In a blockbuster move intended to resurrect his bankrupt company, Relativity Media CEO Ryan Kavanaugh has reached an agreement to have Kevin Spacey and the actor’s producing partner, Dana Brunetti, run Relativity’s beleaguered studio, the company confirmed late Wednesday.
The deal brings Relativity not only the Oscar- and Emmy-winning actor and his long-time business partner, but also their Trigger Street Productions, producer of “House of Cards.” The acquisition of the production company and its star founder marks a major coup for Kavanaugh, who could not prevent his company from sliding into Chapter 11 bankruptcy five months ago.
Relativity has been fighting to raise $100 million in new capital to help complete a reorganization that would revive the moribund movie unit. An alliance of senior creditors has already taken over the company’s television operation. A U.S. bankruptcy court judge is scheduled to consider Kavanaugh’s reorganization plan on February 1.
Spacey will become chairman of Relativity Studios and Brunetti president as of mid-February, according to the announcement. The duo will oversee all creative content and film production for the company. Financial terms of the deal were not disclosed.
“I am thrilled to welcome Kevin and Dana to Relativity,” Kavanaugh said in a statement. “Kevin’s incredible creative success as a two-time Academy Award winner and star and producer of the critically acclaimed House of Cards speaks for itself. Dana has remarkable instincts and an impressive track record of producing films such as Fifty Shades of Grey and Captain Phillips. Both men share my passion for film and Relativity’s unique 360 degree content engine, and I could not be more excited to partner with such talented professionals.”
Kavanaugh’s reputation has taken a beating in the months leading up to a July 30 bankruptcy filing and since then, as his company registered liabilities of $1.2 billion and assets of $560 million. One financial partner accused him of fraud and a major producer, Neal Moritz, also briefly charged Kavanaugh with misleading him into making a movie deal, before later revoking his accusation. Kavanaugh has denied the allegations against him and responded that his company was the victim of one-time allies who tried to undermine him to take control of Relativity.
Spacey’s own statement acknowledged that many would be stunned by the news he was joining the company.
“They thought we were crazy when we chose to do ‘House of Cards’ with an online streaming service; they thought I was crazy when I went to run The Old Vic Theatre when no one thought it could be saved; and this move with Relativity will be proof for some that we really are crazy,” Spacey said. But he called the move “an incredible opportunity to make great entertainment” and said he considered it the “next evolution in my career.”
“Having run an independent production company to now be able to run a studio is a great challenge,” Spacey said, “and I’ve learned that in the end it’s the risk takers that are rewarded.”
Brunetti said Relativity would work to differentiate itself from other filmmakers. “While other studios are focusing on tentpoles and franchises, there is a void with an eager audience for films that are character driven with great storytelling that can be made at a reasonable budget,” Brunetti said in a statement. “Being a disruptor at heart, I look forward to the opportunities that being inside a studio system will present.”
Casting a marquee actor-producer duo in executive leadership roles is unusual in Hollywood, though not unprecedented. Tom Cruise and his longtime producing partner Paula Wagner were recruited to run United Artists in 2006 in what was billed as a boon to the actor’s then-lagging career. But the duo’s initial films did not win over audiences and parent company MGM ran into problems financing its own productions. As MGM backed off its commitment to United Artists, Wagner and Cruise split in pursuit of their own projects.
Kavanaugh had been looking for weeks for new executives to replace the top managers, including president Tucker Tooley, who left the company last year.
Spacey, who had been best known for his powerhouse work in films such as “American Beauty” (for which he won a Best Actor Oscar) and “The Usual Suspects” (for which he scored a best supporting actor Oscar), is now also a celebrated TV star for his turn as President Francis Underwood on “House of Cards.” Along with Brunetti, he has also been a producer known for embracing digital innovation, like an online platform offering feedback for screenwriters, as well as for backing a series of acclaimed films, including “The Social Network,” “Captain Phillips” and “Fifty Shades of Grey.”
A move to Relativity could give the star and his producing partner a larger platform for launching new projects. It would help reestablish a measure of credibility for Kavanaugh’s film operation, which has been battered by a series of lackluster films and a financial meltdown that has delayed the release of many others. A Spacey-Brunetti combination at Relativity would presumably help resolve some of the issues the mini-studio might otherwise have in luring talent to embark on new movies.
Brunetti has worked with Relativity in the past — reaching an accord a year ago to make a movie about the 2012 terrorist attack in Benghazi, an episode that claimed the lives of two Americans and raised a political furor over the American response. The studio bought story rights from some of the principals on the scene of the debacle. The project is separate from the soon-to-be released “13 Hours,” another Benghazi-themed film, from Paramount.
Brunetti, it is fair to assume, also will want to continue as the producer of the lucrative “Fifty Shades of Grey” movies.
Spacey appeared at the Consumer Electronics Show in Las Vegas on Tuesday to talk about the intersection of storytelling and technology. He made no mention of the impending deal with Relativity.