Relativity Media Founder & CEO Ryan Kavanaugh and an investor group including Penguins co-Owner Ron Burkle "have successfully negotiated a deal that could give them the bulk" of the bankrupt company, including a "25% share" of the Relativity Sports agency, according to James Rainey of VARIETY. The announcement came a day after the company’s TV unit "went to an
alliance of three hedge funds." Kavanaugh is in a position to "remain
atop the company and to remain a player" in the industry. Kavanaugh’s investor group said that the new arrangement will leave the company with just $30M in debt for properties "including filmmaker Relativity Studios, ... an interest in a distribution joint venture, Relativity Music and Relativity Education, which runs a for-profit school for the fine arts" (VARIETY.com, 10/4). In N.Y., Richard Morgan noted Relativity "will look to gain Bankruptcy Court approval" at a hearing on today. The amount of the bid, from the TJ Group, as the winning consortium calls itself, "was not released." A creditor group "will buy Relativity’s TV assets -- considered the company’s crown jewel" -- for $125M as part of the reorganization (N.Y. POST, 10/5). In L.A., Ryan Faughnder notes Kavanaugh had "long been expected to make a play for the company he founded" in '04, though there were many "who doubted he could pull it off" (L.A. TIMES, 10/5).
