Sony Rejects Entertainment Spin-Off in Letter to Third Point's Daniel Loeb

Sony Rejects Entertainment Spin-Off in Letter to Third Point's Daniel Loeb

After a unanimous vote, the company's board of directors says it will keep its entertainment division, which is "critical to its corporate strategy." Sony's board of directors voted unanimously to reject the notion that it should spin off its entertainment business, and it sent a letter Monday explaining its position to Third Point, the investment vehicle of Daniel Loeb. OUR EDITOR RECOMMENDS Daniel Loeb Vs. Sony: 5 Things to Expect Next What Tom Rothman's TriStar Move Means for Sony Pictures (Analysis) Sony Swings to Profit, But 'After Earth' Drags Down Film Unit The letter sets out several reasons to keep Sony intact rather than split it up, as Loeb has been loudly advocating. Sony's control over the entertainment business drives internal collaboration, the board says, with content increasingly valuable as it is consumed more and more on the kinds of digital gadgets Sony makes. RELATED: 5 Things to Watch in as Daniel Loeb Takes On Sony Sony also argues that it has the necessary capital resources to fund its business plan and that if it should need more it can do so without selling off assets. Read the entire letter below: Dear Mr. Loeb: Thank you for your letters. We welcome the opportunity to exchange views with our shareholders, and we appreciate that you have shared your perspectives. We agree with the statement in your May 14, 2013 letter that Sony has “one of the most prestigious entertainment businesses in the world.” Your investment in Sony has increased the market’s focus on our entertainment businesses, which we welcome. Since your first letter on May 14, 2013, the Board of Directors and management team, with the assistance of external financial and legal advisors, have thoroughly considered the merits of your proposal for a rights or public offering of 15-20 percent of our entertainment businesses. Our external financial advisors have met with you and heard your views in more detail. While we share with you the objectives of increasing profitability and driving shareholder value, after careful review, the Sony Board of Directors has unanimously concluded that continuing to own 100% of our entertainment business is the best path forward and is integral to Sony’s strategy. We do, however, expect to increase disclosure regarding Sony’s entertainment businesses. We agree this can help market participants analyze their performance and monitor their success. I have been a part of the Sony family for nearly 30 years, the last year being my first as CEO. I have witnessed Sony’s long history of innovation and our passion to create groundbreaking products, content and services that inspire and excite our customers all over the world. During my tenure as CEO, we have made many changes, and we are encouraged by our progress and the opportunities ahead as we continue to execute on our One Sony strategy. Our strategy includes a commitment to: • Further strengthen profitability in the entertainment businesses. Sony Pictures and Sony Music are critical elements of our strategy and fundamental drivers of Sony’s growth for the future. We expect that our strategy will result in strong growth and increasing profitability through investing in high-growth, high-margin businesses, particularly in television production and international networks. In the Pictures business, we are aggressively investing in our global television production business, with 32 new and returning TV series on air in the US this year, including 15 new series in 2013-2014, the most ever for Sony. We continue to invest in our attractive, high-growth worldwide networks business. Indeed, we have grown revenue in our worldwide networks business from approximately $600 million in the fiscal year ended March 31, 2008 to $1.5 billion in the fiscal year ended March 31, 2013. We are also building upon our diversified film slate strategy, and expect to continue to explore the use of slate financing when it is advantageous to us. We are very focused on increasing margins at Pictures, including through the growth initiatives described above, and by reducing costs. While we believe our theatrical marketing costs have been and continue to be in line with our competitors, and that our margins are generally comparable to some other major studios, we recognize that our margins should be higher. In the year since I became CEO, we have driven growth and profitability in our entertainment businesses, and during that time we have taken additional steps to tighten controls and reduce costs. For example, in the past year we have undertaken a rigorous cost savings initiative, including structural changes, that we expect to generate significant annual savings at Pictures over the next few years. We have also instituted an even more exacting “green light” process for film production, focusing more intensively on overall slate profitability as well as per film returns-on-investment. Our Music business continues to be profitable with margins we believe are generally in line with peers. We are nurturing and developing new talent, exploiting our vast catalog and copyrights, and exploring other growth opportunities, including leveraging our vast music content for use with increasingly popular digital music service platforms. We continue to seek cost reductions and pursue operating efficiencies. Finally, our executive compensation arrangements at Pictures and Music are tied to the performance of their business. We believe this aligns incentives for the executive management teams at Pictures and Music, specifically by linking compensation to financial performance. Pictures and Music are critical to Sony’s corporate strategy and will be essential drivers of our future growth. Many of your observations regarding our entertainment businesses, and in particular Pictures, are not consistent with the businesses I know. I am personally involved in the oversight of these businesses and firmly committed to assuring their growth, to improving their profitability, and to aggressively leveraging their collaboration with our electronics and service businesses. • Revitalize our electronics business. While the industry environment for our electronics business remains challenging, we have made significant progress over the past year, and we are confident that we are on the right path. We have accelerated structural reforms through our global business operations, as well as portfolio realignment, including divestiture from non-strategic businesses, and allocating