Relativity Media insiders and allies of Ryan Kavanaugh are hoping the founder/CEO will remain in charge of the company amid an orderly reorganization. But those familiar with the state of the studio and with previous Chapter 11 cases warn: the coming months will be anything but tame.
Sources familiar with his thinking said Kavanaugh takes the position that the business he founded 11 years ago remains solid, if it can just be relieved of excess debt. The sources added that Relativity can be stabilized and rebuilt, particularly relying on revenue from its lucrative TV production unit and subsidiaries like Relativity Sports –the agency (of which it owns just 30%) that provides representation to pro athletes.
But outsiders who have studied Relativity said they believe a contentious and protracted battle will be waged over the company and its diminished assets. Rather than a steady reconstruction, they expect Relativity’s senior debt holders to move to take control of the mini-studio, perhaps so they can auction it off in pieces.
