Less than a month after it was announced that David Bishop would exit as president of Sony‘s Home Entertainment division, his replacement was named today. Man Jit Singh is taking over once Bishop’s contract ends in March, …
In October 2001, then-Sony Corp of America CEO Howard Stringer declared that the network production business “doesn’t make any sense anymore,” effectively closing the studio’s primetime TV division, Columbia TriStar Television. Overall deals were dissolved, executives were let go, and the development slate was trashed in a move Sony projected would save it more that $100 million a year. Sony‘s syndication TV chief Steve Mosko was tapped to head a stripped-down TV unit, Columbia TriStar Domestic Television (renamed Sony Pictures TV in 2002), which consisted primarily of syndication/daytime and modest international operations.
Today, 12 years later, Stringer’s successor Michael Lynton announced that the company will make “a significant shift in emphasis from motion pictures to higher-margin television.” This is Sony’s biggest public acknowledgement to date of the growing significance of its TV business, which has been rapidly expanding during the past decade, mainly under the radar. Sony does not separate its movie and TV revenues, but it has been well known that TV has contributed well over 50% of Sony Entertainment’s operating income for the past couple of years, with some indicating that the TV group’s contribution may be over 60%, especially with the film division going through a rough time. While there have been profit stalwarts, like Wheel Of Fortune, Jeopardy!, Days Of Our Lives, The Young & The Restless and the Seinfeld off-network rights, there also have been new areas of growth. The biggest revenue driver has been Sony’s international TV networks, which have expanded to 127 channels in 150 countries, up from 78 and 83 a decade ago.
As the biggest profit generator likely for the entire Sony Entertainment, the international network group is likely to get the lion’s share of the additional resources the company will be committing to its TV operations, to go toward new investments and growing the existing channels. But TV production also is expected to get a boost. After the bloodbath of 2001, it took awhile for Sony to get back in the network business. The studio took a different approach than the one that got it into financial trouble in the first place — signing a lot of pricey overall deals and spending a ton on development and pilots to support them with little to show for it in terms of on-air series. Burned by the volume network business, Sony forged its way into the then-uncharted world of basic cable original programming with FX’s The Shield, which it distributed internationally, Rescue Me, Damages and Justified and AMC’s Breaking Bad. It gradually returned to network TV with modest hits such as Rules Of Engagement and Community.
UPDATED, 1:50 PM: “We do very much have the ambition about creating a bigger universe around Spider-Man. There are a number of scripts in the works” involving characters and villains in the series, Sony Pictures Entertainment chief Michael Lynton told analysts in a Q&A session wrapping up his operation’s first meeting with investors. But he didn’t offer details, except that Sony is “working closely with Marvel and Disney.” But lest fans of the Marvel world take that to mean that Spider-Man could finally join his buddies in an upcoming The Avengers or other Marvel/Disney film — think again. Sony’s longtime rights deal with Marvel for Spider-Man allows them to exploit any character within the superhero’s universe — including villains, girlfriends or even Aunt May. But Disney, which acquired Marvel in 2009, owns merchandising rights to Spider-Man and those related characters, so any further exploitation would have to involve Disney.
While Sony today promised to hold down costs, especially for films, Lynton says that “we have in no way shape or form lost our commitment to the movie business. The movie business sits at the heart and soul of the company.” And he wouldn’t feel constrained from approving a major project. “We never once found ourselves lacking for capital” when it comes to a needed investment including an acquisition. That also was true when Disney snagged Marvel. With theme parks and several cable channels, Disney has “a few more channels to exploit” the properties. “You have to measure it against that backdrop.”
