At a conference for investors Thursday on the Sony lot, the CFO of Sony Pictures Entertainment outlined a series of steps that includes trimming costs and reducing risk.
David C. Hendler, senior executive vice president and CFO of Sony Pictures Entertainment, said that they were in the midst of trimming $250 million in costs from its operations, including $150 million by streamlining international operations with more joint ventures. He added that they have taken a “hard look at head count” as a way of reducing costs and that another $100 million in reductions is targeted by 2016 via changes in procurement contracts and further reductions in theatrical marketing costs.
He said that a “third party” would be reviewing overhead to “make sure that no opportunity is overlooked.” It was reported earlier this week that the studio had retained Bain & Co. to conduct the review.
He also stressed ways that the studio is mitigating risk, by “pursuing attractive slate financing deals” and more emphasis on generating revenue from media networks, cable and broadcast series. Although broadcast series have traditionally operated in a deficit finance model, Hendler pointed out he focus on “hits with global appeal,” like the new series “The Blacklist” on NBC. Hendler also cited animation, with lower talent production costs, and more worldwide acquisitions of smaller films that can deliver “disproportionately high profits.”
Like Pascal, he also identified “more aggressive profit threshold” for films, as well as penalties for talent who go over budget on their projects.