Sony’s Cycle of Constant Crisis: Exec Exits Only the Latest in Continuing Turmoil

Sony Pictures Executive Turmoil
ALEX FINE for Variety

The resignations last week of two high-profile division heads — Sony TV chairman Steve Mosko and Motion Picture Group president Doug Belgrad — underscore the continuing turmoil and never-ending drama at Sony Pictures Entertainment over the past several years.

From a long string of costly movie flops to the agitation in 2013 of activist investor Dan Loeb and the unprecedented November 2014 hack of Sony’s computer networks, studio insiders have felt buffeted by “bad news on top of bad news,” in the words of a veteran senior exec.

The exits of studio vets Mosko and Belgrad will bring even more scrutiny to the management of SPE under CEO Michael Lynton, who shuffled execs on the film side early last year. SPE co-chairman Amy Pascal was forced out due to a combination of problems in the movie division and after her embarrassing, racially charged emails surfaced in the hack. The transition to Pascal’s successor, former Fox film chief Tom Rothman, has been stylistically jarring for many executives on the studio’s Culver City lot.

Sony Shuffles: From Left: Sony Pictures Entertainment chief Michael Lynton; former Motion Picture Group president Doug Belgrad with Motion Picture Group chairman Tom Rothman; former TV chairman Steve Mosko Ap Images/Rex Shutterstock

Sony Pictures ranks last among the major studios in domestic box-office market share for the year to date, with 6.5% as of June 5, according to Box Office Mojo.

Despite the studio’s struggles, Lynton’s contract was extended last year. In addition to the Hollywood operations, he also oversees Sony Music.

Sony insiders say the departures of Mosko and Belgrad had been brewing for some time. “Our industry is rapidly evolving and we need to change with it,” says Lynton. “We firmly believe these changes will strengthen the studio moving forward.”

Lynton’s response to Mosko’s departure was a testament to the increasing importance of television to SPE’s bottom line. Instead of tapping a single successor as TV chief, Lynton will now have four top execs reporting to him — a sign that the CEO wants to become more deeply involved with the business that has contributed 60% or more of the studio’s earnings for most of the past five years.

“The television side is very important to Sony and has been a source of earnings stability and productivity,” says media
analyst Hal Vogel.

Through all the upheaval and spilling of red ink on the movie side, television had been the bastion of creative stability at Sony. The division’s shows make money and win Emmys, and its far-flung operations around the world generally run smoothly.

But Sony Pictures TV is now in for its own shakeup following the June 1 disclosure by Variety that 24-year Sony vet Mosko is leaving as chairman after nearly 15 years at the helm. Sony’s announcement of the new structure emphasized that the goal was to more “fully integrate” the TV operations with the rest of SPE. Mosko was well-regarded as a deal-maker and leader who galvanized his staff at low moments such as in the immediate fallout from the hack. But he also ran SPT as a fiefdom, with “total autonomy,” in Mosko’s own words. In a Q&A June 2 at the Paley Center for Media, Mosko offered as an example the fact that Lynton had big doubts about the viability of drama series “Breaking Bad” before it went on the air at AMC in 2007, but he didn’t block Sony TV from producing the show.

Even within the TV division, the international operations — distribution and Sony’s worldwide networks operation — rarely interact with the U.S.-based team. Under the new structure, programming co-presidents Zack Van Amburg and Jamie Erlicht now oversee worldwide production, with London-based international production head Andrea Wong reporting to the duo. And distribution has consolidated under former international sales chief Keith Le Goy, with U.S. distribution president John Weiser now reporting to him.

B.O Shares Suffer
Sony is last among the Big Six studios in year-to-date domestic box office share.
31.2% Disney
19.1% Fox
10.9% Warner Bros.
8.3% Universal
7.6% Paramount
6.5% Sony/Columbia
16.4% Other

The goal is to have the teams work more closely together at a time when Sony is increasingly investing in the production of shows that originate outside the U.S. A case in point is the new anthology drama “Electric Dreams: The World of Philip K. Dick,” which has one of Sony TV’s top showrunners attached, “Outlander” exec producer Ronald Moore, with Bryan Cranston on board to star. The series was ordered by the U.K.’s Channel 4. Aligning with Channel 4 allowed Sony to land a straight-to-series order, and afforded leeway in the creative aspects of the show that it might not have gotten from a U.S. network.

