Ryan Kavanaugh May Make Believers out of Hollywood Yet

For most of the last five years, it seems, Hollywood’s favorite game has been handicap when – not if – Ryan Kavanaugh would come crashing down. Kavanaugh, who runs Relativity Media, is the 35-year old wunderkind who raised more than $8 billion from private equity investors since arriving on the scene in 2005. His company finances most of the movies made by Universal Pictures (GE) and several by Sony Pictures (SNE) as well.
But Relativity has also been quietly becoming a production studio in its own right, and this weekend seems to have hit the big time. Its romantic drama Dear John scored big at the box office, generating a larger than expected $32.4 million opening weekend that made it the first film in nearly two months to knock Jim Cameron’s 3D space epic Avatar from the top rung of box office performers.

For Ryan Kavanaugh critics, and Hollywood is crawling with them, this can’t be good news. The whisper campaign has been that Kavanaugh is all show and now go, that he has used smoke and mirrors to make his numbers look good, and that investors would soon be lining up to sue the financier.
Well, folks, is doesn’t look like that’s going to happen anytime soon. His slate deals with Universal and Sony have had both winners (Universal’s It’s Complicated) and losers (Sony’s The International) but no more or less than any other fund in town. But what Ryan Kavanaugh has right now is a bone fide hit. And, whether he’s saying it or not, odds are that he’s plenty happy to make some people eat their words.

Dear John, which stars young actors Channing Tatum and Amanda Seyfriend in a young love tear-jerker of a couple who find one another before an army soldier ships out, is among a group of films that Relativity is making on its own. (It’s a separate business from its financing of so-called “slate deals” with Universal and Sony.) And Dear John proved to be a huge hit with young women under 21, according to exit polls. Better yet, it was made for around $20 million, meaning that Kavanaugh and his investors will see some heady profits from the flick.

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