Relativity’s television operation is emerging from bankruptcy with new owners, new business plan, a soon-to-be-revealed new name and its old leadership and staff.
Hours after U.S. Bankruptcy Court Judge Michael Wiles this morning approved an agreement for the TV unit to be handed over to the Stalking Horse Bidders, which includes Colbeck Capital, Anchorage Capital, Falcon Investment Advisors, and Luxor Capital, the investor group’s purchase of the assets of Relativity Television from the Chapter 11 estate of Relativity Media was completed at about 2:30 PM Tuesday. In their first move, the new owners have locked in Relativity TV’s two top executives.
Tom Forman and Andrew Marcus both have signed new multi-year contracts with Relativity Television, which emerges from the Chapter 11 process as a profitable, independent entity with no debt. Forman will continue as CEO, while managing director Marcus has been promoted to president. Under the bankruptcy agreement, Relativity TV, which will continue to develop and produce both scripted and unscripted series, has three months to rebrand itself, and finding a new name is “at the top of the to-do list,” Forman said.
Coming off what Forman referred to as “the weirdest summer of our lives,” he called the acquisition of the TV division by the Stalking Horse group with a commitment of $75M in capital to grow the business “the best possible outcome for this company.”
“Of all the places Relativity TV could’ve ended up, we found ourselves independent and properly capitalized, which is as good as it gets,” Forman said. “As consolidation has been happening in TV — especially on the unscripted side — over the past few years, it’s such an exciting time to be a truly independent company.”
While Relativity TV could only grow organically when being part of a larger studio with an option for a limited number of overall deals as a way of attracting talent, the company plans to be aggressive as an independent.
Relativity plans to expand its staff a bit (but still staying “lean and nimble”), invest in infrastructure, step up overall deals and start looking for companies to acquire. “We will go from a large domestic production company to a very large international production company very quickly,” Forman said.
The plan “for the short and medium term is to become a very strong independent studio,” Marcus said. Long-term, the company could entertain potential suitors should they pursue to acquire it.
Forman noted that there were multiple bidders for Relativity’s TV assets and hinted that he might have exited if Relativity was kept as one entity per the original plan. “If that company remained intact, I would’ve felt differently,” he said.
Forman called the staff of Relativity TV, some of whom have worked with him for decades, “the backbone of the company.” He said no one left as Relativity went through bankruptcy and expects that everyone will stay under the new ownership.
Marcus reflected on Relativity TV’s operations over the past few months. “In general it’s been business as usual, certainly it was frustrating at times, it’s challenging when every day your company’s name is in the papers.” He stressed that the legal issues did not impact the company’s pipeline, with all shows produced and delivered on time. He admitted that efforts to sell new projects had slowed down a bit as networks were being cautious while the bankruptcy process was unfolding. Those are expected to get back on track.
On the scripted side, the purchase of the TV assets includes the rights to several Relativity movie titles: CBS drama Limitless (Relativity would “retain the right to receive 10% of producer fees”), Haywire (Relativity receives 50% of producer fees), and Act Of Valor (Relativity receives 10% of producer fees).
The TV operation, the most attractive of the assets that were put on the block in Relativity’s Chapter 11 filing, accounted for 19% of Relativity Media’s $501.1 million in revenues in 2014.
Under terms of the deal for the TV company, the creditors are forgiving a $125 million loan to Relativity in exchange for its television asset. In addition to scripted series Limitless, the TV operation has a number of unscripted series under its umbrella including MTV’s Catfish: The TV Show, Lifetime’s Kim Of Queens as well as Kitchen Inferno, Guy’s Grocery Games, Restaurant Stakeout and The Great Food Truck Race.
Anita Busch contributed to this report.