Sony Corp. has announced that its Pictures Division will take an “impairment loss” of $962 million (JPY 112.1 billion) in the third quarter of its financial year (Oct-Dec), but has insisted that its movie division is not for sale.
“Make no mistake. Sony Corp.’s commitment to Sony Pictures Entertainment (SPE) remains unchanged. The value of high-quality content continues to rise. As we have stated on many occasions, including at SPE’s All Hands meeting at the end of last year, Sony Corp. sees SPE as a very important part of Sony group, and will continue to invest to achieve long-term growth and increased profits in this space,” Sony group chief Kazuo Hirai and Michael Lynton, SPE’s departing CEO, said in a joint statement accompanying the financial news.
The company attributed the loss to a number of factors past and present, including the purchase of the studio nearly 30 years ago and the “dramatic shifts in the home entertainment space.”
Despite Hirai’s insistence three years ago that improving SPE’s financial results was an urgent priority, the studio continues to struggle with management issues and flops at the box office. There is speculation that a major shakeup could be in order at the studio.
Recent box office disappointments such as the Ghostbusters reboot and Billy Lynn’s Long Halftime Walk have hit SPE hard, but Sony insists that profits are expected to grow overall in the coming years as the company moves to improve profitability of the Motion Pictures business and expand its Television Productions and Media Networks businesses. A recent hit in this area includes Netflix’s The Crown.
“One of Sony’s great strengths is the diversity of its business portfolio and unifying power of the ‘Sony’ brand. Each business must be autonomous, self-sustaining, but at the same time they work cooperatively under the common identity of ‘Sony,’ aiming to enhance the total corporate value of Sony group. It is important to keep in mind that there was a time when some businesses were facing tough challenges; other businesses helped us to improve and sustain the profitability of the entire Sony Group,” the pair wrote.
“Fiscal year 2017, which begins in April, is the final year under our second mid-range plan. We look forward to working together to achieve our consolidated financial targets of more than 10% in return on equity and JPY500 billion in operating income, and to make a Sony that always brings inspiration and emotional engagement (Kando) to our customers.”
(Source: Business Insider)