Yahoo Finance Michael Lynton Is Out As CEO Of Sony Entertainment
After 24 hours of rumors about an executive change at the top of Sony, word has just come from Michael Lynton to his employees that he is stepping down as CEO of Sony Entertainment after more than 12 years at the helm. The move comes after a meeting with Sony bigwigs in the past 48 hours. Lynton, 57, said he is leaving to focus on his job as chairman of the board of Snap, Inc., parent of SnapChat which he and his wife invested into years ago and is getting ready to go public.
Lynton will help Sony Corp. president Kazuo Hirai with the transition in choosing a new executive replacement and help him learn the inner workings of the company. Hirai will take on the role now of co-chief executive of Sony Entertainment and become more hands-on, with plans for a second office on the Culver City lot. Lynton says he will be staying to help in the transition for six months. We hear that Tribune Media president and CEO Peter Ligouri may be advising the Sony board behind the scenes on the next move.
News of the departure gives way to questions of who might replace Lynton — the last of the top officials at Sony that held positions after Sony was hacked in what was a devastating criminal attack that exposed both private information of employees and grievances and backbiting via company emails. It was an embarrassment that became fodder for journalists for months and ended in the ouster of Sony Pictures’ co-chairman Amy Pascal in 2015.
One name being bandied about to take the top spot is former 2oth Century Fox chairman Jim Gianopulos, who has been mentioned for a number of positions around town. If that were to happen, it could get quite complicated with Sony motion picture group chairman Tom Rothman, who worked with Gianopulous at Fox when Rothman was pushed out.
Deadline has heard that other executive changes also may be afoot, despite Sony Corp. president’s vote of support of Rothman last November. With Lynton leaving, Sony Pictures’ head of the motion picture unit — Rothman — is said to be “on thin ice.” Studio 8’s Jeff Robinov, who has strong filmmaker relationships, has been talked up recently both internally and externally for the top motion pictures post. His company is currently based at Sony.
Another name for the Lynton replacement is Jeffrey Katzenberg, DreamWorks Animation’s founder and former CEO who has run Disney and also started a major entertainment company from the ground up.
Another name is former Lionsgate co-chairman of the motion picture group and previous Paramount vice chairman Rob Friedman. Whereas Gianopulos began in distribution, Friedman came up through the marketing ranks, first at Warner Bros under the Bob Daly-Terry Semel regime, next at Paramount, and then Lionsgate. While at Paramount, he created the Paramount Classics division and also oversaw about seven divisions. At Lionsgate, he was responsible for the domestic and international feature film acquisition, production and distribution as well as home entertainment. So a number of names are being talked about at the moment.
So are a number of scenarios, including Sony absorbing Lionsgate and their executives into the studio in a strategic move to bolster the upper echelon with experienced, hands-on execs like Jon Feltheimer (who used to be at Sony) and Michael Burns who both understand finance.
Lynton is an East Coast guy, initially hand-picked by Howard Stringer in 2004 to run the Sony studio. The Harvard-educated executive eventually ended up with all of Sony reporting to him, including music operations. But after the Sony emails were hacked, it became clear through those emails that Lynton had been looking for a change for his professional life, and he had an eye to move back to the East Coast for a different career. He had, at one time, been the head of Penguin Publishing in New York after working as president of Hollywood Pictures for a short stint. He did eventually end up moving back to New York, but still remained at Sony.
After most recently overhauling the executive ranks at Sony which put Rothman over the picture unit — a hiring that has not come without controversy as his micro-management style has him continually butting heads with execs within Sony who wish him gone — Lynton now becomes the last executive of the old regime who is leaving the company following the Sony hack. He ends his career at at the studio having had a long run Pascal and TV chairman Steven Mosko. The latter left the studio after 24 years last year after clashing with Lynton; they could not come to terms on a deal. Some are hoping for a Mosko return.
The studio has gone through a number of box office flops at the box office, too, including Ghostbusters and its latest disappointment Passengers. Besides losing Mosko, Sony Pictures also lost its highly respected head of business affairs Andrew Gumpert to Paramount just as they were re-negotiating the deal with Lone Star Capital (something Rothman also had a hand in). This is also comes as Sony was contending for the next Bond film.