“In general, studios are shifting toward a global executive management structure,” says Jason Squire, professor at USC School of Cinematic Arts. “It’s certainly happened with movies. That’s the growth part of the industry. At the top, you find people who are comfortable with a global view.”

Sony TV has been forced by prevailing industry trends to operate with a scrappy, entrepreneurial mindset because it does not have the benefit of being corporately aligned with a major network. Under Mosko, Sony TV built a lean-and-mean team with a strong track record. The studio had an impressive upfront showing last month, landing five new series in a year when networks were laser-focused on ownership. Sony TV has to cut the networks in as co-producers or profit participants, but still had the goods to land three of the best time slots in primetime for dramas “Timeless” (NBC), “Notorious” (ABC) and comedy “Kevin Can Wait” (CBS).

Van Amburg and Erlicht are primed to take on more responsibility with Mosko stepping down. It’s no secret Mosko chafed at the perceived lack of respect for the television division — something that became a source of tension with Lynton.

Meanwhile, in the film operation, Rothman replaced Belgrad with one of his own picks, Sanford Panitch. Rothman recruited the executive from Fox, where they both previously worked, bringing him to Sony in June 2015 as president of International Film & Television.

The exit of Belgrad, who had been at Sony for 26 years, could make things more fraught internally as Sony veterans adjust to Rothman’s hard-charging management style. Belgrad was seen as a steady and even-keeled force at the studio. And Pascal, while demanding, was praised for being solicitous with her staffers and for having a warmer personal style. Rothman is known for being more controlling and obsessive about details. He pores over media coverage, and is prone to firing off emails at all hours, as well as marinating in the minutiae of a few favored films, picking over their marketing and distribution strategies.

It’s no secret Mosko chafed at the perceived lack of respect for the television division — something that became a source of tension with Lynton.

Rothman’s full creative influence on Sony’s slate has yet to be seen. The studio fell behind most of its major competitors last year, weighted down by duds such as “Pixels” and “Aloha” that were greenlit under Pascal.

Two of the films that Rothman greenlit during his previous tenure as head of Sony’s Tri-Star label, “The Walk” and “Ricki and the Flash,” also flopped. While current release “Money Monster” is no blockbuster, the George Clooney and Julia Roberts financial thriller is a relative success that could make a profit. “The Lady in the Van,” an arthouse success, was developed by Tri-Star, but distributed by Sony Pictures Classics.

The Sony films that Rothman has approved begin to hit theaters in December, with the debut of “Passengers,” a Jennifer Lawrence and Chris Pratt sci-fi romance. Going forward, the executive has stressed the need to find new franchises and movies that play well with foreign audiences, leading Sony to get behind an adaptation of Stephen King’s “The Dark Tower,” a “Jumanji” reboot, and sequels to “Bad Boys” and “Blade Runner.” The scale of the projects and Rothman’s vision for Sony’s future has made some executives feel more confident. Pascal’s final years had a rudderless quality. He’s also pushing to keep the James Bond distribution rights at Sony, where they have been for the past four 007 films, though other studios, such as Warner Bros., are circling the franchise, which is controlled by MGM and Eon Prods.

All in all, Rothman and Sony find themselves at a competitive disadvantage. Disney and Warner Bros. have cornered the market on comic-book films thanks to their ownership of Marvel and DC Comics, respectively. At the same time, Comcast is poised to become one of the heavyweights in family entertainment with its recent acquisition of DreamWorks Animation.

After years of stability in TV, the one thing for certain with the post-Mosko structure is that there will be some adjusting to the new world order without a single dominant boss. And on the film side, the revolving door of executives makes its battle at the box office against Disney and larger rivals that much harder.