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Ryan Kavanaugh Explains His Leap Back Into Hollywood With a Big China Deal

Ryan Kavanaugh is back. The movie financier-producer — once a media darling turned pariah after his Relativity Media ended up in bankruptcy, twice — swore three years ago he was leaving Hollywood and never coming back.

Turns out he changed his mind. (Hollywood often has that effect on people.) Always one to zig when others zag, and by anyone’s measure one of the most charming salesmen Hollywood has ever produced, Kavanaugh is back with a new company called Proxima and a big deal he says is worth $250 million to make American films in China.

Which is weird enough, since this news arrives just as China and the U.S. are in the midst of a massive trade war and as movie coproductions involving the two countries have stagnated for at least two years.

With relations between the two world powers at a low ebb, Kavanaugh said he’s found a point of entry in Hong Kong, the former British territory now under the authority of Beijing but with a Western-style approach to business. Hong Kong wants to get on the map as a cultural hub, and a recent adjustment to Chinese regulations allows movies made there to be distributed in China without regard to any quotas on overseas content.

Also Read: Ryan Kavanaugh’s New Company Announces $250 Million Injection for US Film Production

I spoke to Kavanaugh by phone on Thursday after he’d spent a day touring the China’s National Arts Studio, a physical studio boasting a 100-square-mile ranch an hour from Hong Kong in which he said he’s becoming a 25% stakeholder.

He was joined on his tour by Carrie Lam, a politician who has served as Hong Kong’s chief executive since 2017, to negotiate what terms the government would give the studio to help catapult it to premiere tourist status, providing infrastructure and other incentives to boost plans for a major theme park.

“We’ll have a studio for the first time that doubles as a home where you can make a $100 million movie from beginning through postproduction that will cost 30% less than shooting anywhere else,” Kavanaugh said, with his trademark excitement over a new deal on the horizon.

He said that movies shot in Hong Kong, even fully American productions, now fall outside the 34-movie quota for U.S.-made films. “If it’s a Hong Kong-based production, it falls out of quota. It’s automatically accepted as a Chinese production. Any movie we make there, because it’s based in Hong Kong, it’s accepted in the Chinese system,” he said. “That saves money for the Americans, creates jobs for China, creates production revenue in China and American revenue by means of the box office and other windows. Everyone wins. Amidst this crazy trade war, this is a way that everyone can win.”

Also Read: Ryan Kavanaugh Files $50 Million Suit Against Ex-Relativity Exec Over ‘Misleading’ Arbitration Leak (Exclusive)

A lot has happened since Relativity threw in the towel to bankruptcy three years ago. Harvey Weinstein, the industry’s other swashbuckling maverick, has been disgraced (and awaits a criminal trial). Disney and Fox have merged and become an overwhelmingly dominant force in the studio system. Netflix has become a behemoth. Independent studios like Open Road have failed. The flood of Hollywood executives going to China three and four years ago has slowed to a trickle.

There is less room for a charming rogue like Kavanaugh in a new Hollywood dominated by corporate number-crunchers and big tech. But Kavanaugh has a knack for convincing people, particularly those with deep pockets, to follow him. And while a lot of people have announced plans in China that never came to pass, he’s as convincing as he’s ever been that he’s going to make it work this time.

As for coming back to Hollywood? Not really, Kavanaugh said: “I have put a great team together. I don’t deal with agents. I don’t go to premieres. I won’t be on set. I won’t take credits.”

He added: “I won’t be in ‘the scene.’”