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Sony Turmoil: Top Executive Exodus Continues

Turmoil continues to envelop Sony Pictures’ top executive ranks, begging the question of when and if the current administration can turn around the struggling studio and put an end to the upheaval that has been plaguing its Culver City lot for months.

Sony’s worldwide marketing and distribution chief Jeff Blake, who agreed Tuesday to “step aside” and leave the studio after 22 years, joins the exodus of executives who have spun through the studio’s dizzying revolving door over the past year. Several division heads were fired, including worldwide marketing president Marc Weinstock; home entertainment chief David Bishop; senior VP of media relations Steve Elzer; and Chris Cookson, president of Sony Pictures Technologies. Matt Brown, executive VP, worldwide commercial for Sony Pictures Home Entertainment; executive VP of global communications Ann Boyd; VP of global communications Jason Allen and home entertainment and acquisitions public relations head Fritz Friedman also left.

“The problems don’t go away just by changing marketing and other functions,” said media analyst Hal Vogel. “Sony (Corp.) has had major strategic blunders, and not just in entertainment. It doesn’t look good to investors.”

On the entertainment side, the studio’s leaders have been under a tremendous amount of pressure to reverse the studio’s fortunes, and have been slashing costs, trimming back the movie slate and executing layoffs.

“I don’t think (Jeff’s departure) says anything about the health and well-being of the studio,” said Sony Pictures Entertainment chief Michael Lynton. “We are making a lot of changes and cost-cutting but this was not part of that plan.” He and Sony Pictures co-chair Amy Pascal insist that Blake left on his own accord. But many in Hollywood, both inside and outside Sony, believe that Blake saw the writing on wall and knew his bosses wanted a change.

Pascal has been attempting to bolster the studio’s creative ranks with a number of executive and producer deals. Just last week, Sony upped Doug Belgrad to president of Sony Pictures Entertainment Group. Prior to that, producer Michael De Luca was tapped as production president of Columbia Pictures and former 20th Century Fox co-head Tom Rothman was brought in as chairman of TriStar. Sony is nearing the finish line on a pact with ex-Warner Bros. executive Jeff Robinov, and also recently inked a co-financing deal with LStar Captial.

Recent Sony movies have lacked box office momentum. “Heaven Is for Real” and”22 Jump Street” delivered but “The Amazing Spider-Man 2” did not meet the studio’s hopes for a $1 billion global blockbuster (it grossed just over $700 million) and its most recent releases “Sex Tape” (opening with just $14.6 million) and “Mom’s Night Out” (debuting with $4.3 million) flamed out.

Last year, Sony’s then majority (now minority) shareholder Daniel Loeb voiced his consternation at Sony’s flops, suggesting the company spin off its entertainment assets. Sony Corp. CEO Kaz Hirai told Variety that was not a possibility, however several analysts suggest that may be inevitable.

“There’s a pretty big focus on the M&A side,” said David Bank, an entertainment analyst at RBC Capital Markets. “Wall Street is talking about what the ownership of various properties is going to look like. Who pairs with whom? We certainly weren’t asking that question a year ago and maybe what seemed illogical a year ago is the industry rationale today,” he added.

[This story has been updated.]

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