Just when it seemed like things were finally settling down for Sony Pictures Entertainment, a new wave of uncertainty washed over the Culver City lot this month with the news that CEO Michael Lynton would step down later in the year.
Lynton’s departure was not a shock to studio insiders, but there was surprise initially over the timing of the Jan. 13 announcement. Sony Corp. has said it will search for a successor while Lynton remains at the helm as co-CEO. Kaz Hirai, the Tokyo-based CEO of the electronics conglom, is heading to Culver City next week to take the reins with Lynton. He’s setting up a temporary office at the studio to oversee a thorough vetting of candidates and what is expected to be an equally thorough review of the studio’s operations.
The urgency in that process was magnified by Monday’s disclosure that Sony will take a whopping $962 million write-down of goodwill on the studio. The announcement included what is becoming a familiar assertion by Hirai: that Sony has no intention of selling its studio arm, despite the fact that CBS Corp. and other suitors are known to have expressed interest in the studio in the past few years.
There has been speculation about Lynton’s plan to move on for more than two years, underscored by information that surfaced from private emails revealed as part of the devastating November 2014 cyberattack on the studio. The timing of Lynton’s departure seemed to become clearer over the weekend, with the massive write-down Sony’s admission of how badly their studio investment has fallen short of expectations.
Without a deliberate succession plan in place, Sony has been awash in speculation about who might be the new boss. Peter Liguori, the former Fox Entertainment and FX chief who has spent the past four years as CEO of Tribune Media, was an immediate focus of attention. Liguori was quietly named as an advisor to the Sony Corp. board last fall. That appointment struck studio insiders as odd. It’s part of a push by Hirai to bring more entertainment-savvy advisors into the Tokyo boardroom.
Liguori’s announcement last week that he will be stepping down from Tribune in March fueled more chatter about his potential segue to the top job in Culver City. But sources close to the situation say Liguori is not seen as a front-runner for Sony job, at least not yet. Lynton is said to be helping Hirai compile a short list of candidates to pursue. Former Disney COO Tom Staggs is rumored to be high on that list. Other names circulating include former 20th Century Fox chief Jim Gianopulos and former Fox Networks Group CEO Tony Vinciquerra. Tom Rothman, Sony’s current motion picture group chairman and the former partner of Gianopulos’ at Fox, is not expected to be a contender for the top Sony entertainment job and even his roost atop the film studio is considered less secure, given the departure of Lynton.
A Sony spokesperson said that the transition process has only begun and that no candidates have yet been interviewed.
One entertainment executive who is following the Lynton succession process closely said Sony’s interview process will be a two-way street, with the most desirable candidates looking for assurances that the Japanese electronics giant is deeply invested in it’s entertainment wing. “They will want to know how committed they are to the business and to capitalizing the business going forward,” said the executive, who asked not to be named discussing another company’s internal machinations. “They will want to know if Sony is really positioning the studio for growth.”
That said, the executive said he believes Hirai is sincere in his saying he wants Sony to stay in the entertainment business. The source attributed the constant rumble about a sale of Sony Pictures Entertainment to outsiders who would like a shot at acquiring the asset. “They’re stirring the pot to try to get some action going,” he said.
Meanwhile, Lynton’s lame-duck status is making for some uncertainty around high-level decision making. On the TV side, the departure last June of longtime president Steve Mosko spurred a restructuring in which the heads of four divisions reported directly to Lynton. With Lynton’s pending departure, there’s a feeling that there’s “no sheriff in town,” according to an industry source who works closely with Sony TV, if conflicts should arise among worldwide TV production heads Jamie Erlicht and Zack Van Amburg, international networks president Andy Kaplan, distribution chief Keith Le Goy and Amy Carney, head of advertising sales and research.
The various components of the TV group have long operated with great autonomy, sometimes at the expense of potential synergies. After Mosko’s exit, there was talk of seeking greater cooperation among the units, not only in TV but among other divisions. That process is harder without knowing who the ultimate boss will be.
A Sony spokesperson rejected the idea that there would be a lack of clarity in the TV operation, with Lynton’s impending departure. Lynton remains available to give the television executives counsel, and to make decisions when needed, during the six months interim period when he will serve as co-CEO with Hirai, the spokesperson said.