Sony Pictures CEO Michael Lynton just laid out the new plan to investors as he discussed ambitious financial goals for the company’s entertainment units. That will include “a significant shift in emphasis from motion pictures to higher margin television” production and distribution. The company says that Sony Pictures should generate $8.4B in revenue in the 2015 fiscal year, with at least a 7.5% operating profit margin. In addition, Lynton says that revenues through 2017 should grow at low- to mid-single-digit annual rates, with operating income rising by high-single- to low-double-digit rates. He added that the music segment should report $4.8B in revenues in 2015, growing flat to slightly up through 2017, and a 9.5% operating margin growing by mid- to high-single-digit rates. The film greenlighting process is “more onerous from end to end,” Lynton says. “The times demand that we set a higher bar and we have done just that.” When it comes to dealing with talent, the studio warns that it will now be “saying ‘no’ when in the past we might have said ‘yes’.” Directors will be told that they are “on the financial hook for financial overruns.” When it comes to profitability “we are not satisfied.” In addition to the cost controls, the studio is looking for digital and international opportunities including “content with universal appeal.” It will foster an “innovative entrepreneurial culture” and encourage “creative excellence.” But financial discipline will be “front and center.” He noted that Sony is working with a “third party” — reportedly Bain & Co. — to help find cuts. Lynton also talked up the company’s “One Sony” strategy which includes producing documentaries about Sony Music artists including Michael Jackson, and hiring singer Adele to sing the theme to the James Bond film Skyfall. ”This is our time,” Lynton says. “We intend to seize it…and deliver to shareholders more of the profits that you deserve.”
Daniel Loeb In Retreat: Backs Off Sony For Now With Praise For CEO Kazuo Hirai And George Clooney; But Can He Be Trusted?
Nikki Finke who is on vacation will have a fuller Loeb vs Sony report soon.
Apparently, The Most Hated Man In Hollywood just wasn’t comfortable being labeled “The Most Dangerous Man To Our Industry” by George Clooney for all the world to read (via Mike Fleming’s exclusive Deadline interview and carried by Yahoo this past weekend). So now Third Point hedge fund CEO Daniel Loeb claims today he’s backing off Sony. But only after the putz created chaos and confusion inside a stable and successful studio, destabilized Michael Lynton’s and Amy Pascal’s and Jeff Blake’s management because two summer films After Earth and White House Down bombed at the domestic box office in what is a cyclical business, and imperiled many current jobs and future projects there. It’s disgusting. Not only does he seek to profit from the misfortunes of countries (Greece) and corporations (Sony after Howard Stringer crashed and burned the once great electronics giant), but in this case bullies a major entertainment company to the brink. Now Loeb will simply retreat to his East Coast dream homes and not give Hollywood another thought until the next time he feels the urge to kvetch. Kudos to Clooney for having the balls to hold up Loeb to public scorn. And congrats to Sony CEO Kazuo Hirai for not panicking or pressuring top executives to leave just to appease Loeb. Nice work, too, by producer Lynda Obst who gave a very forceful and cogent defense of SPE on CNBC yesterday. As for Ashton Kutcher and his worthless opinion, let’s see how his career careens when his Jobs indie flops and CBS/Warner Bros no longer pays him to make Two And A Half Men even more unwatchable.
Loeb today did an about-face and claimed to Variety he was backing off Lynton, Pascal, et al: “We support Hirai, and to the extent that he supports his management team and they can meet the board’s initiatives around transparency and profit margin improvement, I see no reason [the current executives] cannot do that. It is a decision for Mr. Hirai to make.” This is after Hirai sent a letter to Third Point (which owns 7% of Sony) and rejected Loeb’s unsolicited proposal to spinoff Sony’s entertainment unit. Suddenly Loeb was calling Hirai’s letter “thoughtfully written and detailed in its discussion of profitability and transparency. There was a lot there for shareholders to hang their hats on.” Loeb also admitted “it is probably unfair to focus on one or two bad movies, just in the way that Third Point from time to time can have one or two bad months or a bad year. … We’re really not focused on individual movies or their slate. I know I mentioned that in the last letter, but at this point it is more productive to support management and the goals advanced by Mr. Hirai in his letter.”
