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In a dramatic and unexpected turn of events, Relativity Media’s Ryan Kavanaugh has recruited actor Kevin Spacey and producer Dana Brunetti to run Relativity Studios’ film and scripted TV business as it emerges from bankruptcy.
Relativity announced late on Wednesday that it has entered into an agreement to acquire Trigger Street, the production studio that Spacey and Brunetti have run since 1997. Spacey will become chairman of Relativity Studios and Brunetti will serve as president, effective in mid-February. Together, they will oversee all creative content and film production for the company.
At Trigger Street, the two partners have successfully turned out such projects as Netflix’s House of Cards and films like The Social Network, Captain Phillips and Fifty Shades of Grey. Financial terms of the acquisition were not disclosed.
While Spacey is best known as an actor, having won Oscars for The Usual Suspects and American Beauty and Emmy nominations for his portrayal of unscrupulous politician Frank Underwood in House of Cards, he and Brunetti have developed a successful track record as one of Hollywood’s top producers. Spacey also recently completed 11 years as artistic director of London’s Old Vic Theatre, restoring the venue’s standing and leaving it on a sound financial footing.
House of Cards began streaming in 2013, and helped put Netflix on the map as an outlet for original programming. And given that Relativity has had an output deal with Netflix, Spacey and Brunetti are likely to develop that relationship further in their new roles.
“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. “This is an incredible opportunity to make great entertainment. I’m thrilled at this next evolution in my career, having run an independent production company to now be able to run a studio is a great challenge, and I’ve learned that in the end it’s the risk takers that are rewarded.”
The deal represents a lifeline for Kavanaugh since Relativity plunged into bankruptcy in July.
The official committee of unsecured creditors involved in the studio’s bankruptcy case said on Jan. 4 that it supports Relativity’s plan of reorganization and recommends that all unsecured creditors vote to accept the plan. The presiding judge will still need to approve it, and a court hearing to consider confirmation of the plan is scheduled for Feb. 1.
Relativity’s film operation has been at a standstill since it filed for chapter 11 bankruptcy, and top execs like Tucker Tooley and Happy Walters have left the company amid a round of layoffs. Many in Hollywood doubted that the high-living Kavanaugh would be able to hold onto the company that he co-founded in 2004. While Relativity had assets of $560 million, it was weighed down by $1.18 billion in liabilities.
Though Kavanaugh claimed to have developed a numbers-driven approach to film investment, Relativity found only a handful of hits like 2011’s Limitless and Immortals. Those films were outnumbered by under-performers and outright bombs like 2011’s Machine Gun Preacher.
But Kavanaugh continued to search for sources of new financing. In October, Relativity sold off the bulk of its TV assets for $125 million to a consortium of Wall Street bidders that included Anchorage Capital Group, Falcon Investment Advisors and Luxor Capital Group. A new group of investors led by Kavanaugh put up $60 million for the company’s remaining assets, including distribution rights to its unreleased films.
Relativity announced in December as part of its reorganization plan that it hoped to release seven films over the next 18 months, among them the Zach Galifianakis-Kristen Wiig picture Masterminds and the Halle Berry-starrer Kidnap.
Kavanaugh said in a statement released late on Wednesday that he felt confident the new leadership would help revive the studio.
“I am thrilled to welcome Kevin and Dana to Relativity,” said Kavanaugh, Relativity chairman and CEO, 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.”
Brunetti said that “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. Being a disruptor at heart, I look forward to the opportunities that being inside a studio system will present.”
Brunetti celebrated the development on his Twitter feed by posting an image of the Trigger Street logo, on which Einstein’s famous formula for relativity had been written.
Happy New Year! pic.twitter.com/gveRJPzZkq
— Dana Brunetti (@DanaBrunetti) January 7, 2016
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