Ryan Kavanaugh‘s company is in late-stage discussions to sell the music information and download service to an undisclosed buyer for about $1M, I’m told. Relativity Digital is preparing to unload a collection of sites in the deal including artistdirect.com, musicandirect.net, ubl.com, ultimatemusic.com, and playlisted.com. The tiny price suggests how hard it’s been to stand out in a music market dominated by services including Apple’s iTunes, Pandora, and Spotify. Relativity bought ArtistDirect for well under $1M in January 2010, months after the music service delisted its stock. In its last annual report, ArtistDirect said it generated $12.1M in revenues in 2008 — but with nearly $48M in losses.
The sale comes amid other changes at Relativity Digital. On June 13, Randall Cox quietly left as president of the operation. He hasn’t been directly replaced; the unit is being overseen by the company’s new Chief Marketing Officer Angela Courtin. Relativity still intends to expand its presence in digital, a source at the company says. Earlier this year it offered about $1B in its privately held stock for online video power Maker Studios, which accepted a lower cash bid from Disney. It also made a run at multinetwork web video company Fullscreen.
If there is one thing Relativity Media head Ryan Kavanaugh likes, it’s making deals. He’s hammered out a joint venture with Bollywood film and TV network B4U that, the announcement says, will leverage their combined expertise, relationships and resources to create and distribute highly engaging long and short form entertainment and sports content in India, spanning film, television and digital. The plan calls for them to co-finance, co-produce and distribute Indian-language films and television shows and acquire projects in the U.S. and Indian markets; distribute third-party content in India and select Bollywood films in the U.S.; create and launch a new pay television channel in India focused on Hollywood content in both English and Hindi; launch “RelaTV” – a digital streaming technology platform to deliver compelling short- and longform content to Indian consumers; and co-produce a slate of Hollywood films including the Nicholas Sparks novel adaptation The Best Of Me. There is $100 million for co-productions, they said.
Now, the track record for cross-pollination between India and Hollywood has been sketchy so far. Reliance must still be scratching their heads after backing first-look deals with top acting and directing talent and getting nothing to show for it. They’ve fared better with DreamWorks, but that company has an uncertain future, as Steven Spielberg’s partner Stacey Snider negotiates her way to a top exec job at Fox. India’s UTV made forays with stars including Will Smith and Overbrook, and M. Night Shyamalan, but they didn’t lead to much, either.
On paper, the appeal into expansion in India is a no-brainer. There is rapid urbanization, multiplex growth and content is prized. “By 2020, India is set to become the world’s youngest country, and its citizens are adopting new technology platforms – from smartphones to smart TVs – at a dramatic rate,” Kavanaugh said. “This joint venture positions us well to deliver enthralling content across rapidly emerging distribution channels.” Read More »
Add Relativity CEO Ryan Kavanaugh to the chorus of industry heavyweights who owe a debt to Tom Sherak, who died this week. The film business basically shuts down part of today as they gather to pay tribute to the former AMPAS head.
Related: Hollywood Remembers Tom Sherak
An Open Letter from Ryan Kavanaugh, CEO of Relativity:
I first met Tom Sherak when I was a student at UCLA. Tom taught a course called “Distribution 101.” I was fortunate enough to not only have him as my teacher, but for him to become my mentor. That first class led to what would become a lifelong friendship and an incredible source of personal encouragement and strength for me. I always knew that no matter what the issue or how seemingly unsurmountable the problem, Tom would be there to guide me. I deeply mourn his loss, but more importantly, celebrate his life.
This is an incredible man. Tom strived to make the world better, and we should honor and remember him for his life changing contributions to industry, medicine and philanthropy.
In an industry where adversity is too often the norm and where new ideas are often fought with vigor, Tom was a consistent voice for positive change. He relished in the success of others — not for personal financial gain but for the love of being a great mentor and friend. Tom’s spirit will continue to live on through the many people he guided, helped and loved. His contributions are immeasurable.
Read More »
Relativity Media‘s Ryan Kavanaugh has aligned with e-sports enterprise Major League Gaming and joined its board of directors. I am not sure where all this sports e-stuff is going, but it certainly bolsters Kavanaugh’s credentials if, for instance, he was vying to become commissioner of your fantasy football league. Actually, Relativity Sports has become one of Kavanaugh’s biggest business, repping over 300 athletes and growing. This alliance, he hopes, will allow him to marry his sports and content creation businesses.
