|Budget: $24.1 million||Financed by: Relativity|
|Domestic Gross: $17,368,022||Domestic Distributor: Relativity|
|Overseas Gross: $11,780,202||
Directed by: Jared Hess
Produced by: Ryan Kavanaugh
After emerging from Chapter 11 bankruptcy, Relativity’s first theatrical release was The Disappointments Room — and after a brief three weeks in release, it is playing in just 10 theaters on the day that their next blunder opens “Masterminds“. Back in 2012 Relativity began development on the project with Jim Carrey attached to star, but he dropped out and was eventually replaced by Zach Galifianakis. Production began in the summer of 2014 with an August 14, 2015 release date planned. The release date was postponed to October 9 after Relativity could not come up with the P&A funds to properly market the picture. Relativity’s financial woes led to a Chapter 11 bankruptcy filing on July 30th 2015 and Masterminds was delayed indefinitely.
After the filing, dozens of creditors began attempts to collect whatever money they could from the troubled mini-studio. RKA Film Financing tried to seize the film, along with “The Disappointments Room,” “Before I Wake,” and “Kidnap,” as RKA was owed $85 million from Relativity. RKA also sued for fraud, claiming that CEO Ryan Kavanaugh used their funds, which were only for P&A expenses, for daily Relativity operations.
The bank OneWest loaned Relativity $24.1 million to pay for Masterminds and then tried to demand money from overseas distributors who had the rights. OneWest was forced for legal reasons to stop collections, while the bankruptcy reorganization was in process.
Adding more legal noise to this mess was Netflix, which became tangled in a lawsuit with Relativity, as they wanted to stream Masterminds and The Disappointments Room ahead of any theatrical release, as they were stuck in a contract with the mini-studio forcing them to payout cash for these movies that were rotting on the shelf. The judge ruled in favor of Relativity, saying that the Netflix streaming would impact the theatrical revenue and harm Relativity’s chances with their reorganization.
When presenting their reorganization plan to Judge Michael Wiles, Relativity predicted $125.4 million in revenue over Masterminds‘ lifetime. In a rational world, that should have been laughed out of court and the company set for liquidation, but Judge Wiles approved all of Relativity’s over the top revenue predictions.
The mini-studio dated the delayed Masterminds for September 30, making it the second post bankruptcy release after The Disappointments Room. Relativity had a penny pinching P&A spend for the horror pic, raising concerns that they could not properly fund an adequate marketing campaign, but they fully supported an expensive ad campaign for Masterminds. The movie had $24.11 million in television ads (as per ispotTv) and millions more in other traditional means of marketing, bringing their P&A spend to the $35 million range. Relativity had much riding on the box office performance of Masterminds, as they were still trying to court creditors for a cash infusion, who are wary of the studio’s functionality. The pic received mixed reviews and had little buzz going into release and tracking estimates were pointing to an opening near $10 million. It opened against the expensive pics Miss Peregrine’s Home for Peculiar Children and Deepwater Horizon and came in below its modest expectations with $6,541,205 — placing #6 for the weekend led by Miss Peregrine. As Masterminds tanked over its first weekend, Ryan Kavanaugh put Relativity up for sale and is expected to file for Chapter 7 bankruptcy by the end of the year — making it one of the shortest windows for a major corporation to emerge from bankruptcy and re-enter it. Even after the terrible opening Relativity continued to pour money into marketing and that resulted in a modest 37.6% second frame decline to $4,078,715. Masterminds then fell a steep 58.8% in its third weekend to $1,681,403 and promptly lost most of its theater count. The domestic run closed with only $17,368,022. Relativity would see returned about $9.5 million after theaters take their percentage of the gross.
Overseas distributors were stuck with damaged goods, as they were forced to delay their planned releases of Masterminds until Relativity sorted out their fiscal troubles and released the picture first in the US market. Many distributors were left with a vacancy in their release schedule from having to pull Masterminds in late 2015. The pic cumed just $11.7 million across numerous distributors.