capital to areas of focus. We have also released powerful new products that appeal to consumers globally. As you mentioned in your recent investor letter, our Xperia series smartphones have been very well received in Japan and Europe, and this momentum is expanding internationally, while our Cyber-shot RX1 won the prestigious Camera Grand Prix 2013 as the best new camera in Japan. We are also encouraged by the positive feedback from the announcement of the PlayStation 4, which is highly integrated with our leading networks and mobile businesses. The transformation of our television business has been progressing as planned. We are investing in Mobile, Imaging and Game, and these business units are inextricably linked to our One Sony strategy. • Continue financial services’ steady contribution. We expect the financial services business to continue to deliver highly dependable financial products and services, and maintain its high customer satisfaction ratings. Through these efforts, the business is expected to achieve stable and growing profitability and reinforce the power of the Sony brand. • Achieve our growth and profitability goals. We believe that a continued focus on steady execution will allow us to achieve the financial targets we set at the beginning of fiscal year 2012. Specifically, for fiscal year 2014 (ending March 31, 2015), we are targeting consolidated sales and operating revenue of ¥8.5 trillion, an operating margin of more than 5% and a return on equity of 10%. For the electronics business, for fiscal year 2014 we continue to target sales and operating revenue of ¥6.0 trillion and an operating margin of 5%. The Board and management team strongly believe that continuing to own 100% of our entertainment business is fundamental to Sony’s success and that neither a subscription rights offering nor a public offering is consistent with our strategy for many reasons. These include: • Demand for content is increasing its value in a dynamic industry environment, and we believe our entertainment businesses will increasingly benefit from these trends. We are in an extraordinary industry environment, where we believe the emergence of new distribution platforms, the proliferation of powerful mobile devices, and near-ubiquitous broadband access will continue to spur increasing demand for premium content at unprecedented levels. We believe Sony is well-positioned to drive value from our global content assets in this exciting environment and, thus, we believe our shareholders will benefit from owning all, rather than a part, of these valuable assets. • Full control of our entertainment businesses drives internal collaboration, facilitates synergies, and allows us to be more nimble. Content, technology, and consumer and professional products are rapidly converging, not diverging, and we therefore expect the interplay between our entertainment and electronics businesses only to increase in size and form over the coming years and to help drive the growth of Sony’s electronics business. We observe this trend in many of our businesses, and especially in our Mobile business, where a rapidly changing landscape demands flexibility, timely decision-making and speedy execution. We also see this in the increasingly strong linkage between Sony Pictures and our Professional Solutions Group within our electronics business, in particular in focus areas such as 4K television, professional equipment, and digital production systems. These are only examples. We believe the many opportunities for collaboration in this regard are only increasing, and a rights or public offering would put obstacles in our strategic path, creating the need for otherwise unnecessary and burdensome arm’s length intercompany relationships and for consideration of minority shareholder rights, thereby limiting our control and strategic flexibility. • There are alternative sources of capital available, should Sony require it. We believe Sony has adequate capital resources to fund our business plans. Our entertainment businesses have used their cash flow to fund and invest in their businesses, and their cash flow has not been utilized to fund other businesses. Should management determine that Sony requires additional capital, there are more efficient sources available to raise the approximately $2 billion of capital you have suggested raising through a rights or public offering. Should we require capital, or in the event of unanticipated events, our priority would be to raise it without selling a portion of an asset fundamental to our growth strategy, and without unnecessarily burdening Sony’s ability to execute our business strategy for both entertainment and electronics. • We can achieve increased disclosure regarding Sony’s entertainment businesses without a rights or public offering. We agree with you, other shareholders and a number of analysts that there may be advantages to providing more disclosure about our entertainment businesses, but we believe a rights or public offering is not required to provide such disclosure. We believe that providing additional disclosures will help investors better analyze the performance of these businesses. Starting in the second fiscal quarter of this year, we expect to include quarterly revenue figures for certain categories within the Pictures and Music segments, as well as certain other metrics. We also expect to include, on a quarterly basis, necessary information to enable investors to calculate adjusted earnings before interest, taxes, depreciation and amortization for each segment, including Pictures and Music. Finally, we plan to host regular meetings with our entertainment management team to assist investors and other market participants to improve their understanding and knowledge of our entertainment businesses. Sony’s Board and management team fully understand that the industries in which Sony operates are challenging, fast moving and competitive, and as a result we are very focused on avoiding obstacles that may hamper alignment among our businesses. We believe Sony is already changing for the better, and we are encouraged by the opportunities that lie ahead as we aggressively pursue our One Sony strategy. We remain committed to pursuing sustained growth in profitability and shareholder value, so that we can meet and exceed the expectations of all of our stakeholders. We thank you for your commitment to Sony and will continue to give full consideration to any constructive feedback from our valued shareholders. We look forward to maintaining a productive relationship with you and welcome an ongoing dialogue.



