Sony to discuss movie studio budget cuts at Thursday meeting
Sony Corp. will address the state of its embattled movie and television studio in a five-hour meeting for investors Thursday morning at the Sony Pictures Entertainment lot in Culver City. The company is expected to discuss planned budget cuts at the studio, which could result in layoffs.
The studio has had a tough year, hurt by the poor performance of several big-budget movies, including the Will Smith sci-fi flop “After Earth.” Sony Pictures recorded an operating loss of $181 million for the company’s fiscal second quarter ending Sept. 30.
The disappointing box office run and poor financial performance has drawn the attention of activist shareholder Dan Loeb, who in May proposed that Sony make an initial public offering of a portion of its entertainment arm and has criticized management for being ineffective. Loeb’s company, New York-based hedge fund Third Point, owns about 7% of Sony.
A representative of Third Point is expected to attend the meeting, which will feature Sony President and Chief Executive Kazuo Hirai.
The Los Angeles Times reported Monday that Sony was eyeing $100 million or more in budgets at Sony Pictures, and has hired consultancy Bain & Co. to examine the studio’s expenditures. Bain, a Boston management consulting firm, is known for its ties to former presidential nominee Mitt Romney, who served as its CEO in the early 1990s.
Sony’s hiring of Bain is expected to be addressed at the meeting for buy- and sell-side investors.
ON LOCATION: Where the cameras roll
Michael Lynton, the chairman and chief executive of Sony Pictures, and Amy Pascal, the studio’s co-chairman, are also slated to speak at the Thursday event, called Entertainment Investor Day, according to the Tokyo-based company’s website.
The gathering is not open to the public, but will be shown live in a webcast on Sony’s website.
Other Sony executives slated to speak at the event are Steve Mosko, president of Sony Pictures Television; Doug Morris, chief executive of Sony Music Entertainment; Masao Morita, chairman of Sony Music Entertainment Japan; and Martin Bandier, chairman and chief executive of Sony/ATV Music Publishing.
In August, Sony rejected Loeb’s proposal that the company should make an initial public offering of up to 20% of its entertainment arm, Sony Entertainment Inc., which includes the studio, Sony/ATV Music Publishing and Sony Music Entertainment.
Lynton is also the chief executive of Sony Entertainment.
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