Ryan Kavanaugh (born December 4, 1974) is an American film financier. He co-founded Relativity Media and served as its CEO, brokering deals between Wall Street investors and major film studios. He credited his risk-assessment algorithm for Relativity Media's initial success. He stepped down as CEO after Relativity Media's second bankruptcy filing and subsequently founded Proxima Media, which held a controlling stake in Triller from 2019 to 2022.
Kavanaugh was born into a Jewish family[2][3] in Los Angeles, California, and raised in the Brentwood neighborhood,[4] where he attended Brentwood High School.[5] His mother is a real estate broker, and his father, a dentist turned businessman, was born in Germany. His father changed his surname to Kavanaugh before his son's birth.[6][7] Kavanaugh began purchasing company shares at the age of six.[8]
Kavanaugh attended UC Santa Barbara and UCLA but dropped out in 1996.[9][10] In 2012, Kavanaugh threatened The New Yorker with legal action for its reporting on him, including its report that he dropped out of university. Kavanaugh said he was "an official graduate of UCLA and currently enrolled in a PhD program at USC". The New Yorker stood by its reporting.[11] While subsequent sources reported that Kavanaugh finished a degree in 2012,[8][12]The Wall Street Journal reported that there was no record of him taking classes at USC.[13]
Career
Early career
After leaving UCLA in the late 1990s, Kavanaugh started a short-lived venture capital firm.[14] Several investors, including Jon Peters, sued Kavanaugh, alleging fraud, and the suits were settled out of court.[15] In a separate suit Kavanaugh was found "clearly negligent", with judgement for the plaintiff of $7.7 million, which went unpaid, as the firm was on the verge of bankruptcy.[16]
Media companies
Kavanaugh next to actress Amy Smart at an event in 2009
Kavanaugh co-founded Relativity Media with entertainment executive Lynwood Spinks in 2003,[17] claiming to have a Monte Carlo-based, risk-assessment model to reliably predict a film’s potential earning.[18][19]Banks and hedge funds, looking for investments outside of the stock market,[6] invested heavily in Kavanaugh’s selected films.[19] He utilized slate financing, which bundled together groups of films to spread the investment risk.[9] Kavanaugh also worked out a formula in which every time a movie was produced through Relativity’s financing, the studio would pay his company and investors in the slate $1 million. Kavanaugh himself would receive executive producer credit to capitalize on the association with the films.[6]
Hailing Albert Einstein as his role model, Kavanaugh was known for writing equations on white boards at investor meetings with hedge-fund bankers and producers.[9][13] In 2005 and 2006, Kavanaugh brokered slate deals Gun Hill Road I and II, which financed 36 movies with Universal Pictures and Sony Pictures.[9] Kavanaugh advertised heavily in the trade press, where he was known for bringing Wall Street money to the studios. However, many investors lost money or received poor returns in several of his deals.[9] In 2007, Kavanaugh sued his partner Lynwood Spinks after a falling-out. The case was settled out of court.[7]
After befriending Elliott Investment Management partner Jesse Cohn in 2007, Kavanaugh closed two deals with the firm a year later.[6][9] Elliott bought 49% of Relativity for about $100 million, which Kavanaugh used to expand the firm, including a deal with Netflix.[6] Kavanaugh also brokered the Beverly 2 slate deal[6] with Universal, in which Elliott agreed to initially invest $500 million and provide partial funding for Universal movies over 7years.[9] That same year, Kavanaugh sued Citibank when it tried to change the terms of a five-year slate deal between Relativity and Sony Pictures; the case was settled out of court following Citibank’s countersuit.[6]
In 2010, Kavanaugh raised investor funds for Relativity Media to launch its own studio,[6][20] producing movies vetted by Kavanaugh's algorithm. Kavanaugh had claimed his model had an 85% accuracy rate, though by 2010, the algorithm had proved unprofitable,[20] with box-office bombs outnumbering commercial successes.[21]
Following Elliott Associates' attempt to retake control of its Relativity investment in 2011,[23][9] Kavanaugh sought an investment from JPMorgan Chase, but the bank did not proceed.[24][9] However, Ron Burkle negotiated a $50 million loan deal with Kavanaugh through his firm, Colbeck Capital,[9][25] and over time, expanded his interest in the Relativity, reportedly buying out Elliot’s stake in 2012.[9][26] In 2016, Kavanaugh stepped down as CEO of Relativity, while continuing to hold a majority of the company’s equity. [27] In 2018, Adam Fields sued Kavanaugh for wrongful termination, and an arbitration judge awarded Fields $8.4 million in damages.[28]
