Relativity Media facts for kids
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| Genre | Independent films |
| Founded | May 18, 2004 |
| Founders | Lynwood Spinks Ryan Kavanaugh |
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United States
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| Owner | UltraV Holdings |
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Number of employees
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Approximately 350 (2013) |
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Relativity Media, LLC is an American company that makes and distributes movies. It was started in 2004 by Lynwood Spinks and Ryan Kavanaugh. The company first helped other film studios get money for their movies. Later, it began making its own films and getting involved in other entertainment projects. Relativity Media was quite successful before it faced financial difficulties.
In 2015, Relativity Media had to file for a special kind of bankruptcy called Chapter 11. This happened after some legal issues and problems with paying back loans. This bankruptcy was a big event in the entertainment world. Because of it, the company started selling off many of the films it owned. Relativity Media reorganized and came out of bankruptcy in March 2016. However, in May 2018, it faced financial troubles again and filed for bankruptcy a second time. Today, the studio is owned by a company called UltraV Holdings.
Contents
History of Relativity Media
How the Company Started
Relativity Media was founded in 2004 by Ryan Kavanaugh and Lynwood Spinks. Kavanaugh convinced Spinks, who used to work for another film company, to invest $1 million to start the business.
At first, Relativity worked as a middleman. They helped connect film studios with banks and investment groups to get money for many movies at once. In 2005, Hollywood studios needed more money because a special tax rule that helped them for 25 years was removed. Relativity Media stepped in and helped them find money from big financial groups.
Relativity helped get money for movies made by Warner Bros., Universal Pictures, and Sony Pictures. For each movie, Relativity earned money and a fee. Kavanaugh also got a special credit as an executive producer.
In 2007, Kavanaugh and Spinks had a disagreement, and Kavanaugh took legal action against Spinks.
Growing the Business
In 2008, an investment company called Elliott Management bought nearly half of Relativity Media for $67 million. This deal also gave Relativity access to about $1 billion in funds. With more money, Relativity could get more involved in making movies.
In 2009, Relativity made a deal with Lionsgate Studios to distribute their films. They also bought Rogue Pictures from Universal Pictures for $150 million. In 2010, Relativity made a deal with Netflix, allowing movies owned by Relativity Media to be streamed online. Relativity also bought the distribution and marketing parts of Overture Films.
With Elliott Management's support, Relativity Media eventually started its own studio. They began producing and distributing their own movies. The studio released its first film on December 3, 2010.
Financial Challenges and Changes
In 2011, Elliott Management stopped providing financial support to Relativity. There were reports of tension between the two companies. In May 2011, Relativity's president, Michael Joe, moved to Elliott Associates to manage their investment in Relativity. Elliott had invested a lot of money, but they weren't seeing much profit.
Relativity also started releasing its own movies at the same time as Universal's films. This included two different movies based on the Snow White story. Universal executives felt Relativity was using the money from their joint deals to compete against them.
Relativity then took out a $200 million loan from Ronald Burkle, an investor who also had other entertainment investments. This loan helped cover the high marketing costs for Relativity's big movie Immortals. In January 2012, as Relativity continued to struggle financially, Kavanaugh looked for a new major investor. Burkle and his partners invested between $600 million and $800 million and became shareholders in the company.
In May 2012, Relativity announced that Colbeck Capital helped arrange $350 million in new funding, and Elliott Management left its investment in the company. Later that month, Relativity made a deal with EuropaCorp to co-produce and co-finance two movies that Relativity would distribute in the United States. Relativity also had co-production deals with Atlas Entertainment.
On June 12, 2012, Relativity Media and Rogue sold 30 of their films to Manchester Library Company.
In July 2012, Relativity combined its sports agencies into Relativity Sports. This new division represented over 400 athletes, including Amar'e Stoudemire.
In 2013, an investor named Carey Metz put $10 million into Relativity Media. He later said he made this investment based on things Ryan Kavanaugh told him.
In April 2013, Relativity partnered with Glenn Kalison to create a film and performing arts school called Relativity School.
Most of the movies the studio released did not earn much money at the box office. The movie financing deals Relativity Media arranged for investors also did not turn out well for those who had invested money.
2015 Bankruptcy and Film Sales
In July 2015, Relativity Media filed for Chapter 11 bankruptcy. This meant the company needed legal help to reorganize its finances. They owed a lot of money, estimated between $500 million and $1 billion, but only had assets worth much less. The company was struggling with its unpaid debts. This bankruptcy filing happened after investors tried to save the company by stopping Kavanaugh and Relativity from making unsupervised deals. The Hollywood Reporter later called it one of the most well-known Hollywood bankruptcies ever. The company stayed under bankruptcy court supervision for almost eight months, until March 2016.
