A new profile of Hollywood cash wunderkind Ryan Kavanaugh takes folks behind the curtain at Relativity Media, the deep-pocketed enterprise that has a stake in a growing number of studio products around town. Sony and Universal are well-known as Kavanaugh's most frequent partners, with others signing up as fast as they can while their own money trees wilt in the recession heat. (Relativity last year even bought its own genre label, Rogue Pictures, off Universal.) The profile's set-up is kind of hilarious, featuring Ron Howard himself hanging out in the lobby awaiting a meeting with Kavanaugh (Brian Grazer must have hit traffic or be allergic to Relativity's foam ceilings), but it's what's happening elsewhere in the office that might be worth a closer look.
Esquire hopped into the high-tech hamster wheel where Kavanaugh's staff digests numbers -- big numbers with many zeroes that used to be the domain of studios themselves. Now, however, with projects reportedly flowing in by the dozen and risk-averse lots looking for anyone they can find to share the cost of building a release slate, Relativity has devised a proprietary formula to know just whether or not Ron Howard should have even made the trip to West Hollywood in the first place:
[A project is] fed into an elaborate Monte Carlo simulation, a risk-assessment algorithm normally used to evaluate financial instruments based on the past performance of similar products. Enough variables are included in the Monte Carlo for [Relativity] to have reached the limits of their Excel's sixty-five thousand rows of data: principal actor, director, genre, budget, release date, rating, and so on. After running the movie through ten thousand combinations of variables (in marathon overnight sessions), the computers will churn out a few hundred pages that culminate in two critical numbers: the percentage of time the movie will be profitable, and the average profit for each profitable run. The computers will also calculate the best weekend for the movie to be released, whether Russell Crowe will earn his salary or Sam Worthington will be good enough, and the box-office effect of an R rating versus PG-13.
Sounds like something right out of Moneyball, right? (Hell, Moneyball's recent adaptation woes probably stemmed from little more than feeding Steven Soderbergh's name into the software.) And yet even with 65,000 rows of data bursting Excel's binary seams, Relativity still went in on Evan Almighty, Land of the Lost and Cirque du Freak. What gives? "Outliers," of course, which sounds a lot like a fancy term for William Goldman's enduringly quotable (and accurate) axiom that "Nobody knows anything" -- not even Excel:
When the computers favorably assessed Land of the Lost, they didn't factor in our sudden collective fatigue with having Will Ferrell yell at us. When they ran the numbers for 300 -- a movie about an ancient battle waged between mostly naked men starring nobody famous set against a blood-soaked, computer-generated backdrop framed by a cult graphic novel -- they couldn't have bargained for anything like its eventual worldwide gross of more than $450 million.
Hmm. It's weird, but isn't this the kind of rationalization piece we usually see about moguls right before a long, slow, ugly tumble? Think Harvey Weinstein, Harry Sloan, Philippe Martinez. Sure, Kavanaugh has proven that the discriminating apportionment of $2 billion pays off in nickels (Public Enemies), dimes (The Ugly Truth) and crisp dollar bills (Paul Blart: Mall Cop -- Kavanaugh gleefully admits he's "not in this for the art"). But if Universal can hardly buy a hit this year, and one modest success it did buy, Bruno, wasn't even Relativity's, when does it become more of a political game than a numbers crunch? I mean, the guy had Ron Howard waiting in his lobby while Kavanaugh attempted to broker a book option in his office. The whole thing smacks of "too big to fail" -- it has for a while now -- and yet does anybody have a back-up plan just in case? This is the movie business we're talking about, after all.
ยท Ryan Kavanaugh Uses Math to Make Movies [Esquire]