Sony Pictures Begins Severe Spending Cuts : Movies: The new austerity by one of Hollywood’s biggest splurgers may reflect problems at the firm’s Japanese parent.
Sony Pictures Entertainment, which became known as one of Hollywood’s biggest spenders with movies such as “Hook†and “Radio Flyer,†has begun a retrenchment.
Industry sources say there has been a dramatic drop-off in the number of scripts purchased by Sony’s two movie studios--Columbia Pictures and TriStar Pictures--in recent months. One top agent maintained that the company has instituted a spending “clampdown.â€
Sony’s recent development slowdown could help explain widespread rumors in Hollywood, which the company has forcefully denied, of a plan to sell or fold TriStar. In a climate of rising costs and falling profit, most studios have curtailed project spending, but Sony was seen as going against the tide until recently.
The cutbacks may also reflect problems at the company’s Japanese parent, Sony Corp., which has suffered from a downturn in the electronics business.
Jonathan Dolgen, Sony’s motion picture group president, on Thursday confirmed that Columbia and TriStar have become more “selective.†But he denied reports of a cost-cutting mandate from the parent company. Dolgen said Columbia Chairman Mark Canton and TriStar Chairman Mike Medavoy remain free to buy what they choose, although he declined to say how many projects have been purchased this year.
“We’re trying to be prudent about what we’re buying and about the price we pay,†Dolgen said. “But when stuff is hot and available, we’re buyers. It’s an exercise of taste.â€
Sony claimed 20% of the domestic box office last year with films such as “Terminator 2†and “Prince of Tides,†but it has also come under fire for expensive talent deals and costly management turnover. Analysts say it could be years before the studio turns a profit.
Canton said Thursday that his door remains “wide open†for business, but added Columbia is also committed to “managing development projects in a healthier way.â€
Medavoy said that, although TriStar operates in a climate of financial discipline, he is not constrained from developing projects he believes are worthy.
“I’ve said all along that everybody’s cognizant of the fact that we’re all trying to act financially responsible,†Medavoy said. “At TriStar, it’s not a question of retrenchment. We have a budget to live by and we have not used up all of our budget.â€
Reports of a cost-cutting mandate started circulating several months ago, when Sony Pictures Chairman Peter Guber and other senior executives from the Culver City-based entertainment company returned from New York budget meetings with Sony Corp.’s top brass.
Talent agents and others who routinely deal with the studios say the reins clearly tightened in the aftermath of the New York meetings. One producer with longstanding ties to Columbia said the clamping down has affected all producers dealing with the studio in the last two months.
“We have been directly told that they are putting a hold on all development through the end of the year,†said the producer, who asked not to be named.
The producer noted that the austerity at Columbia is in stark contrast to the freewheeling years that followed Sony’s purchase--for $3.4 billion plus debt--of the studios in 1989, when it swiftly made deals with high-profile producers such as James L. Brooks and Steven Spielberg.
Agents who deal with the studio see a new austerity too. “The studio has been very vocal about not buying for the next 2 1/2 months,†one top agent said.
One high-profile project recently passed on was “Madam Came to Dinner†by Michael Tolkin, who wrote the screenplay for “The Player.†The company also had a shot at an adventure project called “Heart of Stele,†which ended up at Hollywood Pictures.
TriStar is releasing 10 movies this year, compared to 13 in 1991. But a spokesman said Sony’s production level will remain at 25 pictures, about the same as last year.
Sony executives also pointed out that they have recently entered into deals with such high-profile actors as Arnold Schwarzenegger, Michael Douglas and Michelle Pfeiffer. The studios also have such films as “Crossing the Line,†“Sleepless in Seattle,†“Lost in Yonkers,†“Sweet Tooth†and an untitled Jim Brooks movie set to begin production this year.
One executive close to Sony said the company is definitely operating under a “heightened level of cost consciousness,†but only for the most obvious reasons. “Everything was on a fast track for the first three years, because there was so little there,†he said. “Now that we’re up and running, it’s not necessary to have the same level of development funding.â€
Sony Corp., the parent company, reported a pretax loss of $207 million for the fiscal year ended March 31, but that was largely blamed on a deep downturn in electronics sales. Operating earnings from Sony’s entertainment operations--which include movies, television and music--rose 14.3% for the year, to $845 million, according to Sony executives.
In New York, Sony Corp. of America President Michael P. Schulhof said he is delighted with the movie division’s performance.
The biggest entertainment stories
Get our big stories about Hollywood, film, television, music, arts, culture and more right in your inbox as soon as they publish.
You may occasionally receive promotional content from the Los Angeles Times.
