Kazuo Hirai says studio does need to improve its greenlighting process
Sony Chief Executive Officer Kazuo Hirai insists there's no hard feelings over activist investor Daniel Loeb's failed attempt to pressure the technology company to spin-off its entertainment assets.
In an interview with the Wall Street Journal, Hirai said that a summer of costly film flops like “White House Down” and “After Earth” means that the company's studio arm must re-assess how it decides which projects to back. Profit margins at the studio must be higher, Hirai said.
The string of bombs became a cudgel for Loeb, as he bludgeoned the studio for being profligate and slammed the company for releasing “2013’s versions of Waterworld and Ishtar back-to-back.” Loeb's hedge fund Third Point has a seven percent stake in Sony.
Despite the fact that Sony's board ultimately rejected Third Point's push to have the entertainment assets spun-off as a separate, publicly traded company, Hirai said that Loeb's campaign strengthened the company.
“Dan Loeb and Third Point shed a light on the entertainment properties that we've been trying to shed a light on for the longest time,” Hirai said. “It's actually a good thing.”
The Sony chief said the company had already implemented cost restructuring on its studio end, but he did not offer specifics about what the cuts entailed.