Relativity Media

History

Relativity Media was launched in 2004 by Ryan Kavanaugh and Lynwood Spinks, with Kavanaugh persuading Spinks, a former Carolco Pictures executive, to put up $1 million. The company started by acting as an intermediary, connecting film studios with banks, private equity firms, and hedge funds to fund groups of movies. When a long-standing German tax shelter for Hollywood ended in 2005, Relativity stepped in using money from Wall Street, which was plentiful at the time. It set up financing for film slates at Warner Bros., Universal Pictures, and Sony Pictures, earning equity and brokerage fees between $500,000 and $1 million per movie, while Kavanaugh also got an executive producer credit. After a dispute, Kavanaugh sued Spinks in 2007. The following year, Elliott Management purchased a 49.5% stake in Relativity for $67 million, also giving it access to roughly $1 billion in capital and a revolving credit line. This cash allowed Relativity to get more involved with production companies. In 2009, it struck an output deal with Lionsgate and bought Rogue Pictures from Universal for $150 million. The next year, Relativity made a streaming deal with Netflix and acquired the distribution and marketing operations of Overture Films. With Elliott Management's backing, Relativity eventually started its own studio, releasing its first film on December 3, 2010.