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Find out why Bollywood these heroes should pair up for a buddy film

Find out why Bollywood these heroes should pair up for a buddy film

What’s better than one actor? Two actors. Buddy films are a big hit in Hollywood now. Sholay is the ultimate buddy film. B-Town has always done two-hero films. Remember Sanjay Dutt and Govinda in Haseena Maan Jayegi? Aamir Khan and Salman Khan in Andaz Apna Apna, Shah Rukh Khan and Saif Ali Khan in Kal Ho Na Ho? Such films haven’t happened for some time now. We enjoyed Dostana (Abhishek Bachchan-John Abraham) and Desi Boyz (Akshay Kumar-John Abraham) but there is room for a lot more ‘bromance’ on screen. After Hrs has put together a list in the hope that filmmakers will rope some of these jodis. Read on... What is a buddy film? A buddy film is a genre in which two people of the same sex (historically men) are paired. The two often contrast in personality, which creates a different dynamic onscreen than a pairing of two people of the opposite sex. The contrast is sometimes accentuated by an ethnic difference between the two. The buddy film is commonplace in American as well as Indian cinema; and it works with different pairings and different themes. The Los Angeles Times in 2001 called the genre ‘a necessary escapist fantasy’, writing, “It’s one of the few arenas where men can openly express their feelings for each other, even though men on screen today seem less comfortable with each other than ever before.” In buddy films, the two men are markedly different, and their relationship with each other is challenged by events in the film. The two are often different enough that one is aggravated by the other. The interaction between two men also differs from the interaction between a man and a woman, which shapes a film’s dynamics. Shahid Kapoor & Shah Rukh Khan Why: They have hosted many award functions together and they complement each other perfectly. While Shah Rukh has cutting wit, Shahid has those twinkling eyes and easy charm. They even have dimples and floppy hair... Hell, they can play brothers! What kind of film: One directed by Farah Khan... mad, irreverent and fully commercial! Akshay Kumar & Varun Dhawan Why: Both the actors have a naughty, flirty streak and can play the lover boys with an aplomb. Plus Akshay’s sporty action is something that Varun can be pushed to try and match up to. What kind of film: A Desi Boyz reloaded for sure! Directed by Rohit Dhawan who made the original. Abhishek Bachchan & Ranveer Singh Why: Abhishek’s subtle and wry sense of humour can provide the perfect foil to Ranveer’s hyper histrionics very much like Jai-Veeru of Sholay! What kind of flick: Something on the lines of You, Me and Dupree with Ranveer as Randolph Dupree (Owen Wilson) and AB as Carl (Matt Dillon) would fit their temperaments! Rohan Sippy, are you listening? Ranbir Kapoor & Anil Kapoor Why: The ‘Jhakaas’ Kapoor in an over-the-top form and a subdued Ranbir Kapoor are just a pair waiting to be cast together. They could even work as father-son if Anil agrees. What kind of flick: We see them together in a Men In Black kind of a film with Anurag Basu in the director’s seat with Anil as Agent K (Tommy Lee Jones) and Ranbir as Agent J (Will Smith). Vidyut Jamwal & Ajay Devgn Why: The two share a kind of intensity that is best suited for an action flick. What kind of flick: A high-octane cop drama like Trading Places directed by Sanjay Gupta Arjun Kapoor & Salman Khan Why: Arjun is Salman’s protege and they would make an unexpected pair on screen. We see Kapoor playing the role of clueless Romeo being coached by the big brother Khan, who is a ladies man. A complete ladies charmer with a shy guy could make for an interesting ‘partner’ship! Salman’s naughty sense of humour and Arjun’s straight-faced lost boy charm can be each other’s perfect foil. What kind of flick: We see this one being directed by Rohit Shetty. He is the only one who can capture this equation successfully on screen. Siddharth Malhotra & Hrithik Roshan Why: Besides matching muscles, the two all-rounders fit the family guy image pretty well too. What kind of flick: A Karan Johar kind of a family film with doses of everything thrown in, in generous measures really. Abhay Deol & Sunny Deol Why: Simply because despite being cousins, the two belong to absolutely two different kinds of cinemas and even acting. A combination of the two would be interesting to watch out for. What kind of flick: A film like 48 Hours (1982), the Eddie Murphy and Nick Nolte starrer, helmed by Milan Luthria. Remember his Kachche Dhaage with Ajay Devgn and Saif Ali Khan? Aamir Khan & Imran Khan Why: The maamu-bhanja jodi will score high on curiosity meter. While Aamir fits into any part with ease, Imran would be best-suited for an urbane setting. Plus it would be nice to see their easy real equation translate on screen. What kind of flick: Raju Hirani would be too predictable. We want to see Rajkumar Santoshi direct this duo in a film. John Abraham & Emraan Hashmi Why: John can handle the action part of the film, while Emraan can be the lover boy. The two are as different from each other as chalk and cheese, so their interaction is bound to be interesting on screen. What kind of flick: A Rush Hour kind of a film directed by Mohit Suri.




