Thursday, 2 June 2011

Hollywood Babble On & On #737: Everything's Relativity

Ryan Kavanaugh, the man who runs indie company Relativity Media, is a genius, I know this because Ryan Kavanaugh has told the world. Repeatedly.

His latest brain-fart stroke of genius is to "spin off" the $600 million Beverly 2 co-production fund Relativity had in partnership with hedge fund Elliott Associates and Universal Pictures.

Now some are saying that the emphasis in that story is on the word "spin" because other sources are saying that the Beverly 2 fund was taken away from Relativity, because both Elliott Associates, and Universal Pictures were unhappy in their dealings with the company. Elliott didn't care for Kavanaugh's decidedly flamboyant management style, which included announcing that he was selling their stake in the company, when Elliott says he couldn't, and Universal was definitely not happy with Relativity scheduling their releases to directly compete against Universal releases.

Oy gevalt. This is not how you run a railroad.

Sure, as a producer Kavanaugh has racked up a few films that made over $100 million at the box-office, but the emphasis has to be on the word "few." And some, like
Little Fockers, that had a production budget over $100 million, and about the same amount spent on marketing, most likely still lost money, despite the ticket sales.

With that record you need all the friends you can get.

Especially when those friends have a $600 million co-production fund.

Investors and partners are simple creatures, and henceforth are easy to take care of. They want stability, security, and above all, a nice return on their investment. They don't care about how glamorous your lifestyle is, or how grand your entrance is at the latest film festival, they just want to know that your eye is on the ball.

If they're experienced film investors then they should understand that the business has great potential for rewards, but that potential goes alongside extreme risks. That's why you need to be a picture of stability and probity. And don't go and RELEASE MOVIES TO DIRECTLY COMPETE WITH YOUR OWN PARTNERS WHILE ALIENATING A MAJOR INVESTOR!

It's not rocket science, it's just plain old common sense.


  1. Blast Hardcheese3/6/11 8:14 am

    Wait, backupbackupbackup....

    "Little Fockers" cost over $100M to make? Not including P&A?


    Why, fer cryin' out loud?

    Is De Niro able to command that big of a paycheck? Stiller?

    OK, when a stupid comedy with no explosions costs north of 100 big ones, the studio system is beyond the point of no return. All that remains it to watch it smash.

  2. $100 million at least. Most of it the salaries of the cast. James L. Brooks spent $120 million making How Do You Know.

    It's insanity.

  3. Blast Hardcheese3/6/11 3:01 pm

    Yeah, I'd heard about HDYK costing a boatload, but I figured that was due to Jack.

    It can't go on. There has to be some point at which investors will just say 'heck wit it' and bail, right? Or will the 'glamor' of being in the movie industry keep the suckers, I mean investors lining up?