Ryan Kavanaugh’s Relativity Media and Lionsgate declined to comment last night on ongoing rumours about an impending North American distribution deal.

According to sources the move is likely to happen and would see Kavanaugh’s ambitious company provide a handful of films each year and secure a foothold in the domestic marketplace.

Lionsgate would benefit from steady commercial product flow after it recently scaled back the number of internal productions in order to cut operational costs.

The companies already work together in the international marketplace, where Mandate International handles foreign sales in those territories where Relativity does not have output deals.

It is understood the deal would call for Relativity to pay for P&A costs, which is an increasingly common undertaking for production companies in the current climate. Lionsgate previously released Relativity’s Western 3:10 To Yuma starring Russell Crowe, Christian Bale and Ben Foster.

Relativity recently acquired the genre label Rogue Pictures from Universal and extended its arrangement to co-finance Universal’s slate.