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Shah Rukh Khan, Vijay, Pawan Kalyan to lock horns at southern box office on August 9

Shah Rukh Khan, Vijay, Pawan Kalyan to lock horns at southern box office on August 9

hah Rukh-starrer Chennai Express, which has a heavy southern flavour, Vijay's Tamil political drama Thalaivaa and Pawan Kalyan's Telugu family drama Attarintiki Daaredhi are releasing on the same day. Come August 9 and three superstars — Shah Rukh Khan, Vijay and Pawan Kalyan — from the Hindi, Tamil and Telugu film worlds — are set to battle it out at the southern box office. The outcome is likely to be phenomenal, say industry experts. Shah Rukh-starrer Chennai Express, which has a heavy southern flavour, Vijay's Tamil political drama Thalaivaa and Pawan Kalyan's Telugu family drama Attarintiki Daaredhi are releasing on the same day. "This is probably the first time in Indian cinema that films of superstars from different languages are going to vie for the top spot at the box office. It's tough to predict the winner because expectations are riding high on all the three films," trade analyst Trinath, said. The tough competition will especially be tough in the overseas market, he said. "Chennai Express will have a wide overseas release. I was told it's being released in countries like Morocco, Israel and even Germany, while Thalaivaa and Attarintiki Daaredhi will predominantly target countries such as the US, Britain and Australia," he added. But, the first week of August will also see the release of Hollywood biggies such as Disney's Planes, Neill Blompamp's Elysium and Thor Freudenthal's Percy Jackson: Sea of Monsters. "It's going to be neck-to-neck competition for these films. Chennai Express has already got maximum number of screens in most countries. Pawan Kalyan has great market in the US and his films usually have good openings here," an international distributor of Indian films, said. Pawan Kalyan's Gabbar Singh, Telugu remake of Dabangg, raked in over $1 million in the US upon release in its first week. Trinath believes it's the box office opening that will make the difference for the three big-ticket films. "We don't know yet the number of theatres Chennai Express is being released, while Thalaivaa and Attarintiki Daaredhi are expected to release in over 1,000 screens worldwide individually. All the three actors are known for having blockbuster openings and therefore, that will be the deciding factor," he said. Vijay's last release Thuppakki minted Rs 65.32 crores worldwide in its first week run at the box-office. The film, which was reportedly made on a budget of Rs. 70 crore, went on to collect over Rs100 crore in two weeks. Pawan Kalyan's Cameraman Ganga Tho Rambabu raked in Rs52 crore worldwide in the first week, Shah Rukh's Jab Tak Hain Jaan collected a whopping Rs120 crore in the first six days upon its release in 2012. Meanwhile, multiplexes in Chennai have opened bulk bookings for Thalaivaa and Chennai Express as well.




