CEO Kazuo Hirai denies rumors that H'wood assets are on block
Our studio is not for sale — that’s the message sent Tuesday by Sony Corp. topper Kazuo Hirai, who took the unusual step of issuing a statement denying the persistent rumors that the Sony Pictures Entertainment operations are on the block.Hirai’s remarks mark the company’s first official attempt to quash the rumblings that have dogged Sony in recent months. “There is absolutely no truth to rumors that Sony’s entertainment businesses are for sale,” Hirai said. “As I said at our strategy meeting in April, Sony is comprised of electronics, entertainment and financial services businesses, and our entertainment companies have a stable business foundation and are poised for future growth. There is no reason to sell these industry-leading businesses and no consideration is being given to the idea.” Sale rumors have grown louder over the last few months as Sony Corp. has suffered from weak financial results, in part related to the earthquake and tsunami that devastated Japan last year. Sony has cut back on pic production and plans to slightly reduce its development slate. It has no new pics going into production during the next two months. But while a dearth of production is unusual for a major, it’s not a definite indicator of liquidity issues, as production budgets are often cyclical and tied to issues other than cash at hand. Knowledgeable financial observers also point out it would be unusual for Sony to sell the studio at a time of decreased activity. Sony has been aggressively seeking outside financing since its co-financing arrangement with investor Elliott Management ended this year. The studio has pacted with fund Hemisphere on a small group of titles, but the studio has not yet found a backer on the scale of what it once had.