 The Fighter

DEADLINE’s Nikki Finke: How did you first get involved with The Fighter?
RYAN KAVANAUGH: Mark Wahlberg brought us the project. It was developed at Paramount by David Hoberman and Todd Lieberman and they put Mark on the project. Everybody knows there were a lot of starts and stops. When Paramount told them, ‘We’re not making the movie,’ Mark called us because we had a prior relationship with him. Effectively, the script that Paramount had developed was very dark. So we said to Mark, ‘Look, it can be a modern-day Rocky. The good news is we love the story. The bad news is we need to pay someone to rewrite it.’ Mark and David O. Russell had worked together on Three Kings and we had actually met with David a few times on other movies. So we brought David in and in a very short period we had a shooting schedule. He was not contractually given any writing credit. It went to Scott Silver. But at the end of the day David was really responsible for 90 percent of the rewrite. The budget was $50 million, and we gave him a budget of $25 million. Then, we shot the movie in 33 days. And here we … Read More »

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