Relativity and Major League Gaming (MLG), the global leader in eSports, today announced a strategic content and marketing partnership across sports management, television, film and digital media. In addition, Ryan Kavanaugh, CEO of Relativity, has joined the MLG Board of Directors, working with the MLG executive team to further the company’s position as a mainstream media property and breakout sport of the future.
The collaboration will accelerate MLG’s growth, drive appointment viewing and further strengthen Relativity’s presence in the gaming space through MLG’s deep engagement with the elusive young male audience. The two companies will work together in a variety of ways including:
Read More »
Relativity Media founder and CEO Ryan Kavanaugh strode onto the main stage here at Mipcom today, providing a run-down of his business model versus the Hollywood studios’ “blockbuster or bust” mentality, declaring that Relativity’s just-announced Limitless TV series “could be one of the biggest shows that’s ever been”, and announcing his intention to build a digital TV Everywhere-style platform within the next 12 months.
Kavanaugh was in Cannes in support of Limitless and Act Of Valor, two new series based on the studio’s own films. Bradley Cooper is executive producing Limitless, which is part of Relativity’s expansion into scripted television. Kavanaugh said some very big stars were interested, adding “Who knows? (Cooper) may be in the first episode.” Relativity also just received a greenlight at National Geographic Channel for its first scripted series, drama Act Of Valor. The company’s unscripted portfolio already has 17 series currently on air including MTV hit Catfish, an offshoot from its documentary feature.
Related: Relativity Teams For Series Based On Film ‘Limitless’
Kavanaugh explained he had an “epiphany” about turning Relativity movies into TV shows after Catfish. Although the film was profitable, it was an underperformer by traditional measures. Yet, young people kept telling him how much they enjoyed it. “Based on what I was hearing, I went back to all of our underperformers” to look at their sell-thru, on demand and DVD numbers as well as the marketing and he realized that if a percentage of the films’ audience could be converted to TV, it would be a win. The same theory could be applied to films that had broader box office appeal, à la Limitless, he said. With 20 million-plus viewers already invested in the movie, “it was the biggest pilot of all time. No TV show has ever had this.” Read More »
A little more than a year after he was arrested for threatening to kill members of the families of Harvey Weinstein and Ryan Kavanaugh unless he was paid millions, Vivek Shah today was given a stiff sentence behind bars by a federal judge. The 26-year-old West Hollywood actor was given seven years and three months for his $122 million extortion scheme involving the two producers as well as Playtone Co’s Gary Goetzman, Groupon co-founder Eric Lefkofsky and others. Shah sent letters to Weinstein and the Relativity Media boss last summer demanding $4 million and $11.3 million, respectively, be wired to offshore accounts if they didn’t want their loved ones harmed. Despite an elaborate plan of false IDs, anonymous websites and several U.S. Postal Service accounts, the FBI picked up Shah on August 10 in Chicago. “It was an extraordinarily brazen crime, and I’m pleased, for the victims’ sake, that we were able to put a stop to it so quickly,” said U.S. Attorney Booth Goodwin of the Southern District of West Virginia in a statement today.
Related: Harvey Weinstein Helps FBI Foil Extortion Plot
David Shane has joined Relativity as EVP Corporate Communications. Shane will report directly to CEO Ryan Kavanaugh and president Tucker Tooley. He will be responsible for developing and directing the company’s communication strategy, overseeing media relations and serving as a communications adviser to the executive team. He will also partner with the company’s various divisions including film, television, sports, music, digital, home entertainment and international. Kavanaugh called Shane “a trusted adviser to the company and his creativity and strategic mindset will serve us well as Relativity continues to grow.” Read More »
Variety normally delivers between 3-6 copies of its print edition to Relativity Media. On Tuesday morning the trade hand-delivered 50 copies of the weekly with its “Debt Of A Salesman” cover story about the company to Relativity’s offices. Immediately Relativity insiders criticized the move to me as ”a desperate move for attention” for ”a highly speculative story with an uninformed premise”. Hey, this is progress. The last time a media outlet wrote about Relativity in any depth — Ron Burkle Talks Ryan Kavanaugh To The New Yorker — Relativity’s lawyer demanded the article’s retraction and removal from the website. I’m told no legal letter went out this time around — just company spin. Is this a kinder gentler Ryan Kavanaugh under investor Ron Burkle’s tutelage? Well, a less confrontational CEO trying to stay out of the press.
