October 12, 2011 / 11:05 PM / in 7 years

Relativity studio boss faces dilemma with "Immortals"

LOS ANGELES (TheWrap.com) - Whatever happened to Ryan Kavanaugh?

The affable mogul who seems to be followed by a nimbus of doom-sayers has disappeared.

He doesn’t take calls, doesn’t answer emails and generally can’t be found. He is not to be seen in any of the usual industry watering holes. He’s not at the Chateau Marmont or Soho House and except for a brief appearance this week to accept the American Defamation League’s SuperJew award, is entirely absent from public view.

It’s no coincidence, of course.

Kavanaugh is waiting for a deal to close in which JP Morgan would buy out the Relativity stake currently held by Elliott Investments. This deal has been in the works since late May, after TheWrap broke the news, and Kavanaugh has been MIA ever since.

As we reported then, tension had grown between the young mogul and his financial partner, and Kavanaugh wanted to exercise a clause allowing him to get Elliott out of the deal. JP Morgan would be leading a consortium of investors to buy about $700 million of Relativity.

Shortly after this news leaked, Relativity spun off its $600 million finance fund with Universal to be run by Elliott. That was presumably to be run by Michael Joe, who left the company in June, but is now believed to be keeping the lowest of profiles in the most obscure of Elliott offices in Los Angeles.

As for Kavanaugh? We can only presume someone told him to keep it on the very, very down low.

The void of silence has been filled with the usual round of rumors and nay-saying, usually peppered with phrases like, “he’s finally played his last card.”

The weak opening of Relativity’s “Machine Gun Preacher” hasn’t helped.

But schadenfreude aside, that’s not the reality. The true test of the studio’s fate lies in November with “Immortals,” the big-budget, swords-and-sandals epic directed by the uber-stylish Tarsem Singh. (Tarsem also got to direct Relativity’s other big bet, “Snow White.”)

The movie cost upward of $100 million, and it has to perform.

But here is Kavanaugh’s dilemma. If “Immortals” is a huge hit, Elliott may decide that it likes the movie business after all and make it very difficult for Kavanaugh to switch partners.

And if “Immortals” tanks, then JP Morgan may decide it does not quite believe the complicated spread sheets that demonstrate how Kavanaugh manages to always make a profit even when his movies don’t. The quiet suggests to me that the deal is underway. Relativity wouldn’t comment. Elliott never does. But that doesn’t mean nothing is going on.

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