Sony to Cut $250 Million from Media Budget
posted Saturday Nov 23, 2013 by Nicholas DiMeo
Kaz Hirai has been at the head of the Sony ship for quite some time now, and has led the charge of turning around the company. His idea of a revival plan coupled with several purchases that were key to Sony's future success made everything appear like Hirai would be able to right the ship. However, after numbers were still in the red and Sony's board rejected the proposal to spin off its media division, Sony has taken to drastic measures to save the company. The solution? Slashing the budget for the media division.
While the consumer electronics side of Sony has leveled off over the past year, movies like Smurfs 2 has seen Sony's media division plummet, and the numbers show in the box office. The board of directors must be confused as they have first decided to maintain the branch within Sony yet are now rumored to be cutting the budget by over $250 million after outspoken and prolific investors have made their concerns known. So the fix is that we'll see Sony take a "significant shift" from making terrible movies and will start putting more eggs into the television business.
Sony Pictures Co-Chairman Amy Pascal has said that "we are reducing the number of films we make." For consumers, that means a reduction of five movies released each year, down to 18 total that we'll see in theaters beginning in 2015. We'll also see the company reduce its summer blockbusters, if they can be called that, from nine to four, beginning next summer.
So what all is included in a $250 million budget cut? According to Sony Entertainment Chief Executive Michael Lynton it's "overhead and procurement" items being slashed from the expenditures.
We are in discussions with experts to help identify more efficient ways to do business in the future.
However, according to other sources close to the matter, it could be that Sony will be auctioning off some of its properties on the movie-side of things, specifically, Marvel brands. It's definitely beneficial to both Sony and Disney if Sony wants lots of money for things like Spider-Man, and Disney has the blank check ready to make all of it happen. And, if that rumor comes to fruition, we'd finally get the Civil War that we all know and need in our lives.
In hindsight, it seems that selling off the media division to Daniel Loeb's Third Point Hedge Fund, the leading shareholder of Sony, would've been the best option. Second best option would be to make better movies, because when films featuring Channing Tatum don't sell well, it's apparent that there's some serious problems in other places. So what'll happen in real life? We're not really sure but I'm sure we'll have an answer on an impromptu conference call that's supposed to take place next week. We'll be here to report any news coming our way.