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Bollywood's Priyanka Chopra targets stereotypes in Hollywood

Bollywood's Priyanka Chopra targets stereotypes in Hollywood

OS ANGELES: Bollywood actress Priyanka Chopra has a higher mission than just making it in Hollywood: she wants to break down stereotypes of Indians in Tinseltown's eyes and maybe make things easier for her compatriots who live in the United States. Here's her first lesson: "We don't travel on elephants, there aren't any snake charmers on the side of the road, everybody doesn't talk like Apu from 'The Simpsons,'" the actress says, with a bit of a laugh. Chopra, 31, is one of the biggest stars to emerge in Indian film in recent years, alongside Bollywood heavyweights Shah Rukh Khan and Hrithik Roshan, with big budget franchises such as "Krrish" and "Don." She has also won plaudits for taking on unconventional roles, most recently playing an autistic woman in 2012's "Barfi!" But in her latest role as an eye-catching animated racing airplane in Disney's global adventure "Planes," Chopra said she is hoping to cross the boundaries of Bollywood to Hollywood. "This is a very global movie. You have characters from all across the world, and I think for kids, it's great to understand that there's so many different kinds of culture and people out there," the actress told Reuters on Thursday. Chopra first rose to fame in 2000, winning the Miss World beauty pageant and transitioning into Bollywood film. But the journey has not come easily for the actress, who said she had to learn the ropes of acting. "I was 17 years old, I didn't know anything. I just went with my gut and I wanted to take a chance," she said, adding "I've made so many mistakes along the way." Chopra is currently in production on a biopic about Indian Olympic boxing champion Mary Kom, and learning to box herself, Chopra said the role was "the most difficult film I've ever done." "Mary is a national icon. She's a five-time world champion, a mother of three kids, an Olympic medalist and she has an incredible story," the actress said. "The challenge was that I have to learn a completely new sport and play a living, breathing person," she added. Chopra, who was born and raised in India and also spent a few years living in the United States in her teens, has conquered the ranks of Bollywood, but cracking into Hollywood has presented its own challenges. "There is a very big stereotype with Indian actors, and you get only Indian parts. There is a stereotype that there's a certain accent and there's a certain vibe and how is that cool. I felt a lot of that and I really want to be able to change that, for people to be proud of their roots," the actress said. POP ALBUM, TOP PRODUCER Chopra's step into Hollywood coincides with her foray into pop music, releasing her first single, "Exotic", featuring rapper Pitbull from her upcoming yet-to-be-titled album. The album is being overseen by renowned pop music producer RedOne, who has worked with Lady Gaga, Nicki Minaj and Jennifer Lopez, and is expected in early 2014. It will feature more collaborations with other artists, although Chopra said it was too early to reveal any names. "My album is like me - eclectic in my taste." said Chopra. "I like a little bit of everything, so my album has ballad, mid tempos, pop, a little rap, EDM...a little bit of everything." With her music and film career expanding outside of Bollywood, Chopra said she was now in a position to change common misconceptions that people may have about India. "It was really hard for me when I went to school in America, and I don't want that to happen to any more kids or people who come from my part of the world. So if I can do something to change that perception, I'd be happy," she said.




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NEWS/ Megan Fox Pregnant: Actress Expecting Baby No. 2 With Brian Austin Green