Loeb clearly never counted on being outed by Clooney for “knowing nothing about our business” and dissed so publicly and forcefully and publicly by the filmmaker. Loeb replied: “Notwithstanding the fact that the media likes to create a stir, I admire Mr. Clooney’s passion for Sony and his loyalty to Sony and his friends there.” But Loeb nervily suggested he and Clooney share a “common goal: a more disciplined company with better allocation of capital means less money spent on bureaucracy and more investment in motion pictures. We are all for intelligent investment in creative content. I believe our interests are aligned in a way he probably doesn’t realize.”
Sony Pictures Entertainment‘s Consumer Marketing EVP George Leon announced today it has lined up one of the studio’s largest ever worldwide promotional campaigns to support the July 31st launch of The Smurfs 2. Studio sources tell me the hotly anticipated sequel has $150 million being put up by these tie-ins with 100 corporation and licensee and retail global partners — from McDonald’s to Wal-Mart to Toys R Us to even blueberries. That’s huge dealmaking for Sony Animation family fare that’s not Disney, Pixar, or DreamWorks branded. This 3D hybrid live-action/CG animated global pic was able to build on the success of 2011′s The Smurfs which took in $563 million at the worldwide box office. Many key promotional partners returning from the first film and the second film more than doubling the total number of promotional partners and tripling the total promotional value and marketing support for The Smurfs 2. The hook is to give consumers the ability to ‘live’ the Smurfs brand.
Hollywood never expected The Smurfs to become such a box office phenom. Even though the studio always had confidence in the franchise — and now The Smurfs 3 already is scheduled for 2015. Sure, it’s easy to look down your nose at The Smurfs, but it was taken out of turnaround from Paramount by then Sony Pictures Entertainment Chairman/CEO Michael Lynton, now the Sony America bigwig. Here’s more from today’s overly long announcement:
Les Moonves is out to get Aereo by any means necessary, but he “doesn’t lose sleep over it,” the CBS Corp president and CEO told the Milken Institute’s Global Conference today. “Barry Diller has done what he likes to do, disrupt things,” Moonves added. However, the CBS chief did say that if the situation couldn’t be resolved in the courts, he is more than willing to take CBS to cable. “We can do it in a few days. If we go to cable, if we are forced to, then about 10% of America will not get our signal and I don’t think they will like that,” Moonves said Tuesday. The CBS chief said that with around 2,000 subscribers in NYC, the “illegal” Aereo won’t hurt the network but that he still intends to shut them down. “We will go after them in the courts and if that doesn’t work there are other remedies. There are financial remedies; there are congressional remedies.” On Monday at the conference, IAC CEO Diller said that CBS and the other broadcasters suing Aereo want Congress to save them if their copyright infringement suits fail. Fox and Univision have also threatened to move to cable if Aereo prevails.
New York and Culver City, CA (April 9, 2013) – Michael Lynton, Chief Executive Officer of Sony Entertainment, Inc. and Chairman and Chief Executive Officer of Sony Pictures Entertainment, has renewed his contract, it was announced today by Kazuo Hirai, President and Chief Executive Officer of Sony Corporation.
Lynton joined Sony Pictures Entertainment in January 2004 and, with Co-Chairman Amy Pascal, they put the studio on a path of stability and success across its lines of business. Lynton was appointed to the additional role of CEO, Sony Entertainment, Inc. in 2012, overseeing Sony’s global entertainment businesses, including Sony Music Entertainment, Sony/ATV Music Publishing and Sony Pictures.
