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After a number of failed attempts to buy his way into Hollywood, supermarket magnate Ron Burkle finally made a splash — or at least a small ripple — in the entertainment business.
News broke yesterday that Burkle is acquiring a minority stake in Ryan Kavanaugh’s struggling movie studio, Relativity Media, from hedge fund giant Elliott Management. The sale price is said to be in the “millions of dollars,” according to Bloomberg News, which first reported the deal.
A source close to Relativity said Burkle will get a 25 percent stake in the business. The deal is a mix of equity and debt. Elliott cannot exit its Relativity position all at once and must do so in stages.
Also yesterday, Burkle’s Yucaipa Cos. announced it had created a new unit, Y Entertainment, to house its newly acquired Artist Group International. The booking agency, valued at $35 million, represents musical acts such as Billy Joel and Motley Crue.
Burkle’s wheeling and dealing comes after he lost out on the bidding for record companies Warner Music and EMI, as well as film library Miramax. Some sources suggested that Burkle’s deal for Relativity may amount to little more than some additional marketing dollars for the studio, which has had trouble lining up financing to promote its new releases.
This isn’t the first time Burkle has sunk money into Relativity. According to The Wrap, he invested $200 million in November to help Relativity release “Immortals.” The film was the studio’s best opener last year, taking in $207 million worldwide so far on an estimated $80 million budget.
Separately, sources suggest investment firm Fortress has also taken over Elliott’s interest in the movie distribution joint venture with Universal Pictures, called Beverly 2. The entity was created after Relativity began producing and financing movies, placing it in direct competition with Universal. Fortress declined to comment.