In June 2015, lenders began requiring Kavanaugh to receive approval before making any transactions. In July, Relativity Media filed for bankruptcy. Shortly after the bankruptcy filing,[29] RKA Film Financing sued the company for misappropriating marketing funds, called Kavanaugh a "con man", alleging that he was operating a "scheme to defraud investors", and that Kavanaugh used their invested funds for personal expenses. Relativity Media denied that the money was diverted, saying that RKA Film Financing understood that the money would go into a general corporate account. Relativity Media countersued for $200 million.[8] Kavanaugh and other defendants filed a motion to dismiss, arguing RKA Film Financing failed to state a claim, and the suit was dismissed with prejudice.[30][31]Relativity Media's operations and reorganization remained under the supervision of a bankruptcy court until March 2016.[32]
Kavanaugh eventually stepped down as CEO at the end of 2016 but held onto a majority equity of Relativity Media.[27] Leading up to his resignation, Kavanaugh was absent from the company's offices for weeks and did not take part in executive decisions.[33]
In May 2018, Relativity Media filed for bankruptcy again and arranged to sell all of its assets.[27][34] The United States Trustee's office argued that the bankruptcy seemed to benefit Kavanaugh and the new buyer UltraV Holdings at the expense of Relativity Media's creditors. The trustee learned that Kavanaugh paid himself $2.6 million between April and November 2016 while his company failed to pay bankruptcy fees or file tax returns. They also questioned the legitimacy of Relativity Media's sale to UltraV Holdings since Kavanaugh continued to have extensive access at the company after the bankruptcy filing stated that he had already left;[27][35] UltraV Holdings had quickly rehired Kavanaugh as a consultant for Relativity Media, paying him $10,000 per month.[27][36]
In 2017, Kavanaugh created the film production company, Proxima Media, and was in negotiations with a potential Hong Kong-based partner for funding.[37] Due to the escalating trade war between the US and China, the deal did not go through.[38] In 2019, Kavanaugh announced a cryptocurrency to be used for fractional investing in the platform’s slates, and he and Elon Spar formed Entertainment Stock X (ESX) with Spar as CEO.[39][40] The two settled the case out of court before the filing was completed, and Spar released a public statement saying his earlier characterization of the company was inaccurate.[40] After Proxima acquired a majority stake in Triller in 2019, Kavanaugh co-founded subsidiary, Triller Fight Club.[41]
In 2019, Kavanaugh announced a cryptocurrency to be used for fractional investing in the platform's slates.[42] Kavanaugh was confident that the Jobs Act would allow his platform to operate legally, but securities experts said that the project's inherent risks might increase scrutiny from the SEC.[43][44] To help him develop the company, he tapped Elon Spar, who formerly worked for Cantor Fitzgerald, the owner of HSX. The two subsequently formed Entertainment Stock X (ESX) with Spar as CEO.[40][45]
In June 2019, Spar initiated a lawsuit against Kavanaugh for fraud.[45][46] He argued that Kavanaugh persuaded him to go into business under false pretenses. According to the suit, Kavanaugh had claimed to have hundreds of millions of dollars in capital, but Spar discovered that the company had virtually none. Kavanaugh and Spar withdrew their complaints before the court filing process was completed.[37] Spar then released a public statement saying his earlier characterization of the company was inaccurate.[40]
In 2019, Proxima Media acquired a majority stake in the video-sharing platform Triller.[47] Kavanaugh subsequently co-founded Triller Fight Club, a subsidiary focusing on pay-per-view boxing events.[48] In 2021, Kavanaugh proposed a potential merger with SeaChange International to take Triller public. SeaChange International's filing with the SEC stated that a dog food company controlled by Kavanaugh sponsored three Triller fights and represented about 74% of Triller's accounts receivable in 2021. Triller's attorney disputed the revenue data in the filing, but the merger was later dissolved.[49] As of October 2022, Proxima Media no longer owned a controlling share in Triller, and Kavanaugh was no longer a board member.[49]