That said, here is Relativity’s on-the-record statement from a company spokesperson to me about Variety’s published gaze into a crystal ball speculating about Relativity’s debt repayment prospects over the next 5-7 years: “Variety invented a fundamentally flawed thesis and then tried as hard as they could to prove it. Unfortunately the best that they could come up with over four pages was one generic quote from a banking analyst and a silly attempt to predict the unpredictable — what may or may not happen in 2018.”
Off the record, a source close to Relativity complains: “Variety bases its piece on $100M of debt that Relativity has to repay over 5-7 years. Has Variety ever heard of refinancing? They don’t understand corporate finance. Most highly successful companies use debt financing as part of their growth strategy. And the only on-the-record quote in a four-page story is from a mid-tier analyst from RBC Capital. Is this the new, harder-hitting Variety? If so, they’ve failed miserably.” Read More »
Report: Ron Burkle Buying Relativity Stake From Elliott Management
Ex-Relativity Media President Michael Joe Leaves Elliott
(West Hollywood, California) January 23, 2012 – Yucaipa Companies, a premier investment firm owned and run by Ron Burkle, today announced that it has purchased a significant equity stake in Relativity Media, a full-fledged film distribution company, television production company, sports agency, Internet and interactive media company. Yucapia’s equity investment follows the successful close of debt financings led by Colbeck Capital, a strategic lender run by Jason Colodne and Jason Beckman, and funded by Burkle.
This investment comes on the heels of the studio’s first year as a full-fledged distribution company. During the past 12 months, the studio has had unprecedented success with two number one opening films; marking Relativity as the only mini-major to achieve such a milestone. It is one of the few mini-majors to have had two films exceed 30 million dollars in domestic box office in their opening weekend.
Over the past year the studio has enjoyed the success of films such as Limitless, The Fighter and most recently Immortals, which has just broken $230 million in worldwide box office receipts, the highest R-rated action opening weekend in 2011, and the third highest opening weekend for 2011 R-rated films.
Read More »
EXCLUSIVE… UPDATE: I’ve just learned that Relativity Media has begun a process of laying off staffers from the operations and marketing teams. All 10 affected employees were told today. Relativity Media has a total workforce of about 215. The layoffs follow the company’s announcement that it will promote the Bandito Brothers’ upcoming action-thriller Act of Valor with four 30-second Super Bowl-timed spots on February 5th. These commercials are super-expensive which is why most studios usually confine their Super Bowl movie ads to one. In addition to business news reports speculating about Relativity Media’s financial health, there has been considerable executive roiling at the top echelon of the media company run by Ryan Kavanaugh.
Burkle’s Yucaipa Buys Music Booking Power Artist Group International
Ex-Relativity Media President Michael Joe Leaves Elliott
Bloomberg is reporting that billionaire Ron Burkle has agreed to buy Elliott Management Corp’s minority stake in Ryan Kavanaugh’s Relativity Media, citing two people with knowledge of the situation. ”The sale price was in the hundreds of millions of dollars, said one person, who declined to be identified because the deal hasn’t been announced. No comment from either Elliott Management or Relativity. Deadline has its own story in the works.
Relativity Media’s key backer Elliott Management Corporation has announced the departure of Michael Joe, the former president of Relativity who was plucked from that post by Elliott to watch its investments with Ryan Kavanaugh. Joe had little to do because Elliott has stopped future funding of entertainment industry ventures. How this factors into the future of Relativity Media and Elliott remains to be seen. Here is the announcement:
New York, NY (January 4, 2012) — Elliott Management Corporation and Michael Joe announced today that, in early 2012, he will be leaving the firm to pursue a new opportunity. In his most recent role, Mr. Joe helped oversee Elliott’s investment in Relativity Media and Elliott’s slate financing deal with Universal. Prior to arriving at Elliott, Mr. Joe was President of Relativity Media.
