We've Got Hollywood Covered

Can Kazuo Hirai Rebuild Sony’s Bench After Michael Lynton Exit?

Studio faces headwinds with longtime executives leaving and a recent movie slate that hasn’t performed

Tokyo-based Sony Corporation President and CEO Kazuo Hirai is now overseeing the company’s entertainment assets, now that Sony Entertainment CEO Michael Lynton has stepped down to become chairman of Snap Inc.

Hirai — who now plans to take a second office at Sony’s Culver City, California studio — might need to spend plenty of time on the other side of the Pacific in order to help rebuild an executive team that has been dramatically thinned out in recent years. He will also need to bolster a future film slate that is absent of too many sure things.

Lynton’s surprise departure after 13 years at Sony makes him just the latest longtime Sony hand to depart since a December 2014 hack that exposed numerous personal emails and essentially ground the studio’s business to a halt.

Former Sony Pictures co-chair Amy Pascal — who first joined Sony back in 1988 — left to become a producer in February 2015 after racially insensitive emails about Barack Obama were exposed in the leak, among other emails of hers that got out. Her replacement, Tom Rothman, has not exactly been a revered leader, according to multiple insiders.

Production president Michael DeLuca moved on from the studio in April 2015, TV Chairman Steve Mosko departed in June 2016 after 24 years at Sony, and business affairs chief Andrew Gumpert left in November. Sony Music Entertainment CEO Doug Morris is one of the few longtime execs still around.

Lynton himself was even speculated to be eyeing greener pastures, as past leak emails revealed, suggesting he was interested in other jobs, such as becoming president of New York University.

Insiders at the studio are insisting that Lynton will perform his full duties for the next six months, several individuals with knowledge of the company told TheWrap, despite wild speculation about his replacement coming sooner. However, that still leaves Hirai without much time to rebuild a team, and that’s exacerbated by a film slate that underperformed last year and while there are plenty of titles in production, there aren’t too many sure bets in the near-term pipeline that could turn around the studio’s fortunes.

Sony ended 2016 with just 8 percent of the sector’s market share — a distant fifth place behind Universal, which had 12.4 percent. The studio weathered some high-profile disappointments: The “Ghostbusters” reboot ended with a reported $50-million write-down. “The Magnificent Seven” couldn’t crack $100 million domestically, in spite of its all-star cast and big $90-million production budget. And the star-studded space romance “Passengers,” with Chris Pratt and Jennifer Lawrence was just shy of an all-out flop in North America, earning little more than $80 million against its $110 million budget.

The bright spots of the year for the studio came from smaller budgeted hits, like, the animated “Sausage Party,” scary movie “Don’t Breathe,” and the faith-based “Miracles From Heaven” — but a string of small-time hits didn’t add up to the tentpole smashes the studio needed to keep driving up the bottom line.

The studio’s upcoming slate of wide releases is thin on major blockbusters — except for the highly anticipated “Spider-Man: Homecoming” with Tom Holland set for release this coming summer. If the new Spidey standalone lives up to the promise of the character’s debut in “Captain America: Civil War,” the comic book hero could help save the day for Sony. But it will take more than that to lift the studio out of the doldrums.

Perhaps the Christmas-time 2017 release of “Jumanji” will be the cure, or even the sequel “Bad Boys for Life,” due out in early 2018 — which has been a reliable moneymaking series. Fantasy epic “The Dark Tower” could be an iffy bet, seeing as Ron Howard’s last venture with the studio, “Inferno,” flopped. Then there’s the live-action “Barbie” with Amy Schumer attached to star, set for the summer of 2018.

And of course, after an embarrassing and financially damaging hack, Sony has to prove that it has its cybersecurity situation under control as it seeks to attract executives. Lynton presiding over the company during the hack didn’t inhibit his ability to become chairman of one of Wall Street’s favorite tech companies (his early equity stake certainly helped). But Sony will likely face scrutiny from potential hires who want to ensure their personal emails aren’t available to anyone with an internet connection.

Sony isn’t without its upsides — its “Spider-Man” franchise is an extremely valuable asset and a strategic partnership with Chinese entertainment giant Dalian Wanda Group could give the studio significant advantages as it markets its films in China, the world’s second-largest movie market, with the help of the company owned by its richest man.

The irony of the man who presided over arguably the most famous corporate hack moving on to a company known for disappearing messages probably isn’t lost on Sony. But unlike some tech companies, having veteran executives with industry know-how and relationships is critical for a film studio. Time for Hirai to hit the recruiting trail.

Meriah Doty contributed reporting to this article.