Sony writes down value of film unit by almost $1B

Sony Pictures logo

Sony Pictures logo

Sony Corp. wrote down the value of its film business by $962 million, The Hollywood Reporter said.

Essentially, Sony said its film business is worth far less than what it listed on its financial books. In accounting that’s known as a “goodwill impairment charge.”

The writedown stemmed from “a downward revision in the future profitability projection for the motion pictures business,” according to a Sony statement quoted by THR.

Sony also said its commitment to the film unit “remains unchanged.” The New York Post earlier this month said Sony “is listening to bank pitches about a potential sale of its film and TV operations.”

Sony has released the past four James Bond films. The company has said it would like to extend the relationship but it has no deal in place with Metro-Goldwyn-Mayer, 007’s home studio.  Under its most recent two-picture deal, Sony co-financed Skyfall and SPECTRE but only got 25 percent of the profits.

At the moment, Bond 25 has no distributor, much less a release date.

NY Post says Sony considers selling film business

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Sony Corp. is “listening to bank pitches about a potential sale of its film and TV operations,” the New York Post reported Jan. 19, citing sources it didn’t identify.

That includes Sony Pictures, whose Columbia brand has released the past four James Bond films. Sony’s most recent two-picture contract to distribute 007 films for Metro-Goldwyn-Mayer expired with SPECTRE.

On Sept. 13, Sony Corp. CEO Kazuo Hirai said in a statement that, “As we look ahead, we see our entertainment businesses as essential parts of Sony.”

The comment was part of an announcement that Michael Lynton, the head of Sony’s entertainment division is departing the company, effective Feb. 2. Hirai is setting up a second office in California “to oversee the management of the entertainment companies,” according to that announcement.

Tom Rothman, a Sony Pictures executive, told the Hollywood Reporter last year the studio is interested in continuing its Bond relationship.

Sony says it won’t sell movie business

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Sony Corp.’s chief executive officer said Friday that the Japanese electronics company is not selling its movie and entertainment business, according to a report in The New York Times.

The Times’ story is mostly about how Michael Lynton is stepping down as head of Sony Pictures Entertainment.

Lynton is departing effective Feb. 2. Kazuo Hirai, the Sony Corp. CEO, will take a more active role at the entertainment unit, according to The Times, including keeping an office at Sony Pictures offices in Culver City, California.

Here’s an excerpt from The Times’ story:

Mr. Hirai also emphasized that the studio was not for sale — a persistent topic of Hollywood speculation — calling movies, television and music “essential parts of Sony.”

Here’s why James Bond fans should care: Sony has released the last four James Bond films. Its most recent two-picture deal expired with SPECTRE. The company has said it wants to continue its 007 relationship with Metro-Goldwyn-Mayer, Bond’s home studio.

For now, MGM has no distribution deal for Bond 25. Under terms of its most recent Bond deal, Sony’s profits were low compared with MGM and Danjaq LLC, parent company of Eon Productions.

The departing Lynton was embarrassed by the 2014 Sony hacks. But he survived, unlike studio executive Amy Pascal. Pascal, in turn, had a close relationship with Barbara Broccoli, the Eon boss. Pascal ended up with a producer’s deal at Sony.

Pascal was a producer of last year’s Ghostbusters movies, which Sony hoped would become a franchise. That’s now considered unlikely after generating worldwide box office of about $229 million.

Will creators be remembered for 2014 comic book movies?

John Romita Sr.'s cover to Amazing Spider-Man No. 121, written by Gerry Conway

John Romita Sr.’s cover to Amazing Spider-Man No. 121, written by Gerry Conway

There’s a spoiler concerning Amazing Spider-Man 2 in the post below.

April 4 is the start of the comic book movie season with Captain America: The Winter Soldier. The presence of SHIELD, Marvel’s spy organization, merits inclusion of the subject here. The film’s arrival raises the question how much recognition those who created the original source material will receive.

Movies made by Walt Disney Co.’s Marvel Studios have settled into a pattern. The comic book creators aren’t included in the screenplay credit. But, for the most part, they show up in the long “crawl” of the end titles. Those who did the original comic story get a “based on the comic book by” credit and later there’s a “special thanks” credit for those who worked on stories the film’s writers used in crafting their story.

