Ryan Kavanaugh's reboot of Relativity Media appears to be short-lived.
Six months after emerging from bankruptcy with most of his company intact, the CEO has decided to put Relativity up for sale. Sources say Relativity has hired Entertainment Media Partners (EMP) and Zolfo Cooper to help with the sale and began fielding offers over the weekend. Relativity did not return a request for comment.
The decision comes on the heels of Relativity's first wide release post-bankruptcy, Masterminds. The Zach Galifianakis, Owen Wilson and Kristen Wiig comedy opened Friday but fizzled with just $6.6 million in the U.S. despite being on 3,042 screens. The company also released The Disappointments Room in September, which has earned a dismal $2.4 million to date.
Newly installed president Dana Brunetti - the producer behind such film and TV hits as The Social Network, Fifty Shades of Grey and House of Cards - is expected to stay on in his role post-sale.
It's a dramatic twist in the Relativity saga that saw the company embroiled in one of the largest and most closely watched bankruptcies in Hollywood history. In July 2015, Relativity filed for bankruptcy protection in New York, listing assets of $560 million and liabilities of a whopping $1.18 billion. But Kavanaugh surprised Hollywood when he enlisted Brunetti and his Trigger Street partner Kevin Spacey to lead Relativity post-bankruptcy (Spacey dropped out before his deal ever closed) and eventually held onto his company.
In recent weeks, Kavanaugh had been scrambling to secure the financing needed to make Relativity's debt payments to hedge fund Anchorage Capital. But those efforts failed, and though Anchorage recently granted Relativity a 30-day extension on its debt payments, Kavanaugh had run out of options.
Many in the financial community speculated that Relativity would wind up defaulting on its debt or back in bankruptcy. Instead, a move to sell was seen as the best option. That decision was made by Kavanaugh, Joseph Nicholas (the Chicago-based hedge fund billionaire who put in $117 million of his own money) and Anchorage.
One of the biggest selling points for Relativity and that which lured Brunetti to the embattled studio is its lucrative output deals, which guarantee distribution of Relativity films in some 110 countries. In his first interview post-bankruptcy, Kavanaugh told The Hollywood Reporter, "We cover between 80 and 100 percent of the budget of any movie we make before we say 'go,' without having to do anything."
It is unclear if Kavanaugh - who founded the studio in 2004 - is going to remain CEO during the term of the sale. At its height, Relativity employed 350 people. Currently, there are 75 on staff.