Overture Films, the 3-year-old independent movie studio owned by John Malone's Liberty Media, is shutting down after it failed to fetch an adequate price from interested buyers.
The company will no longer produce movies, and its marketing and distribution operations are being taken over by Relativity Media, putting Ryan Kavanaugh's production company in a segment of the business dominated by Hollywood's major studios.
Relativity is hiring 43 Overture employees, including marketing chief Peter Adee and distribution executive Kyle Davies. That team will for now stay in Overture's offices in Beverly Hills and market and release the studio's three remaining movies — actor Philip Seymour Hoffman's directorial debut "Jack Goes Boating"; the thriller "Stone," starring Robert De Niro; and horror picture "Let Me In" — through the new distribution arrangement with Relativity.
Among Overture's remaining employees, 20 will be laid off with severance packages, and three will move over to parent company Starz, which also owns video distributor Anchor Bay Entertainment and animation company Film Roman.
Overture's library of fewer than 20 films will continue to be sold on DVD, pay TV and broadcast TV by Anchor Bay by Anchor Bay and other Starz units.
"Starz channels and Anchor Bay will still be able to acquire the pay-TV rights to theatrical pictures," said Chris Albrecht, president and chief executive of Starz, which also owns the Starz pay cable channel. "But, we no longer needed to operate our own film production and distribution organization."
Albrecht, the former head of HBO, who is focusing on building Starz into a bona fide competitor in original programming, also said that the ownership of Overture's three unreleased movies "remains with Overture and its partners and there is no transfer of ownership of Overture's library."
Like several other independent movie companies that have shut down after succumbing to difficult economics brought on by declining DVD sales and a glut of titles in the market, Overture has struggled to survive. The studio's mixed track record included the hit thriller "Law Abiding Citizen" and the horror-film flop "Pandorum."
Three weeks ago, Overture CEO Chris McGurk and chief operating officer Danny Rosett were forced out. They tendered their resignations after reading an e-mail from Albrecht accidentally sent to them and other Starz executives that said they would be removed.
For the last six months, McGurk and Rosett had been trying to find a buyer for Overture after Malone made it clear he had lost his appetite for the movie business and wanted to sell the company. They attracted two bidders, brothers Alec and Tom Gores and Los Angeles-based private equity firm Aurora Resurgence. But the offers weren't high enough to warrant a deal, according to a person familiar with the situation.