Example: the first Captain America film in 2011 had a credit for Joe Simon and Jack Kirby, who wrote and drew the original 1941 comic book. The “special thanks” credit included Kirby and Stan Lee, among others, who did various stories that helped form the final movie.

Meanwhile, movies where Marvel licensed characters haven’t even done that much. The X-Men movies and the 2003 Daredevil movie released by 20th Century Fox never mentioned the comic book creators, for example.

For that matter, DC Comics-based movies only reference comic book creators where Warner Bros. is contractually obligated to do so. So you’ll see Jerry Siegel and Joe Shuster’s names on a Superman film as well as Bob Kane on a Batman film. But you won’t see Bill Finger, Mark Waid, John Broome, Gil Kane or others who did comic book stories that the movies used. Jerry Robinson got a consultant credit on 2008’s The Dark Knight that didn’t say he actually created The Joker.

Which brings us to Amazing Spider-Man 2, which Sony Corp. will release early next month, having licensed Spider-Man from Marvel. The Spider-Man movies released since 2002 do include Stan Lee and Steve Ditko, the original creative team on Marvel’s most successful character.

Gerry Conway, who wrote Spider-Man stories in the 1970s, has taken to HIS TWITTER FEED to let folks know one of his stories — arguably his most important Spidey tale — figures into the 2014 movie.

I see in Entertainment Weekly that Spider-Man 2 is, in fact, based partly on my Amazing Spider-Man 121. Waiting for invite to premiere.

The Los Angeles Times noticed and a post on its Hero Complex blog. Conway’s original story included the death of a major character and there have been hints that will replicated with the 2014 movie.

In any event, many millions of dollars are riding on all this as Disney/Marvel, Sony and Fox all come out with superhero movies this year, with more scheduled for 2015 and 2016. None of those films would be possible without the comic book creators who, for the most part, aren’t with us. The likes of Kirby, Simon, Kane, Finger and others have died. Creators, such as Lee (91) and Ditko (86), are at an advanced age.

Only Stan Lee, with his gift of self promotion, is remembered by much of the population. Outside of comics fans, not many are aware the likes of Kirby, Finger, Larry Lieber (Stan Lee’s brother), Don Heck, Dave Cockrum, Len Wein, Chris Claremont, Herb Trimpe, etc., etc., etc., created the characters that are the foundations of the movies.

It’d be nice if that changed in 2014. But don’t count on it.

UPDATE (April 3): Gerry Conway says on Twitter he has been invited to the premier of Amazing Spider-Man 2.

What if the early 007 films had Marvel-style teasers?

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Thor: The Dark World was the No. 1 movie at the U.S. box office this weekend with an estimated $86.1 million in ticket sales. It also continues the Marvel movie tradition, begun with 2008’s Iron Man, of having a teaser in the end titles for future film adventures.

By now, such teasers occur not only in the films made by Walt Disney Co.’s Marvel Studios. They’ve also become part of movies made by other studios, such as X-Men at 20th Century Fox and Spider-Man made at Sony Corp.’s Columbia Pictures.

So what would have been like if the early James Bond movies had such teasers? It was a different time back then, of course. Still, it might have gone something like this.

DR. NO

After the end titles roll, the screen goes black. We CUT TO:

INT.-DAY-BLOFELD’S OFFICE
BLOFELD, whose face, we can not see, is at his desk, petting his cat. The telephone RINGS and he answers.

BLOFELD
What’s that? Dr. No is dead? How?
(a beat)
Well, that makes me quite displeased. We should take note of this Mr. Bond.

FROM RUSSIA WITH LOVE

After the end titles roll, the screen goes black. We CUT TO:

INT.-DAY-M’S OFFICE
M is at his desk, smoking his pipe. His telephone RINGS and he answers.

M
Hello. What’s that? Unauthorized leakages? Involving gold? But why should it involve my deprtment?
(a beat)
Oh, I see. I’ll get our best man on it at once. He’s due back quite soon.

GOLDFINGER

INT.-DAY-BLOFELD’S OFFICE
Blofeld, whose face we still cannot see, is at his desk, petting his cat. The telephone rings and he answers.

BLOFELD
Yes, Number 2? Ah….splendid. Yes, please proceed. This will be the largest operation SPECTRE has ever undertaken. I am depending on you to make sure it becomes a reality.