Because of the bankruptcy, Relativity sold off many of its films. Here are some examples:
- Suffragette was sold to Focus Features. Kavanaugh stepped down as a producer for this film.
- Jane Got a Gun was bought by TWC.
- The Bronze was purchased by Sony Pictures Classics and Stage 6 Films.
- Love the Coopers was bought by Lionsgate and CBS Films.
- The Space Between Us and The Foreigner were sold to STX Entertainment.
- Solace was acquired by Lionsgate Premiere.
- Collide was purchased by Open Road Films.
- Kidnap was bought by Aviron Pictures.
- Before I Wake and Animal Crackers were sold to Netflix.
- Shot Caller was acquired by Saban Films.
- Hillsong: Let Hope Rise was purchased by Pure Flix Entertainment.
- Fallen and The Secret Scripture were bought by Vertical Entertainment.
Relativity's rights to distribute films from EuropaCorp were transferred to STX Entertainment in January 2017.
In September 2015, three women who were part of a Relativity Media reality show filed a lawsuit. They claimed the company did not keep its promises to help them with housing, education, and other support after the show. Two of the women also sued Relativity Media for not blurring their faces in the footage, which they had been promised.
Reorganizing the Company
On January 6, 2016, Relativity Media acquired Trigger Street Productions. The owners, Kevin Spacey and Dana Brunetti, were offered important roles at Relativity Studios. However, Spacey later decided not to take the offer, but Brunetti's position remained.
On January 26, 2016, Relativity Television, the company's TV division, became an independent company called Critical Content after the bankruptcy.
On March 18, 2016, the company officially came out from under the bankruptcy court's supervision. After the bankruptcy, Ryan Kavanaugh received $2.6 million between April and November 2016, even though the company had not paid some of its bankruptcy fees or filed tax returns.
On September 8, 2016, Relativity launched R2 Entertainment. This new company is based in Canada and focuses on distributing independent films with smaller budgets (under $15 million). Mark Kassen and Dana Brunetti lead it.
On October 28, 2016, Kavanaugh announced that he was selling Relativity to YuuZoo, a social networking company from Singapore, for $250 million. Other companies, like the Chinese technology company Lenovo, also tried to buy Relativity. However, on March 2, 2017, YuuZoo announced they were canceling the investment because certain conditions for the deal were not met.
2018 Bankruptcy and Sale
In May 2018, the company filed for bankruptcy again and made plans to sell all its assets. The U.S. Trustee's office, which oversees bankruptcies, was concerned about this filing. They believed it might be set up to benefit Kavanaugh and a lender called UltraV Holdings more than other people the company owed money to. This concern was partly because Relativity had not even paid the fees it owed from the 2016 bankruptcy.
The trustee's office also found that Kavanaugh continued to have access to Relativity's computer systems, email, and bank accounts even after the filing said he had left the company.
In June 2018, Netflix sued Relativity Media. Netflix claimed Relativity broke a deal by providing five movies that were supposed to be only on Netflix to Amazon and Starz. Netflix said they paid Relativity for the rights to stream these movies: The Lazarus Effect, The Woman in Black 2, Beyond the Lights, And So It Goes, and Hector and the Search for Happiness. Netflix also claimed Relativity Media did not provide the agreed number of films. Relativity Media promised 22 films between 2016 and 2018, including eight in 2017, but allegedly only delivered three.
Also in June 2018, a legal case found that some executives from Relativity Media, including Kavanaugh, had changed a document. Kavanaugh said this finding was false.
In June 2018, investor Carey Metz filed a lawsuit against Relativity's CEO Ryan Kavanaugh. Metz claimed that Kavanaugh's statements about a special computer system had misled him, causing him to lose $12.5 million. After working with Relativity for five years, Metz said that Kavanaugh's system was not good at predicting which films would be successful.
In August 2018, the U.S. Bankruptcy court approved the sale of the company to UltraV Holdings.
In 2020, Lex Miron, the CEO of Relativity Media, announced that Come Away would be the first movie released by the "new Relativity Media" under UltraV Holdings. Miron told The Hollywood Reporter that it took two years after the 2018 bankruptcy to "quietly and carefully rebuild the studio." He said Relativity Media's future plan would be to focus on making smaller to mid-budget films.
In May 2025, Relativity received a new investment from Content Partners Capital. This investment helps Relativity Media have more money to buy new films for theaters. Relativity plans to spend about $100 million buying rights to films in the United States over the next three to five years.
Filmography
