Relativity Media Lines Up Sale To NY Investor Group & Chapter 11 In Bid To Revive Slate And Netflix Deal

Associated Press

EXCLUSIVE: Following one of the industrys most involved sagas, we can reveal that Relativity Media has entered into an agreement to sell all of its assets to a New York investor group. Intended buyer UltraV Holdings LLC is a JV made up of funds managed by Sound Point Capital Management, a New York-based asset management firm with a reported $17B of assets under management, and RMRM Holdings. The fee was undisclosed.

RMRM is led by David Robbins, former Chairman of Bally Technologies; Lex Miron, veteran media industry advisor; and Larry Robbins, seasoned media industry executive. The plan is for UltraV to inject enough capital into the damaged firm to get it back into development and distribution, including via what the new investors say is an on-going deal with Netflix. Relativity founder Ryan Kavanaugh is not expected to have anything to do with the company under the new owners. Netflix was unavailable for comment at time of posting.

The deal will need to come about through a section 363 sale and a Chapter 11 bankruptcy filing. Relativity Media and “certain of its subsidiaries” are expected to imminently file the Chapter 11 petitions in the U.S. Bankruptcy Court for the Southern District of New York. The sale will then be subject to court approval and other closing conditions but is expected to close in the next 45 to 60 days.

“We are very excited to acquire the assets of Relativity Media, and we believe there are numerous opportunities to reinvigorate and expand the business,” said Lex Miron. “We have a strong development slate and are looking forward to bringing these films to audiences through our distribution partnerships, including through our agreement with Netflix. We are committed to putting the necessary resources into the business so that we can attract and retain new talent, create outstanding original film, television and digital content, and distribute that content across multiple platforms.”

“Our simple message to the industry is that Relativity Media is open for business and we look forward to demonstrating that we intend to operate a substantial and well financed entertainment company with strong and stable leadership,” commented David Robbins. “We recognize that Relativity Media has had its fair share of challenges during the past several years, and that we need to rebuild trust and confidence in the business. It is our full intention and commitment to put those past chapters behind us and resume the business of creating and distributing outstanding content. We are confident that we have the collective industry expertise, relationships and, perhaps most importantly, the financial resources to fulfill that commitment and build a successful and sustainable business.”

Kavanaugh added, “I still very much believe in the Relativity Media business model. Unfortunately, the company faced the significant challenge of a complicated capital structure and an evolving industry. I could not be more pleased about this agreement with UltraV. The transaction will result in a fresh start for the company, and it turns Relativity over to owners who have a sincere appreciation for the business, the art and the long term needs of the industry.”

Robbins concluded, “UltraV will now be focused on completing the sale process as expeditiously as possible and ensuring that once the transaction is finalized Relativity Media can hit the ground running with appropriate financial backing and a strong leadership team.”

This would be some attempted comeback should it make. Its the first weve heard from Relativity in a little while. Last year the failed mini-studio, which has already been through the Chapter 11 process, spent time in court trying to convince judges of potential investors and getting into skirmishes with Netflix. Last month, a New York judge dismissed a $110M lawsuit from a lender who claimed they were tricked into ploughing money into the company as it was heading toward bankruptcy. It is not immediately clear which, if any, of the former Relativity movies could transition to the new entity and todays announcement could potentially kickstart a new round of claims from creditors.

The once voracious company, which had a hand in a string of studio movies including American Gangster, Mamma Mia! and State Of Play, also comprised sports, education and music divisions. In 2015, the beleaguered outfit sought bankruptcy protection and an auction of the company, stating liabilities of up to $1B.

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