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Michael Lynton Exits Sony Pictures Entertainment to Become Chair of Snapchat

UPDATED: Sony Pictures Entertainment Chairman and CEO Michael Lynton announced Friday that he is stepping down from the entertainment conglomerate to focus his attention on his chairmanship of Snap, Inc., the social media owner of Snapchat in which he has a major investment.

Lynton is leaving his post atop the conglomerate’s motion picture, television and music units but will remain on as co-CEO for six months to help lead a search for his replacement. The announcement of the departure said Sony Corporation CEO Kazuo Hirai will focus with Lynton on the search for a new leader, with the Japanese businessman taking on a much higher profile in the operation. He will serve alongside Lynton as co-CEO of Sony Pictures Entertainment and open a second office for himself on the Culver City lot.

Among those rumored to be in line for Lynton’s post: DreamWorks Animation founder and former CEO Jeffrey Katzenberg, Tribune Media president and CEO Peter Liguori and Jim Gianopulos, recently ousted as chairman and CEO of Fox Filmed Entertainment. Two sources close to Gianopulos said, however, that there had been no contact between him and Sony.

Another possibility floated late last year: that the Tokyo-based conglomerate would merge the troubled entertainment unit with its more profitable gaming division. That would potentially put Andrew House, the boss of Sony Interactive Entertainment, in charge of the film and television studio.

“It has been an extraordinary 13 years and an honor to work at Sony with some of the most talented and creative people in the entertainment space,” Lynton said in a statement. Explaining his move to the tech upstart he added: “I have been involved with Evan and Snapchat since its early days, and given its growth since then, decided the time was right to transition and focus on my role as Chairman of the Board of Snap Inc.”

The Harvard-educated Lynton was a respected leader in Hollywood, but his regime suffered multiple blows, particularly the 2014 hack of the studio’s computers that led to a series of embarrassing revelations about internal operations. Motion picture co-chair Amy Pascal lost her job following the scandal and workers from top to bottom of the organization were unsettled by revelations in the emails.

More recently, Sony’s Motion Picture Group has struggled to find box office winners, with a string of under-performing films, including “Ghostbusters,” “Inferno,” and, most recently, “Passengers,” the sci-fi romance, starring Chris Pratt and Jennifer Lawrence.

The studio’s Motion Picture Group has also seen turmoil under the leadership of its chairman, Tom Rothman. More than a dozen executives complained about Rothman to either Lynton or the company’s Human Relations department. They said Rothman was a micro-manager and a caustic presence.

The studio’s top financial official, Andrew Gumpert, left Sony and soon took a job at Paramount Pictures. And other executives were said to be unhappy and planning to move, when other positions became available.

Rothman also has his supporters at Sony. They say that he has cracked down on profligate spending and insisted on top performance and quality control — creating high expectations that were much needed. After the complaints arose last year, the motion picture chairman got a vote of confidence from Lynton and from Hirai.

Lynton and his supporters focused on more successful segments of the entertainment operation Friday, including a television unit that has taken advantage of the heightened demand for original series by fielding shows to cable and streaming outlets, as well as the broadcast networks. It’s biggest hit in recent years has been the ABC comedy “The Goldbergs,” which is starting to return syndication profits to the studio. It also has a global success story in the fantasy drama “Outlander,” which airs domestically on Starz and has blossomed into a juggernaut in its third season.

Other notable shows from the studio at present include ABC’s “Shark Tank” and “Dr. Ken,” NBC’s “The Blacklist,” and it upcoming spinoff, CBS’ “Kevin Can Wait,” AMC’s “Better Call Saul” and “Preacher,” Netflix’s “The Crown” and “One Day at a Time” and Amazon’s “Sneaky Pete.”

The studio underwent a management shift in TV last year when Steve Mosko stepped down after nearly 15 years at the helm. Lynton restructured the division to divide power among programming/production chiefs Jamie Erlicht and Zack Van Amburg, international networks head Andy Kaplan, international program sales chief Keith Le Goy and Amy Carney, President, Advertiser Sales & Research.

Lynton was also proud of upgrades he led at the Culver City facility, allowing Sony to eliminate expensive and inefficient off-lot leases. The work included creation of Jack and Harry Cohn buildings to house the growing TV and networks businesses and construction of the eight-story Akio Morita building. The latter was completed in November of last year, allowing further integration as Sony Music and Sony/ATV Music Publishing moved on to the lot for the first time.

A statement from Hirai praised Lynton’s performance, saying he had made “broad structural and management changes,” while acknowledging that considerable work needs to be done to get the film business back on its feet. He said the film business needs “set the path for restoring profitability and future growth, though we recognize current challenges in motion pictures business and its turnaround will take some time.”

Though there have been rumors for years that the Japanese company might at some point give up its entertainment assets, Hirai gave a vote of confidence for the operations. “As we look ahead,” he said, “we see our entertainment businesses as essential parts of Sony, and I look forward to working with Michael towards a smooth transition.”

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