Relativity shifts to producing films instead of acquiring them
With investor Elliott Management having taken control of its co-financing arrangement with Universal Pictures and a similar deal with Sony Pictures ending in April, Relativity's business is now entirely dependent on the films it releases.
Since the studio run by Ryan Kavanaugh began distributing its own pictures last year, its two biggest hits have been "Immortals," which opened to $32.3 million this weekend, and March's "Limitless," which premiered in March and grossed a total of $79 million domestically. Both were productions managed by Relativity. A number of movies for which Relativity acquired distribution rights -- including "Take Me Home Tonight," "Shark Night 3D," and "Machine Gun Preacher" -- have flopped.
"We're more cautious now about acquisitions because they haven't performed as well as the movies we produced and financed in-house," Relativity's co-President Tucker Tooley said in an interview.
Unlike most studios that have movies scheduled and in various stages of production for late 2012 and into 2013, Relativity's releases will taper off by mid-spring. It has six pictures, including the nearly $100-million Snow White adaptation "Mirror Mirror" and the Navy SEALs action picture "Act of Valor" set to come out by April.
Only one other movie, the low-budget comedy "21 and Over," has been shot and is awaiting a release date.
Relativity has two releases scheduled for later in 2012: "Safe Haven," based on the Nicholas Sparks novel, and action movie "Hunter Killer" to be directed by Antoine Fuqua. However,it has not yet cast actors or set a production start date for either film.
The uncertainty about Relativity's future comes as Elliott, its sole investor for many years, is winding down its involvement in the studio. Kavanaugh has been trying to raise roughly $700 million from investment bank JPMorgan Chase & Co. to buy out Elliott and has been seeking to raise hundreds of millions of dollars to fund marketing expenses, according to people close to the studio.
In an interview, Kavanaugh denied that Relativity has been having any financial problems or is looking for new marketing dollars.
See the story in Saturday's Times for much more on the challenges faced by Relativity and Kavanaugh.
-- Ben Fritz
Credit: Stephen McHattie and Henry Cavill in "Immortals." Credit: Jan Thijs / Relativity Media.