Relativity Television chief Tom Forman told the U.S. Bankruptcy Court in New York today that he and other senior executives are close to signing new contracts with the hedge funds planning to buy the operation — and have secured their commitment to grow the business.
Last week, Judge Michael Wiles, who is overseeing Relativity Media’s Chapter 11 bankruptcy case, approved the company’s deal to turn the TV unit over to the funds, known in the case as Stalking Horse Bidders. The group includes Colbeck Capital, Anchorage Capital, Falcon Investment Advisors, and Luxor Capital. They agreed in return to forgive $125 million worth of Relativity’s debt. The sale is due to close October 20.
The TV business is already “a profitable and positive cash flow-producing venture, with a historical track record of growth,” Forman says in a court filing. “In fact, notwithstanding the distractions of a bankruptcy, 2015 is on pace to be another record year for the TV Business for episodes delivered, revenues and EBITDA.”
And he’s optimistic now that the “distractions inherent in managing the Television Business in the face of repeated near-term liquidity crises are now behind us.”
Under its new owners, Relativity TV will have “a debt free balance sheet with no long term debt enhanced by a capital contribution of at least $75 million,” Forman adds. He has agreed to the principal terms of a new employment contract which he expects to sign “in due course.”
In addition Relativity TV will have “a stable work force secured by the investors’ contractual commitment to provide consistent levels of salaries and benefits to existing employees.” All of the major producers with whom it deals “have consented to the assignment of their contracts, ensuring those producers’ continued focus on development and production of our shows.”
As a result, “the team that built the business remains in place and more committed than ever to growth and success.”
Relativity TV will have three months to rebrand itself. Its shows include CBS’ Limitless, MTV’s Catfish: The TV Show, and Lifetime’s Kim Of Queens. The operation accounted for 19% of Relativity Media’s $501.1 million in revenues in 2014.