At the height of Hollywood, studios used to rule the filmmaking game. The studio system of the 1920s-1950s set up major names like RKO Pictures, Paramount Pictures, and Warner Bros. to produce big hits all on their own. Studios and production companies were nearly synonymous, with companies like Columbia or Paramount controlling most aspects of filmmaking, from performer contracts to theatrical distribution. The old studio system disappeared after the advent of television, and now most studios work independently from production companies, with the production companies in charge of making films and studios heading up financing and distribution. For instance, Lucasfilm Ltd. and Bad Robot Productions produced Star Wars: The Force Awakens under Walt Disney Studios Motion Pictures.
Relativity Media LLC is one such modern "studio" company. Though the company also has sports, digital, and education arms, movie buffs undoubtedly recognize Relativity's name, and have probably seen its logo on the big screen. Relativity has had a hand in hit films of all kinds, from Atonement and The Social Network to Zombieland and Bridesmaids. Despite its many successful titles, CEO Ryan Kavanaugh has revealed some surprising -- and unencouraging -- news about the media company.
A recent report from THR states that, per Kavanaugh, Relativity is officially up for sale. The company has hired EMP and Zolfo Cooper to assist with the sale and consider offers. The media company underwent a high-profile bankruptcy last summer, during which they revealed that their liabilities more than doubled their assets. Despite it all, Kavanaugh held on to his company, and emerged from bankruptcy this March with president Dana Brunetti (and almost-chairman Kevin Spacey, if you can believe it). In order to settle Relativity's current debts, though, Kavanaugh and consultants have decided that selling is the best option.
It's likely the company's recent box office flops are responsible for this latest issue. Though the studio held high hopes for horror-thriller The Disappointments Room and Kristen Wiig-led Masterminds, both have underperformed at the box office. Masterminds has only raked in $6.6 million, while The Disappointments Room is hardly well on its way to recouping its $15 million budget with just $2.4 million in sales. It's one thing to finance a few flops, and another thing to finance two movies that flop hard enough (on top of everything else) to inspire you to put your company up for sale.
It's unclear what will happen to Relativity in the wake of this upset, and what losing the company will mean to the larger film world. It's notable, for instance, that Relativity was able to aid in such critical hits as Zero Dark Thirty and Les Miserables quite recently, but in recent years has mainly financed duds: horror sequels, too-bawdy comedies, and action-packed franchise updates. This shift in focus could have just been a bad move by execs, or it could point to a larger demand on the whole for shallow, more entertainment-driven films. Either way, it will be interesting to see what happens to Relativity next -- and whether this signals a change in the realm of film distribution.
Masterminds is now playing in U.S. theaters.