While the news about Michael Lynton was already known, some Sony watchers are surprised to see the confirmation that Nicole Seligman will run the main U.S. office in NYC instead of CFO Rob Wiesenthal. He was the guy who used to accompany CEO Howard Stringer to investment banker Herb Allen’s annual mogul-fest in Sun Valley. He will now become President, International for Sony/ATV Music Publishing, reporting to the unit’s CEO Martin Bandier. Although Seligman’s kept herself behind the scenes, the former lawyer for Lt. Col. Oliver North and Bill Clinton in his impeachment trial is a formidable presence at Sony. She’s also extremely well plugged-in. (She was a bridesmaid for her Harvard classmate Carolyn Kennedy when Kennedy married Edwin Schlossberg in 1986.) One question is whether she’s too well connected: Her husband is Joel Klein — the former Justice Department antitrust chief and New York City school chancellor who joined News Corp at the beginning of 2011 and has had Rupert Murdoch’s ear on legal matters including the UK hacking and bribery scandals. Here’s today’s release:
Michael Lynton will be announced as Howard Stringer’s Sony Corp Of America successor next week. “The people who know in Culver City are very happy — and very relieved,” a source tells me about Sony Pictures Entertainment where Lynton since January 2004 has been chairman alongside Amy Pascal. Sony’s principal U.S. businesses include Sony Electronics Inc., Sony Computer Entertainment America LLC, Sony Pictures Entertainment Inc., and Sony Music Entertainment. Sony Corporation of America, based in New York, NY, is the U.S. subsidiary of Sony Corporation, headquartered in Tokyo. The Japan brass would like to base Lynton full-time in NYC but he prefers to stay in Los Angeles because of his family. So that’s still a question mark. Lynton’s promotion has been expected for some time and even more so since Comcast bought NBCUniversal because the Sony exec is close professionally and personally to Brian Roberts and Steve Burke, something the hyper-ambitious Lynton let it be known throughout Hollywood and beyond. My insiders say this job promotion is because Lynton has become a favorite of Kazuo Hirai, who takes over as Sony Corp President/CEO at the start of April. Stringer will retain the chairman title. My insider says, “Hirai who’s very Americanized really likes Michael. He’s his kind of guy because Michael is all business and not flashy.” Lynton already oversees Sony’s movie and TV studio, distribution deals, global production operations, and such. He previously was CEO of AOL Europe and before that headed Pearson’s Penguin publishing company as well as served a brief stint running Disney’s Hollywood Pictures.
But Lynton has a herculean task in front of him. Here’s why: Sony’s U.S. shares have lost more than 36% of their value over the last 12 months. The company is plagued by a feeling that it’s too slow moving and out of touch with consumers, technology, and business. One of the key aspects of the Sony Corp Of America job is ensuring that the corporation’s proprietary technology doesn’t lose out to hardware advancements and content exclusivity. Sony always will be haunted by its Betamax loss to VHS which started the company on a long downward spiral. Since then, the Sony Corp Of America top exec’s marching orders have been to ensure that Sony doesn’t get left out in the cold when the hardware manufacturers and content providers agreed on an industry standard whether for CD, DVD, Blu-ray, 3D or other formats. Problem is, this has meant that even when Sony has had proprietary technology, the company has shared it rather than tried to go it alone again. The result is that the Sony Corp Of America job requires an executive capable of subtle diplomacy and industry respect, and Lynton fits that description perfectly. (On the other hand, he is not shy about his political activism for President Obama and is along with his wife one of the reelection campaign’s top bundlers. And he has used his current gig as a soapbox, most controversially scolding movie theaters for making Americans fat by selling unhealthy concession snacks.)
Combatting current trends won’t be easy. Apple, not Sony, controls tablets and music players. Amazon, not Sony, dominates e-readers. And Microsoft, not Sony, is No. 1 in game consoles while Sony angered
Andrea Wong Tapped As President Of Int’l Production At Sony Pictures TV & President International At Sony Pictures Entertainment
EAfter a year and a half away from the spotlight, Andrea Wong is rejoining the executive ranks with top international positions at Sony Pictures Entertainment. The former CEO of Lifetime, who had been rumored for virtually every high-profile TV executive job that became available in the past 18 months, has been named President of International Production for Sony Pictures Television and President of International for SPE. She will be based in London.