“I cannot think of a better environment to have profoundly expanded my knowledge and understanding of the private fund management business,” said Michael Joe. “However, it became increasingly apparent that on a personal and professional level, my passion is to be an active participant within the media and entertainment industry. I am grateful to the Elliott team and wish them the best in their future endeavors.”
Read More »
EXCLUSIVE… UPDATED: Sources are telling me that Ryan Kavanaugh’s Relativity Media suddenly is exiting this excellent piece of manpower in a decision made over the weekend. But Relativity Media insiders claim ”his deal was up and options were being weighed” and the company will be “promoting from within”. Steve Hutensky joined Relativity in June 2009 as SEVP and Head of Business Affairs. His departure closely follows Erika Hindle’s jump from EVP of Finance at Relativity Media to CFO of Media Rights Capital. And it follows these recent Relativity stories about turmoil between Relativity and its investor Elliott Associates over finances: Elliott Finally Reins In Ryan Kavanaugh: Moves Relativity Prez Michael Joe In-House; Ryan Goes Off The Rails!; Elliott Takes Back Kavanaugh’s Film Fund With Universal.
At Relativity, Hutensky oversaw all business and legal aspects of the company’s single picture business, including distribution, financing, co-productions, talent agreements and the management of films in production. Prior to joining Relativity, Hutensky worked as an independent producer based in New York City. From 1995 to 2004, Hutensky, a lawyer and former investment banker, worked as an executive at Miramax Films, serving as one of the … Read More »
EXCLUSIVE: James McTeigue, who just completed the John Cusack-starrer The Raven for Relativity Media, is getting back in business with Ryan Kavanaugh. I’m told that McTeigue is making a deal to direct Ness/Capone, the Grant Pierce Myers script that made the 2010 Black List and puts a new spin on the epic battle between Eliot Ness and Al Capone during the Prohibition Era 1920s. Relativity acquired it in April. McTeigue is negotiating, even as he is casting his next film, Message From the King, the Oliver Butcher- and Stephen Cornwell-scripted thriller about an enigmatic outsider who comes to L.A. to investigate the sudden disappearance of his sister. That film is being financed by FilmNation Entertainment.
Ness/Capone covers the feud in more shades of gray than were evident in The Untouchables. Ness is a skirt-chasing 26-year-old publicity hound who seemed to get an adrenaline charge out of courting danger, kicking in doors, smashing moonshine stores and rubbing it in the noses of Capone and other mobsters. He would parade confiscated bootleg trucks past Capone’s hotel, calling Capone in advance to suggest he look out the window. Ellen Goldsmith-Vein, Jeremy Bell, Gianni Nunnari, Jason Felts and Rene Rigal are producing.
McTeigue is repped by CAA.
Yet another case of Hollywood hopping on the China film market bandwagon. Here is the announcement Monday Beijing time: Huaxia Film Distribution Co, Relativity Media, and SkyLand (Beijing) Film-Television Culture Development Ltd jointly announced a strategic partnership. Huaxia Film’s Executive Chairman Guoqing Gu, Relativity Media’s founder and CEO Ryan Kavanaugh, SAIF Partners’ Managing Partner Andy Yan, and IDG China Media’s Founding Partner Hugo Shong attended the press conference. Three parties — Relativity, SAIF, and IDG – also announced the formation of the first China/U.S. distribution company Sky Land Entertainment. Huaxia is one of the biggest movie production and distribution companies in China, releasing more films there than almost any other company. Sky Land has been prominent in the production, financing and distribution of Chinese content films in the past few years.
