Ryan Kavanaugh, a former Hollywood producer, has recently received $350 million from Ron Burkle to make a movie of his own. The decision will be a huge test for him as he has to prove that his Moneyball formula works on more than mid-level Hollywood movies. So far, he’s hired 25 young producers and a bunch of editing machines. He’s also set up a sports management and music division, which means he’ll need to hire a big-name actor and pay him a lot of money. But if he can replicate this formula in China, it could be a big hit.
Produce the movies
To make the movies he wanted to make, Kavanaugh secured $12 billion in loans from banks. This money would be used to produce the movies. The films would be produced by Relativity, and everyone would receive a cut of the upfront pay. The film makers, too, get a share of the profits, and it’s possible to make more than $3 million from a movie’s overseas presales. You don’t even need to hit number one to turn a profit.
To keep the budgets tight, Kavanaugh has decided to bring back the stock exchange for Hollywood films. The new company he started after Relativity Media went bankrupt is called Proxima Media, and recently partnered with China’s National Arts Studio to create a 100 square-mile ranch. The company’s budget is less than $3 million, but the overseas presales are enough to cover the entire production budget. If you make it to the number one spot on a foreign market, you can still turn a profit.