Earlier posts:

MAY 2012: THE AVENGERS: THE POWER OF PLANNING

APRIL 2013: THE FAMILY MODEL (EON) VS. THE CORPORATE MODEL (MARVEL)

Sony watch: Company rejects shareholder’s demand

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UPDATE (Aug. 6): Third Point’s Daniel Loeb in an interview with Variety said his relations with Sony are just fine:

In an exclusive interview, Loeb, whose Third Point owns an estimated 7% of Sony, struck a much more conciliatory tone toward the Japanese electronics giant than he’s demonstrated in recent weeks. He praised Sony CEO Kazuo Hirai’s letter to him, calling it “thoughtfully written and detailed in its discussion of profitability and transparency. There was a lot there for shareholders to hang their hats on.”

In response, Nikki Finkke, the editor-in-chief of the Deadline entertainment Web site, wasn’t buying it IN A COMMENTARY. Here’s a partial quote:

So now Third Point hedge fund CEO Daniel Loeb claims today he’s backing off Sony. But only after the putz created chaos and confusion inside a stable and successful studio…Now Loeb will simply retreat to his $45 million penthouse at 15 Central Park West and dream home in East Hampton and not give Hollywood another thought until the next time he feels the urge to kvetch.

ORIGINAL POST (Aug. 5): Sony Corp.’s board rejected a proposal from a major shareholder to sell a piece of its entertainment business, which includes Sony Pictures, the studio that has released the last three James Bond movies.

Sony issued A STATEMENT that reads in part:

Sony Corporation today sent a letter to Third Point LLC following a unanimous vote of Sony’s Board of Directors. The letter outlines that the Board and management team strongly believe that continuing to own 100% of the Company’s entertainment businesses is fundamental to Sony’s success, and that a rights or public offering is not consistent with the Company’s strategy for achieving sustained growth in profitability and shareholder value.

Third Point, led by investor Daniel Loeb, wanted Sony to sell a piece of the entertainment business in an initial public offering. Third Point recently criticized management of the entertainment business for a couple of box-office duds. One prominent Hollywood actor-producer-director, George Clooney, spoke up in Sony’s defense in AN INTERVIEW WITH THE DEADLINE ENTERTAINMENT NEWS WEB SITE.

For now, there’s no real effect on the Bond movies. Sony is slated to release its fourth 007 movie, the untitled Bond 24, in the fall of 2015. Third Point and Loeb presumably will remain a source of tension the management of Sony Pictures. The studio’s big properties in the coming years are Bond 24 and three scheduled Spider-Man movies in 2014, 2016 and 2018.

Skyfall, last year’s Bond movie, sold about $1.1 billion in tickets worldwide. The New York Times reported in May that Skyfall didn’t generate that much profit for the company because Sony was third in line for the proceeds behind Eon Productions/Danjaq and Metro-Goldwyn-Mayer.

Sony watch: investor criticizes movie unit

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A major Sony Corp. investor has stepped up criticism of the company’s movie unit, Sony Pictures, which releases James Bond films.

The hedge fund, in its SECOND-QUARTER LETTER TO ITS INVESTORS, said Sony Pictures, part of Sony’s entertainment business, this summer had “released 2013’s versions of Waterworld and Ishtar back-to-back” with After Earth and White House Down. “From a creative point of view, we are concerned about Entertainment’s 2014 and 2015 slate, which lacks lucrative `tent pole’ franchises. Anecdotally, we understand that its development pipeline is bleak, despite overspending on numerous projects.”

Sony schedule includes Spider-Man movies for 2014, 2016 and 2018 and Bond 24 for 2015. With the Bond films, Sony splits the take with Eon Productions/Danjaq and Metro-Goldwyn-Mayer. Sony has released the last three 007 films, Casino Royale, Quantum of Solace and Skyfall.

Third Point wants Sony to sell a piece of the U.S. entertainment business to the public. The company is considering the proposal.

In the latest letter to investors, Third Point said the entertainment unit “remains poorly managed, with a famously bloated corporate structure, generous perk packages, high salaries for underperforming senior executives, and marketing budgets that do not seem to be in line with any sense of return on capital invested.”

You can view Variety’s take on what all this means BY CLICKING HERE. You can CLICK HERE for Deadline Hollywood’s story.

UPDATE: You can also CLICK HERE for a story in the Los Angeles Times.