In 2011, Kavanaugh married ballet dancer Britta Lazenga.[8][53] In 2015, he married model Jessica Roffey.[54] He has two children.[47] He is a member of the Wilshire Boulevard Temple.[55] According to Forbes, while having been previously featured on their billionaires list in 2013,[47][56] Kavanaugh's net worth fell below $1 billion once Relativity Media filed for bankruptcy in 2015.[57] As of 2020, Kavanaugh had been a regular donor to the Republican Party.[47] After 47 years of living in Los Angeles, California, Kavanaugh expressed his intention to move both his residence and business to Florida due to LA's progressive governance, rising crime and homelessness, and California's perceived anti-business policies.[58][59] In January 2024, Kavanaugh launched a podcast, on which he and his guests discuss personal stories of failure.[60]
Public incidents
Kavanaugh frequently used a personal helicopter for daily commuting.[20][61][62] The resulting disturbance prompted some of his neighbors to submit complaints to state and local officials. When it was revealed that the hotel Kavanaugh used for landing was legally permitted only for emergency landings, a spokesperson for Kavanaugh expressed his intention to stop landing there.[63]
In 2012, Kavanaugh was targeted by an extensive extortion plot that was mainly aimed at business executives, including Harvey Weinstein. The perpetrator sent a letter to Kavanaugh demanding $11.3 million and threatening the lives of his family members.[64] A day after receiving the letter, actor Vivek Shah, who had been photographed with Kavanaugh at an event in 2011, was arrested on extortion charges and eventually convicted to seven years in prison.[65][66]
In 2014, an email thread obtained through the Sony Pictures hack was published, in which Kavanaugh decries the US government's handling of the Gaza–Israel conflict.[67] Among the recipients was Natalie Portman who described the thread as "very disturbing"[68] and complained to Kavanaugh that she did not consent to have her private email address included in the mailing list and wished to be removed. Kavanaugh responded, "Sorry, You are right jews being slaughtered [...] is much much less important then [sic] your email address being shared with 20 of our peers"[67] and continued to include her in the mailing list.[69]
Legal issues
In 2006, Kavanaugh was arrested after being accused of driving under the influence of alcohol (DUI) and being involved in a hit-and-run. All but the DUI charge, which was lessened to a wet reckless charge, were dropped. Kavanaugh was placed on three years of probation, ordered to pay a fine and take counseling and alcohol education programs.[70][7][71] While on probation for his earlier DUI arrest, Kavanaugh was arrested for speeding and drunk driving with a suspended license in 2008. Kavanaugh pled guilty to violating his probation and the other charges were dropped. Kavanaugh then began using a driver.[7][72]
In 2013, Kavanaugh was criminally investigated for potentially impeding the manhunt for Christopher Dorner because Kavanaugh had landed his helicopter on a sheriff's helipad during the manhunt. Prior to the investigation, Kavanaugh had declined to support sheriff Lee Baca's bid for reelection, whose department launched the investigation.[73][74] The investigation was heavily criticized by Kavanaugh and a spokesperson called it a "politically motivated vendetta".[75] The investigation was later closed after it concluded that Kavanaugh had received prior permission to land on the helipad.[76]
Philanthropy
According to former Relativity Media executives, Kavanaugh often pledged large charitable gifts and then billed them to the company. In 2007, Kavanaugh presented Habitat for Humanity with an oversized check pledging $1 million and announced he would become a fund-raising chair for the charity.[12] However, as of 2015, Kavanaugh had not yet donated the promised funds.[77] In 2010, the Board of Governors at Cedars-Sinai Medical Center awarded Kavanaugh its Hollywood Humanitarian Award.[78] In 2011, he received the Anti-Defamation League's Distinguished Entertainment Industry Award.[78][79] Kavanaugh was chairman of the board of The Art of Elysium from 2009 until 2015.[80]
↑"Jewish is the new red". Variety. October 15, 2011. Archived from the original on November 21, 2018. Retrieved March 18, 2014. I always get the question — Ryan Kavanaugh, red hair — but I'm here once again to assure you I'm Jewish on both sides ... until my mom admits she had an affair with the milkman or the mailman I will stay Jewish on both sides.
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