Without Kevin Spacey, what’s next for Relativity Media?

For weeks, struggling entertainment company Relativity Media had boasted about the hiring of Kevin Spacey as its studio chairman.

The famed actor’s cachet in Hollywood was supposed to give mini-mogul Ryan Kavanaugh’s film-and-TV business much needed credibility as it exited bankruptcy. After all, Spacey has won two acting Oscars and is credited with reviving the Old Vic theater in London.

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Spacey made a sly reference to the job during an Screen Actors Guild Awards acceptance speech in January, and even appeared in a video presentation during the company’s confirmation hearing in bankruptcy court.

But now, Spacey says he will not join the studio after all, representing a major setback that raises new questions about the company’s plan to exit bankruptcy protection.

“Now that I have a much deeper understanding of the specifics of the amount of work that will be needed to shepherd the company through this transition I have concluded it is work that I neither have the time nor the wherewithal to take on,” Spacey said it a court document filed over the weekend.

Spacey’s production partner, Dana Brunetti, still intends to become president of Relativity Studios as planned once the company emerges from bankruptcy protection, according to a court filing. Spacey said in his statement that he did not want to stand in the way of Brunetti’s opportunity to run Relativity’s studio division.

It was never clear how Spacey, who stars in the Netflix show “House of Cards,” would have been able to fully dedicate himself to the challenging task of reviving Relativity’s film business.

Brunetti, known for his role in producing movies such as “Fifty Shades of Grey” and “Captain Phillips,” said in a declaration that the company has tremendous potential and will begin growing its slate of films and production team.

“I am focused on bringing character driven, compelling stories to the screen for mass audiences and am confident that Relativity is well positioned for success,” he said.

Spacey’s decision to decline the position could complicate U.S. Bankruptcy Court Judge Michael Wiles’ final approval of Relativity’s exit plan. Wiles conditionally approved Relativity’s exit plan in early February, telling the firm it must nail down commitments with Spacey and Brunetti, along with financing agreements.

In a separate filing on Saturday, Relativity attorney Richard Wynne said the company has locked in $75 million in new funding -- a $40-million loan from Midcap Financial Trust and $35 million in convertible debt financing from Relativity backer Joseph Nicholas.

Marni Wieshofer, a managing director at Houlihan Lokey Capital, declared her support for Relativity’s plan and said her assessment of the company’s financial prospects was “not contingent on Mr. Spacey’s personal involvement in the business.”

However, Spacey’s exit adds more ammunition for Relativity’s skeptics, validating some of the concerns voiced by critics including streaming giant Netflix.

The Los Gatos-based company, which has been trying to get out of its license agreement with Relativity, had questioned the nature of Spacey’s and Brunetti’s involvement, along with the feasibility of the company’s plan.

A hearing in the Relativity bankruptcy case is planned for March 18 in New York.

Follow Ryan Faughnder on Twitter for more entertainment business coverage: @rfaughnder

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