It’s been TV, not film generating the majority of the profits for Sony. Sony Pictures reported an operating loss of $64.9 million on revenues of $3.28 billion for the six months ending in September. That let the company to slightly lower its full year forecasts for revenues and profits for the fiscal year that ends in March. Sony now sees the movie and TV unit generating about $8 billion in revenue for the fiscal year, down 3.0% vs the previous year, with an operating profit of $25 million, down 24.7%.
“The turnaround of Motion Pictures, the most challenging of the three business categories in the Pictures segment, is progressing, but it takes time for the benefit to be realized, and we believe there is a possibility that we may not meet the operating income target we gave for next fiscal year at the IR Day in June,” CFO Kenichiro Yoshida said in November.
“While continuing to strengthen our marketing outside of the U.S. and augmenting IP, we plan to work with the new CFO of Sony Pictures Entertainment, who joined in July, to further enhance financial discipline.”
Here is Lynton’s note to the staff and following that is one from Hirai:
Dear Colleagues,
Today I will be announcing my resignation from Sony to focus on my position as Chairman of the Board of Snap Inc. This was not an easy decision for me, and one that I arrived at after long and careful consideration. Sony Corp will be issuing an internal note from Kaz to all Sony global employees as well as a press release describing the details and timing of my transition, which I have included below.
As some of you are already aware, I have been involved with Snapchat since its early days. Given Snapchat’s growth – and my growing role and responsibilities in it – I recently determined that the time was right to make a change.
I leave Sony with great pride in all we have accomplished together – from our greatest victories to overcoming our biggest challenges. Together we:
· Produced terrific films such as American Hustle, Captain Phillips, The Social Network, Spider-man, Skyfall and Spectre; and hit TV shows like Breaking Bad, The Blacklist, The Goldbergs, The Crown and Kevin Can Wait;
· Grew our worldwide networks business to 178 countries, including India with our ownership of the IPL cricket rights the Ten Sports Network;
· Completed the Lot’s most significant capital improvement projects in decades including the Jack and Harry Cohn buildings, Calley Park and the beautiful new 8-story Akio Morita building, which brought Sony Music and Sony/ATV Music Publishing employees onto the Lot for the first time;
· Completed the $750 million acquisition of the Michael Jackson Estate’s stake in Sony/ATV, making us 100% owners;
· And triumphed over the most devastating and disruptive cyber-attack in corporate history, keeping studio operations running and not missing a single day of production.
As you are all aware, the landscape of our business continues to shift as never before, and the innovation and commitment shown by all of you at Sony Corp, Pictures and Music to adapt and change with it has been inspiring. I am confident that the broad changes we have made and the terrific new management team we assembled over the last few years will strengthen the company overall, and position it for greater growth in the future.
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. I want to thank Sony Corp – Kaz and Howard Stringer in particular – for their leadership and support over the years, and our excellent teams at Pictures and Music for their unwavering dedication to producing and distributing outstanding entertainment.
I will be staying with Sony for the next 6 months to ensure a smooth transition, and I look forward to working with Kaz and many of you in that process.
Thank you all for these wonderful years together. I know that Sony’s best days lie ahead!
Michael
This is the statement from Hirai:
Dear Colleagues
Today we are announcing that Michael Lynton will be stepping down as Corporate Executive Officer of Sony Corporation and CEO of Sony Entertainment in charge of our Pictures and Music businesses to be Chairman of the Board of Snap Inc. I have included a copy of the press release below which explains the details and timing of his transition.
Michael has had a long and illustrious career with Sony. For the last 13 years he has led our entertainment businesses though some of their greatest accomplishments, and more recently, helped guide them through some of the biggest challenges the film, television and music industries have ever faced. Through it all, he has been a great leader and a collaborative partner to all of us at Sony Corporation and throughout the various Sony businesses.<
I want to thank Michael for his strong leadership and dedication to Sony. His vast experience and expertise in the entertainment and media space has been invaluable in charting a path forward through a constantly-changing landscape. Particularly the broad structural and management changes Michael has recently implemented will help our music business sustain its strong momentum, and the pictures business to set the path for restoring the profitability and future growth, though we recognize current challenges in motion pictures business and its turnaround will take some time. As we look to the future, we feel strongly that our entertainment businesses are essential part of Sony.
For the next six months, in order to ensure smooth management transition, I will have a second office at Sony Pictures’ site in Culver City, California to work closely with Michael and Sony entertainment executives and employees, while continuing my CEO role for entire Sony group.
Please join me in thanking Michael for his years of dedication and commitment to Sony for which him the best in the next chapter of his career.
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