Tom Rothman’s Top Priorities at Sony: Control Costs, Make Peace

Sony Pictures Entertainment endured a corporate tsunami last winter on the scale that few Hollywood players have ever faced, after its inner workings were laid bare by hackers.

By picking Tom Rothman, 60, an exec who approaches business and life with hurricane-force intensity, to run the studio, Sony’s leadership is unleashing another round of disruption in Culver City.

The surprise appointment by SPE chief executive Michael Lynton is intended to forsake the status quo, rein in costs and create more movie franchises to compete with rival studios. Rothman’s elevation is also expected to roil Sony’s executive suite and on-lot producers, and could potentially strain relations with some top talent.

The safe bet in the days leading up to Rothman’s ascension was that Sony would tap Doug Belgrad, the well-liked motion picture group president, to succeed ousted studio chief Amy Pascal. But Rothman’s prior experience co-running Fox Filmed Entertainment, and his track record of shepherding global blockbusters such as “Avatar,” “Titanic” and “X-Men” to the bigscreen, pushed him ahead of the pack.

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Before being promoted to chairman of the motion picture group, Rothman was given the blessing of Kazuo “Kaz” Hirai, CEO of parent Sony Corp. Lynton quietly negotiated with Rothman, making the decision final over this past weekend, according to Sony insiders.

Lynton told confidants that he wanted an executive who had already shown the ability to work with multiple production labels and turn out blockbusters, while maintaining tight control over expenses. Sony’s early-morning announcement highlighted the $40 billion in box office and 150 Academy Award nominations that Fox generated during Rothman’s tenure.

“Really what it is, is sculpting the financial risk to the potential creative upside,” says Rothman. “You need to be financially prudent, but creatively ambitious.”

Lynton had heard concerns over Rothman’s sometimes tense relationships with top directors and stars, but in the year since Rothman arrived on the Sony lot to run TriStar Pictures, he has worked with such talent as Meryl Streep and George Clooney with no apparent strain, according to one Sony executive.

But along with Rothman’s champions come a host of critics, who have complained about being micromanaged and hounded. At Fox, Rothman was such a hands-on executive that one former colleague said privately he virtually produced every movie the studio made. While he wrestled expenses into submission, he also ground down representatives of actors and directors to cut their fees.

Rothman conducted a famously fraught relationship with Neill Blomkamp, the director of Sony’s upcoming release “Chappie” as well as the studio’s “Elysium” and “District 9.” When Rothman was at Fox, the two men battled over “Halo,” and Blomkamp was taken off the project. Calling Fox “crappy,” the filmmaker vowed to never work with the studio again. How that will impact a reunion with Rothman at Sony remains unclear.

Rothman also had an email indiscretion revealed in Sony’s November hack. The leaked missives show him poking fun at Will Smith’s children and their home schooling, based on an interview they gave the New York Times. Smith’s Overbrook Entertainment is housed at Sony, but the star has recently been seeking partnerships at other studios.

Sony’s travails predate the cyber-attack. It ranked sixth among studios in 2015 box office share as of mid-February, according to Boxofficemojo.com, and finished fourth in 2014, with a 12.2% share, behind leader 20th Century Fox, at 17.3%.

In May 2013, Sony’s then-biggest shareholder Daniel Loeb sent a series of letters to Hirai, castigating Lynton and Pascal for the studio’s low profit margins and profligate spending. Loeb, an investor in Variety parent Penske Media Corporation, slammed the Sony duo for a lack of “discipline and accountability.”

Industry observers have speculated for years that the Japanese parent company would unload its troubled American studio. But Hirai, who was in L.A. over the weekend for the Academy Awards, has signaled no intention to downsize or spin off the company’s entertainment assets.

Lynton appears to see in Rothman the kind of hard-charging dynamo who can shake up the studio and lift it out of its funk. When Rothman took over Fox’s film division with Jim Gianopulos, he inherited a studio with bare cupboards and without many major franchises. He’s in a similar situation at Sony.

After “The Amazing Spider-Man 2” faltered at the B.O. last summer, the studio essentially had to wave the white flag and form an alliance with Marvel, the superhero’s creator, in the hopes of reinvigorating the series. Sony is also attempting to reboot “Ghostbusters” without the original stars — an approach that carries risk.

Rothman must navigate a studio arms race dominated by a handful of superpowers, including Warner Bros. and Disney, which boast top-shelf comicbook series or animation brands, leaving other players struggling to keep pace. The kind of tentpole films needed to compete in this landscape are very different from the midbudget dramas and comedies that Rothman said he would focus on making when he joined Sony in 2013 to relaunch TriStar.

Success won’t just demand a keen eye for the next big thing. It will also require Rothman to play the unfamiliar role of company peacemaker. He will have to forge trusting relationships with Belgrad and production chief Michael De Luca, both of whom were passed over for his job. And he’ll have to muster the kind of diplomatic skill that doesn’t always come easily, but is required to keep Sony’s top producers, including Pascal and former Warner Bros. exec Jeff Robinov, happy.

Justin Kroll contributed to this report.

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