NEW YORK — Following a landmark vote by shareholders approving him as the first foreigner to lead Sony Corp., Howard Stringer promised to unveil a plan in September to revive the company’s slumping electronics biz.
Stringer told anxious shareholders that he and his newly installed management team are on track to deliver the plan, dubbed Project Nippon, by late September. As part of the overhaul, he said a survey would be conducted this summer of all Sony operations.
“I am first and foremost a Sony warrior,” Stringer told more than 6,000 shareholders packing into a Tokyo hotel for the annual meeting, assuring them that even though he’s a dual British-U.S. national, Sony is his destiny.
Stringer, the former CBS newsman who has headed Sony’s U.S. entertainment arm for the past seven years, led the lengthy shareholder meeting with outgoing Sony chief exec Nobuyuki Idei.
Idei announced he was resigning this spring in recognition that new blood was needed to reinvigorate the troubled electronics biz. It’s no surprise that Idei gave the nod to Stringer; of late, Sony Pictures Entertainment has been the one financial success story for the world’s second largest electronics conglom.
Also Tuesday, shareholders approved the appointment of Ryoji Chubachi as Sony’s new president.
Stringer, who will shuttle between Sony’s New York and Tokyo headquarters, will continue to oversee SPE and Sony BMG Music. No plans have been announced to fill his previous post, Sony Corp. of America chair-CEO.
But given Stringer’s expanded duties, a larger role is seen for SCA chief financial officer Robert Wiesenthal and general counsel Nicole Seligman.
Shareholders made it clear during Wednesday’s meeting that they want to know Stringer’s plan for turning around the company, calling for more open management, more female execs and full disclosure of exec pay.
“I know I cannot use an ax in Japan, but we need change. The world has changed, and we have so many competitors, and we cannot fight battles on every front,” said Stringer.
When running Sony Corp. of America, Stringer put into effect a restructuring plan called Project USA that led to as much as $700 million in savings and cut several thousand jobs.
As chief exec of all of Sony, Stringer is expected to push for making fewer electronics products and taking a more targeted approach. He’s long lamented that Apple was able to beat Sony with the iPod. He also wants to foster increased synergy between Sony’s electronics and entertainment properties.
Merger not lionized
At the shareholder meeting, Stringer defended the $4.8 billion deal he orchestrated last year to acquire MGM as part of a consortium of investors, saying the Lion’s library will add to Sony Pictures’ profits for years to come, as well as bolstering Sony products such as Blu-ray optical discs and the PlayStation Portable game machine. MGM deal raised concerns in Japan over the high price.
Stringer’s new job is likely to make it easier for the U.S. entertainment arm to expand and acquire assets without jumping through as many corporate hoops. The acquisition of MGM, for instance, became a complex transaction involving five partners, largely due to financial trepidation among bosses in Japan.
The long-rumored spinoff of SPE into a separately traded public company may also be easier if and when such a move seems logical.
Shareholders said they had no problem with the fact that Stringer wasn’t Japanese; they just want to see Sony’s stock recoup its losses.
Sony shares have fallen 8.7% since March. In April, the conglom reported that its revenues dipped 4.2% to $16 billion in the quarter ended March 31, with losses widening sharply to $533 million.
For the complete fiscal year ended in March, Sony Pictures Entertainment earned $597 million — well over a third of the company’s $1.5 billion profit.
SPE has posted strong financials since rebounding with “Spider-Man” in 2002.
Currently, SPE is third in studio market share for the first half of 2005, at $449 million. Fox, which last month released “Star Wars: Episode III — Revenge of the Sith,” is in first place with $788 million. Warner Bros. follows with $469 million.
Studio’s biggest grosser so far has been the Will Smith starrer “Hitch,” which took in $178 million in the U.S. Columbia/Revolution’s “Are We There Yet?” and Col’s “Guess Who” both had solid showings, grossing $82 million and $68 million, respectively. Misses so far have been Revolution’s “XXX: State of the Union” and, on a smaller scale, Columbia TriStar’s “Lords of Dogtown.”
(Nicole LaPorte in Hollywood and wire services contributed to this report.)