NEWS/ Megan Fox Pregnant: Actress Expecting Baby No. 2 With Brian Austin Green

Parenthood is going to be twice as nice for Megan Fox and hubby Brian Austin Green. Ten months after welcoming son Noah, the Transformers actress, 27, is pregnant with the couple's second child, the New York Post reports. Fox's rep, Leslie Sloane Zelnick, confirmed the happy news to the paper. "I can confirm Megan is expecting her second child with her husband Brian," Zelnick said. "They are both very happy." PHOTO: Check out Megan Fox's pregnancy style The couple tied the knot in 2010, and on Sept. 27, 2012, they welcomed son Noah. The 40-year-old Green also has an 11-year-old son, Kassius, from a previous relationship. Fox is currently shooting the splashy reboot of Teenage Mutant Ninja Turtles, and the actress reportedly kept mum about the exciting news so the production could remain focused on the shoot. PHOTOS: See more celeb baby bumps Splash News In a stealth move, the couple managed to keep the birth of their first child top secret for a full three weeks before E! News exclusively revealed that they had become first-time parents. Fox later spilled the beans on Facebook. "We have been very lucky to have had a peaceful few weeks at home," she wrote. "I gave birth to our son Noah Shannon Green on September 27th. He is healthy, happy, and perfect." WATCH: Megan Fox reveals how Reese Witherspoon helped her keep baby Noah's birth a secret Interestingly, the couple said that one particular celeb was instrumental in helping them keep Noah's birth a secret: Reese Witherspoon. The Walk the Line actress gave birth to her son, Tennessee Toth, on the same day that Noah was born, conveniently diverting attention away from the newest addition to Fox and Green's family. "[Reese] went into labor the day before I did, and all of the paparazzi followed her to Santa Monica," Fox said during an appearance on Ellen DeGeneres' show last December. "So when I went into labor, I went to Cedars [medical center] and nobody cared or knew or was there, and so I got in and out. I left the next day and nobody knew and it was a big secret for three weeks." Sneaky! WATCH; Megan Fox opens up about painful childbirth Fox has been open about the transformative power of motherhood. When E! News caught up with the actress in December while she was promoting the appropriately titled Friends With Kids, she gushed about just how much motherhood has changed her. The actress opens up on how being a new mom has changed her sense of humor. Plus, get the deets on her quick and painful labor! "I'm so much softer than I used to be, and I feel everything so much deeper than I used to," she said. When I watch the news, everyone is somebody's child or someone's mother. So, I'm constantly worrying now about everything." She also hinted that she and her hubby were looking to expand their family: When asked whether they would eventually want a second child, she smiled and simply nodded. Congrats to the elated couple!




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Viacom Quarterly Earnings Rise as U.S. Ad Growth Accelerates

Viacom Quarterly Earnings Rise as U.S. Ad Growth Accelerates

Entertainment conglomerate Viacom on Friday reported improved financials for its fiscal third quarter as its U.S. TV advertising revenue growth accelerated. OUR EDITOR RECOMMENDS Viacom Demands New Judge in YouTube Copyright Fight What Amazon's Viacom Coup Means for Netflix The company, led by CEO Philippe Dauman, reported adjusted earnings from continuing operations of $635 million, compared with $512 million in the year-ago period. Revenue rose 14 percent to $3.69 billion from $3.24 billion in the year-ago period, exceeding Wall Street expectations. PHOTOS: Nickelodeon Kids' Choice Awards 2013 Analysts had on average forecast earnings of $636 million on revenue of $3.58 billion. Viacom also announced Friday that its board has approved an expansion of its stock repurchase program to $20 billion from $10 billion. Media mogul and chairman Sumner Redstone controls Viacom and CBS Corp. PHOTOS: MTV Video Music Awards 2013: The Nominees Media networks unit revenue rose 13 percent, while film revenue jumped 15 percent, helped by such releases as World War Z, Star Trek Into Darkness and Pain and Gain. However, worldwide home entertainment revenue declined 10 percent, with the company citing lower carryover revenue. Operating profit rose 24 percent in the media networks unit, but declined 63 percent in the film division as the company cited higher operating expenses. Media networks revenue rose thanks to increases in affiliate fees and advertising revenue. Affiliate revenue rose 26 percent worldwide and 28 percent in the U.S. due to the benefit of digital distribution arrangements and rate increases. Excluding the impact of digital distribution arrangements, which are affected by the timing of available content, the domestic affiliate revenue growth rate was in the high single digit percentage range. U.S. advertising revenue rose 6 percent, up from 2 percent in the previous quarter "due in part to increased ratings." Worldwide advertising revenue rose 5 percent. "Viacom's strong results in the quarter once again demonstrated the value of our world-leading brands, global reach and devoted audiences," said Redstone. "With an improving economy, Viacom is poised for continued success." Said Dauman: "Viacom's aggressive investment in content, outstanding operational execution and fiscal discipline helped deliver a strong quarter with double-digit revenue and profit growth. Domestic advertising revenue gains continued to accelerate at our media networks as new, original programming drives improving ratings momentum." Added the CEO: "In a crowded summer season, Paramount's tentpoles – Star Trek Into Darkness and World War Z – achieved critical and box office success, and the studio has a promising slate remaining through calendar 2013 and beyond."