Said Kavanaugh: ”We’re excited to be entering into this ground breaking partnership. With 6 new screens added daily in China and a business which has been tripling in revenue every 3 years, Read More »
EXCLUSIVE: DreamWorks has thrown in the towel on Southpaw, the boxing drama that has Eminem returning to the screen for the first time since 2002′s 8 Mile, and Antoine Fuqua directing a script by Sons of Anarchy creator Kurt Sutter. The plan was to start in January. DreamWorks’ Stacey Snider, who worked closely with Eminem and his team on 8 Mile while she ran Universal, basically gave the project back to the filmmakers to set up elsewhere and that’s what they are trying to do. Maybe DreamWorks was concerned the market is crowded with brawler films after The Fighter and the upcoming Gavin O’Connor-directed mixed martial arts drama Warrior, or maybe the studio’s cautious after its big bet on Cowboys & Aliens didn’t pay off. (I’m sure it’s coincidence that Snider once unplugged the Fuqua-directed version of American Gangster before putting the picture back together with Ridley Scott). But given the appetite of a crop of distributors looking for wide release product, I’d be surprised if this one, which is fully packaged, doesn’t get off the canvas quickly. Read More »
Back at the first of the month Deadline scooped that Lasse Halstrom was in talks with Relativity Media to direct the adaptation of Nicholas Sparks’ novel Safe Haven, which Relativity picked up in a heated auction last summer, and that a deal would happen quickly. Well, now Relativity is making it official. As I said before, it was a good bet for the matchup as Hallstrom directed the adaptation of the Sparks novel Dear John, which Relativity boss Ryan Kavanaugh financed. Today’s release:
Beverly Hills, CA (June 16, 2011) – Relativity Media has closed a deal with Oscar® and DGA-nominee Lasse Hallström (The Cider House Rules, Dear John) to direct their upcoming film Safe Haven, based on the latest novel from best-selling author Nicholas Sparks, announced Relativity’s President of Worldwide Production Tucker Tooley. The film is scheduled to head into production this year.
Sparks’ previous books have been made into such hit films as The Notebook, The Last Song, Nights in Rodanthe and Dear John. His latest, Safe Haven, is a gripping love story infused with suspense and discovery. When a young woman escaping her past moves to a small North Carolina town, and falls for a loving widowed father, he heals her heart, and helps her escape the danger that threatens her.
Read More »
No decision yet on the merits of either side’s legal argument. But Relativity Media prevailed over The Weinstein Company in court today, according to Relativity’s legal representation. “The Court agreed with Relativity that TWC’s lawsuit against Relativity was improper and violated the parties’ arbitration agreement. TWC must now defend itself in the ongoing arbitration proceeding filed by Relativity. In that proceeding, Relativity claims damages in excess of $20 million against TWC for its egregious mishandling of the movie Nine and seeks rescission of the parties’ agreement with respect to The Crow. Today’s ruling demonstrates that TWC’s efforts to misuse the court system as a means of intimidation against Relativity failed. Relativity expects to prevail on all of its claims against TWC in arbitration.” I love lawsuits between the most controversial indie movie moguls.
To remind, Bert Fields is repping Harvey and Bob’s The Weinstein Co against Ryan Kavanaugh’s Relativity Media seeking injunctive relief and claiming there’s “a written contract signed by everybody” which gives the Weinsteins exclusive worldwide distribution rights on The Crow reboot and that Relativity can’t sell those rights to anybody else. The original film was distributed by the Weinsteins at Miramax back in 1994 and grossed $50.6M domestic. Relativity has been working to put Edward R. Pressman’s The Crow reinvention of the James O’Barr comic book series together.
EXCLUSIVE: Bracing for its race against Relativity Media on rival Snow White films, Universal Pictures has hired Hossein Amini to do a rewrite of Snow White and the Huntsman, the Rupert Sanders-directed film that stars Charlize Theron, Kristen Stewart and Chris Hemsworth. Evan Spiliotopoulos wrote the most recent draft. Amini scripted Drive, the Nicolas Winding Refn-directed film that just debuted in Cannes, and he also rewrote the Keanu Reeves-starrer 47 Ronin, which director Carl Rinsch is directing for Universal.
Universal and Relativity have been playing a game of can you top this in terms of release dates. Universal moved up its Snow White film from late 2012 to a June 1 date, which put it a month ahead of Relativity’s Snow White film, the one that stars Julia Roberts, Lily Collins and Armie Hammer, with Tarsem Singh directing. Then, Relativity Media trumped Universal by setting a March 16, 2012 release. It has created bad blood between the studio and Ryan Kavanaugh, but that is how it stands at the moment. Hossein is repped by WME.