EXCLUSIVE: Joe Nicholas, Relativity Media’s financial backer from Chicago who helped the struggling company out of bankruptcy by pumping millions into it, is said to have stepped down as its co-CEO. A person close to the company said the change happened on Friday; we will update with more information as we receive it. Nicholas shared the title with Ryan Kavanaugh, the long embattled executive who has been struggling to keep the company on its feet. Neither Nicholas nor Kavanaugh returned calls/correspondence.
Word of the corporate change comes as Kavanaugh has decided to try to sell the company which has been circling the drain after suffering through two failed films and an exodus of key executives. Kavanaugh has reportedly hired EMP Media Partners and Zolfo Cooper to help him try to unload it.
Relativity emerged out of bankruptcy in April, hopeful to get back in the game financially but they have not made any significant inroads: They launched two films since that time — The Disappointments Room which opened to only $1.4M on roughly a $15M budget and Masterminds which collected a mere $6.6M this weekend after many stops and starts on the release schedule. Relativity was unable to open Masterminds despite its strong cast of Zach Galifianakis, Kristen Wiig, Kate McKinnon, Leslie Jones, Jason Sudeikis and Owen Wilson. The company previously told the bankruptcy court that it anticipated $125.4M in lifetime revenues from the film against $78,346 in distribution costs.
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The company has two more movies on its release schedule this year — Kidnap with Halle Berry and Before I Wake starring Kate Bosworth.
As of late, Relativity has been trying to make its debt payments schedule, but has been struggling to do so. Whether Kavanaugh will be able to unload Relativity is questionable; it does have the Netflix deal, which is considered the one major asset.
Nicholas is founder and chairman of HFR Group LLC, a Chicago company that analyzes hedge fund.
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