In her SPT position, Wong will head the studio’s international TV production business, reporting to SPT president Steve Mosko. She will oversee SPT’s 15 owned and joint venture international production companies. Wong will shepherd the development of new formats as well as the local adaptations of SPT-owned formats, primarily on the unscripted side. The studio’s library of reality formats, which was boosted by the 2008 acquisition of Dutch company 2waytraffic, includes Who Wants To Be A Millionaire?, Dragon’s Den and Pyramid. Additionally, SPT has been setting up local versions of its daytime talk show Dr. Oz and some of its library sitcoms, including The Nanny, Married … With Children and Everybody Loves Raymond. It was Wong’s successful tenure as head of alternative and late-night at ABC, where she developed such hit franchises as The Bachelor, Dancing With the Stars and Extreme Makeover: Home Edition, that was key in landing her the SPT job, which is skewed heavily towards reality. “Andrea’s business acumen and her role in developing successful unscripted programming like Dancing With the Stars and The Bachelor make her a perfect fit for SPT,” Mosko said.
Wong replaces Kees Abrahams, who is stepping down as president of international production for SPT. Abrahams, former CEO of 2waytraffic, had been overseeing SPT’s international production operations since 2waytraffic’s acquisition. “Kees’ entrepreneurial spirit has been instrumental to the growth of our television production business internationally and we thank him for all of his efforts,” Mosko said. Added Kees, “I think it is now time for me to pursue some new commercial opportunities, and I wish Sony well.”
EXCLUSIVE: Ron Howard directed and produced both of Sony Pictures’ films based on Dan Brown’s bestselling novels, The Da Vinci Code (in 2006) and Angels & Demons (2009). Now I’ve learned that the Imagine Entertainment principal will not be …
Sony Pictures Entertainment chairman/CEO Michael Lynton and co-chairman Amy Pascal have released this statement, acknowledging the studio was hit by hackers who’ve breached their system and come away with user passwords and other data:
“The cybercrime wave that has affected Sony companies and a number of government agencies, businesses and …
Sony Pictures and MGM have finally announced the worst kept secret in Hollywood. They’ve reached an agreement that will return Sony Pictures to its role as distributor of the James Bond movies. Sony, along with studios like Warner Bros, Paramount and Fox, all engaged in talks with the reconstituted MGM on a deal that came at a hefty price. Deadline reported previously that MGM walked away with the right to be co-financier on several plum Sony films, including the David Fincher-directed The Girl With The Dragon Tattoo, as well as others to be added to the mix, including the remake of Total Recall. The latter film might be particularly painful for Sony because sources tell us that MGM gets to distribute Total Recall in the highly valuable international TV market. This is considered a huge benefit to MGM in that it enhances the value of its international TV portfolio and robs Sony’s existing international TV partners of a title that is expected to be big overseas. Neither Sony nor MGM would comment on the horse-trading part of the deal.
Clearly, Sony wanted the Bond franchise back badly, and now Amy Pascal and Michael Lynton have brought 007 back into the fold. Deadline reported last summer that MGM was being reconstituted as a pure production play and shedding its distribution operation. That immediately put the studio’s most valuable title, 007, in play. Bidders began mobilizing before MGM made it out of bankruptcy. By January, several of the studios vying for Bond rights became increasingly frustrated by the attempts by MGM’s new chiefs Gary Barber and Roger Birnbaum to leverage 007 distribution rights to get co-financing rights to plum projects at whatever studio won the deal. This came even after MGM had offered the villain role to Oscar-winner Javier Bardem, a courtship that is still going on (Anthony Hopkins has also been rumored as a potential participant on the evil side of the Bond dossier). Sony Pictures eventually got the upper hand and moved close to a deal in early February, after Sony threw co-fi rights to Dragon Tattoo and other titles into the pot. The announcement doesn’t deal with other MGM titles, but there are expected to be more that get distributed by Sony Pictures, which separately partnered with the studio on the Kevin James-starrer The Zookeeper. That film moved over to Sony when MGM went into deep freeze because of its crushing debt burden, and Sony moved it to the heart of the summer, with a July 8 release date. While Sony was winning that deal, rival suitors like Paramount (which has a strong relationship with Barber and Birnbaum over Star Trek) bristled at MGM’s asking price, plus a relatively low 8% distribution fee on the 007 film that Sam Mendes will direct and which Sony will release November 9, 2012, with Daniel Craig reprising. Here is the official announcement: