Highflying mini-mogul Ryan Kavanaugh is turning to a respected Hollywood celebrity to revive his struggling movie studio.
"House of Cards" star Kevin Spacey and his production partner Dana Brunetti are set to join Kavanaugh's Relativity Media in a surprising development for the entertainment company that has been in bankruptcy since last summer.
Relativity said late Wednesday that it has entered an agreement to acquire Los Angeles-based Trigger Street Productions, the company owned and operated by Spacey and Brunetti, though Kavanaugh's firm did not say what it is paying for Trigger Street.
Spacey will become chairman of Relativity Studios — the film unit of Relativity Media — and Brunetti will be the unit's president, starting in mid-February. The pair will "oversee all creative content and film production for the company," Relativity said in a statement.
Relativity declined to comment beyond its news release announcing the deal, and neither Spacey nor Brunetti were made available for interviews.
The reputations of Relativity and Kavanaugh have taken a major hit from the bankruptcy after court filings listed Relativity's liabilities at nearly $1.2 billion and its book value at $560 million. Many in Hollywood have wondered how the flamboyant chief executive would get the financing to continue to make and release new movies.
But the recruitment of Spacey and Brunetti could bring the enterprise a sense of much-needed credibility as it prepares to put out delayed pictures, such as the Halle Berry thriller "Kidnap" and the Zach Galifianakis-Kristen Wiig comedy "Masterminds."
Spacey, 56, has won two acting Oscars, one in 2000 for "American Beauty" and the other in 1996 for "The Usual Suspects." He is also credited with reviving the famed Old Vic theater in London, a two-century-old institution that he ran for 11 years starting in 2003.
Trigger Street's production credits including the Netflix drama "House of Cards," the 2015 Universal Pictures hit "Fifty Shades of Grey" and the 2013 Oscar-nominated Tom Hanks film "Captain Phillips." The popular "House of Cards," in which Spacey plays the power-hungry politician Frank Underwood, began streaming on Netflix in 2013 and is expected to premiere its fourth season in March.
Spacey's appointment would not be the first time that an entertainment company has turned to a powerful celebrity-turned-executive to boost its business. Metro-Goldwyn-Mayer and Tom Cruise famously rebooted the storied United Artists in 2006, but that venture fizzled after releasing movies like "Lions for Lambs" and "Valkyrie," which both starred Cruise.
Nonetheless, the announcement of Spacey's new role at Relativity raised eyebrows among movie business executives. Spacey appeared to acknowledge the challenges ahead for his new company. In a statement, he said "this move with Relativity will be proof for some that we really are crazy," but he also expressed excitement for "this next evolution" in his career.
"Having run an independent production company to now be able to run a studio is a great challenge, and I've learned that in the end it's the risk takers that are rewarded," Spacey said.
His task won't be easy. Beverly Hills-based Relativity Media filed for Chapter 11 bankruptcy protection in July after failing to pay down a mountain of debt compounded by a string of box-office failures. The company made a name for itself co-financing movies like "The Social Network" and "Bridesmaids," but more recently released bombs such as "Out of the Furnace."
The process of getting the studio back on its feet has made for one of the most closely watched bankruptcy sagas in Hollywood history. Kavanaugh has sparred publicly with financial partners while fighting to raise money and keep control of the company he founded in 2004. Relativity sold its relatively vibrant television division to a group of lenders last fall for $125 million, leaving Kavanaugh to restructure the rest of the company.
A court hearing is set for Feb. 1, when Relativity hopes that Judge Michael E. Wiles will confirm its plan to emerge from bankruptcy protection. The studio is planning to release movies including "The Disappointments Room," "Before I Wake" and "Kidnap."