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What Tom Rothman's TriStar Move Means for Sony Pictures (Analysis)

What Tom Rothman's TriStar Move Means for Sony Pictures (Analysis)

The surprise announcement that former Fox film studio co-chairman Tom Rothman will preside over a revitalized TriStar production company at Sony Pictures has some industry insiders wondering whether the hire is the forerunner of more change at the company. OUR EDITOR RECOMMENDS Tom Rothman Launching TriStar Productions at Sony Activist Investor Dan Loeb Makes Appearance on Sony Earnings Call Tom Rothman Packs Up His Fox Office, Moves Out As hedge-fund billionaire and Sony investor Daniel Loeb continues to agitate about the studio's spending — he recently complained, with colorful exaggeration, that with After Earth and White House Down, Sony had released "2013's versions of Waterworld and Ishtar back to back" — the news of Rothman's new deal set off furious speculation. What is clear to industry veterans is that Rothman is a seasoned executive with a well-established reputation for fiscal discipline that should please Loeb, even if many filmmakers and agents chafed while he was at the Fox studio. His deal at Sony calls for him to make up to four movies a year. STORY: Activist Investor Dan Loeb Makes Appearance on Sony Earnings Call Inevitably, some are beginning to speculate whether Rothman could play a larger role at Sony Pictures. Others believe that longtime Sony Pictures co-chairman Amy Pascal (who, along with Michael Lynton, CEO of Sony Entertainment announced the hire) simply wanted to work with Rothman. "Amy is very, very close to Tom," says a top executive at a production company with no ties to Sony. "He consulted with her after he left Fox to try to get a handle on overhead and operations. I think she wanted him there. Not to say that if there were changes, he wouldn't be considered, but I don't think this is anyone telling Amy to bring him in or that he would go behind her back. This is just unfortunate timing because of Daniel Loeb." After a period when Sony was seeking to trim costs, some industry observers note that it seems counter-intuitive that the studio would ramp up production at TriStar, which in recent years has been largely a distribution banner rather than a production entity. "It's an odd time to start a new label," says a top executive at a rival studio. THR reported last fall that Sony was under financial constraints for months to come and had been forced to redo deals with its major producers. At that time, agency sources also confirmed that the studio was seeking partners for some projects or abandoning others. Sony had to share George Clooney's upcoming World War II film Monuments Men with Fox and it watched longtime Sony favorite Adam Sandler make a deal for his next films at Warner Bros. and Paramount. PHOTOS: Leslie Moonves, David Zaslav, Robert Iger: 10 Highly Paid Entertainment CEOs Pascal has a reputation for embracing filmmakers and making quality movies of the type that many major studios are now reluctant to back (recent examples include The Social Network, Moneyball and this fall's Captain Phillips). But Sony also has long been known for spending more lavishly than other studios, a notion that Loeb has turned into a rallying cry for stockholders. The activist investor on Monday called Sony's development pipeline “bleak, despite overspending on numerous projects” and said that Sony CEO Kaz Hirai was giving Pascal and Sony Pictures CEO Michael Lynton "free passes." Rothman presents a striking contrast. In an interview with THR, he declines to detail exactly what kind of movies he will make, but he suggests they won't be big-budget event films, a number of which have disappointed over the past few months. "In terms of our strategy, I believe there is a lot to learn from this summer," Rothman says. "Throughout my career, I have always tended to zig when other people zagged and that's what I'm going to try to do here." Rothman, who is a joint venture partner with Sony in the relaunched Tristar, also will be empowered to develop television shows via Sony Pictures TV. One prominent producer notes that "Tom was not a popular guy at Fox or a popular guy in the town, but he ran the company well." Another believes that Rothman is "obviously a possible replacement" for Pascal in the future. "That doesn't mean it's the first thing on the agenda but it certainly is a possibility and he'll be locked up just in case." But in the interview with THR, Rothman says his production entity is intended to "be complementary, not competitive, with the existing Sony labels. They do a fantastic job." Pamela McClintock contributed to this report.




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