Sony takes $1bn writedown on film division

The studio’s loss is ‘a result of revising the profitability projection for the pictures segment.’
The Sony HQ in California.

Sony Pictures, the studio whose recent releases include T2 Trainspotting, Sausage Party, and Passengers, has announced a dramatic revision of future profit in its film division.

On Monday, a note from CEO Kazuo Hirai and Sony Entertainment CEO Michael Lynton read:

Today Sony Corp. announced that a goodwill impairment charge for the pictures segment of ¥112.1bn (approximately $962m) was recorded as an operating loss in the third quarter ending 31 December 2016.

The statement continued:

Image result for sony logo 2017

The impairment charge resulted from a downward revision in the future profitability projection for the motion pictures business within the pictures segment. The downward revision was primarily due to a lowering of previous expectations regarding the home entertainment business, mainly driven by an acceleration of market decline. Underlying profitability projections of film performance were also reduced, but the adverse impact of that reduction is expected to be largely mitigated by measures that have been identified to improve the profitability of the motion pictures business.

 

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The studio has struggled in recent years: in 2016, just one of its releases – Paul Feig’s Ghostbusters reboot – landed in its all-time Top 50, with a $128m global take. The previous year, two releases, Skyfall and Hotel Transylvania 2, charted in its Top 20.

Sony also suffered from an email leak in late 2014 that revealed some insider details that embarrassed the studio. Revelations about the salaries of the female leads on American Hustle reignited the gender pay gap debate in Hollywood.

The leak was claimed by North Korea, in response to the lampooning of its leader in Seth Rogen comedy The Interview. That film took $11m worldwide, although home entertainment and pirated copies did well.
When hackers attacked Sony Pictures recently, the greatest fears of Hollywood studio executives – and surely the wildest dreams of their assistants – came true. Thanks to the as yet unidentified, reputedly but probably not North Korean hackers, juicy details of executive salaries and executive emails have been thrown open for all to see. Here are five things we have learned so far:

Hollywood executives are mean …
An email exchange between producer Scott Rudin and Sony Pictures co-chairman Amy Pascal involved a spirited discussion about Angelina Jolie’s desire to have David Fincher direct her in Cleopatra, instead of Fincher taking on a film about Apple mogul Steve Jobs. Rudin did not want Jolie, whom he called “a minimally talented spoiled brat” getting involved with the production of the Jobs film. Laboring the point, Rudin, went on to say that the “brat” “thought nothing of shoving this off her plate for 18 months so she could go direct a movie [Unbroken] … She’s a camp event and celebrity, and that’s all, and the last thing anybody needs is to make a giant bomb with her that any fool could see coming.”

… and casually racist …
Pascal, while discussing a breakfast at which she would be meeting President Barack Obama, asked Rudin: “Should I ask him if he like DJANGO” – a reference to the Quentin Tarantino film Django Unchained, which is about a freed slave. She continued with this line, asking if she should see if he liked Lee Daniels’ The Butler, about a black man who served eight US presidents and Think Like a Man, an ensemble romantic comedy featuring many prominent black actors. Think Like a Man actor Kevin Hart spoke out against the comments, as did TV megastar Shonda Rhimes, who called the exchange “racist.”

… and they don’t get paid the same …
Sony’s chief executive, Kazuo Hirai, makes about $1.5m. Nine executives below Hirai made as much, or more than their boss, including Sony movie studio executive Michael Lynton, who made $3m.

… and female actors are paid differently too
Jennifer Lawrence
Oscar-winner Jennifer Lawrence. Not worth as much as her co-stars, apparently. Photograph: Adrees Latif/Reuters
Emails showed that Jennifer Lawrence made less than her male co-stars in American Hustle. In an email exchange between executives, it becomes clear that Lawrence is making less. “You may recall Jennifer was at 5 (Amy was and is at 7) and WE wanted in 2 extra points for Jennifer to get her up to 7. If anyone needs to top Jennifer up its Megan. BUT I think Amy and Jennifer are tied so upping JL, ups AA.” “AA” and “Amy” are Amy Adams, the film’s other female lead; Megan is Megan Ellison, head of the company that financed the film with Columbia.

a Vietnamese monetary group got here in advance to mention that it was centered thru the hackers as properly, and had controlled to forestall a $1m switch. And later that month, Reuters discovered that a third economic group, Ecuador’s Banco del Austro, had moreover fallen prey.

At coronary heart, all the hacks trusted social engineering as a whole lot as technical capabilities. Once the attackers won fraudulent get entry to the Swift community, they messaged the banks’ banks and requested for finances to be transferred – which, normally, they had been. The Bangladesh case simplest got here to moderate because of the truth a typo in one of the commands alerted a worker.

They also gently bend scripts to suit foreign markets
For The Interview, a comedy about assassinating the supreme leader of North Korea, Kim Jong-un, executives considered making the ending less violent. In an email to Hirai, Pascal wrote: “There is no face melting, less fire in the hair, fewer embers on the face, and the head explosion has been considerably obscured by the fire, as well as darkened to look less like flesh.”