Relativity TV Sold at Auction for $125 Million to Senior Lenders

Court documents show stalking-horse group reduced bid amount to solely purchase television assets

Relativity Media

A stalking-horse group of Relativity Media’s senior lenders won the studio’s successful television division at auction this week, taking Thomas Forman’s department for $125 million.

The amount is half of what was expected from the lenders — Anchorage Capital, Falcon Investments and Luxor Capital — who had entered a $250 million bid in August for all of Relativity’s bankrupt assets, including film and music.

“The amendment reduced the Stalking Horse Bidder’s $250 million credit bid for substantially all of the Debtors’ assets to a $125 million credit bid for the purchase of only the Relativity television business,” documents said. “The Debtors intend for the remainder of the Debtors’ assets to form the basis of a plan of reorganization.”

Relativity TV — which has hits like MTV’s “Catfish: The TV Show” and CBS’ scripted drama “Limitless” —  brought in a $96.6 million in revenues in 2014, and has managed to exceed projections since the company’s bankruptcy filing, earning $22 million in the last two months.

While the stalking-horse group has consistently expressed a “vested interest” in all the assets, one individual familiar with the group’s thinking told TheWrap they consider the TV assets the “crown jewel” in the studio’s portfolio. Forman’s division might also fit nicely with other entertainment companies in the senior lenders’ portfolios; Anchorage has a major stake in MGM.

As TheWrap reported Thursday, company chairman and CEO Ryan Kavanaugh made a stunning comeback in the bankruptcy process — having ironed out a new deal to reclaim all of his studio minus the TV property.

Kavanaugh has assembled a group of friends and previously interested investors to help him recapitalize the remainder of his nine-year-old baby: Ron Burkle and his Yucaipa Investments, Elliot Management and Catalyst Capital — which nearly helped Relativity avoid bankruptcy back in July with an infusion of cash that was thwarted when the senior lenders in the stalking-horse group exercised an option to acquire the majority debt.

It’s currently unknown how much capital Kavanaugh has raised, nor if it will be enough to sway the approval of the court. Sale terms go before U.S. Bankruptcy Court Judge Michael Wiles on Monday in New York.