Saturday, April 20, 2024

White House Down and Sony, Too? Movie’s Failure Could Fuel Major Spin Off Proposal


UPDATE SUNDAY 12:10PM: “White House” down came in at 4th place for the weekend, taking in a meager $25million. That’s about a tenth of what it cost all-in.

EARLIER: It does look like “White House Down” will be the second blockbuster failure of Sony Pictures in less than a month. The studio is already dealing with Will Smith and M. Night Shyamalan’s “After Earth” after-birth. Now “WHD” aims for 3rd or 4th place this weekend in its debut.

Many things combined for its failure but mainly the story I told the other day about the earlier movie “Olympus Has Fallen” and how Sony, failing to buy that script, went after this similar one. Then, seeing the similarities, joked it up until it became as one Twitter follower declared “hillarible” (hilariously horrible).

But these developments aren’t good for Sony’s beloved Amy Pascal and Michael Lynton. They are faced with increasing demands from shareholder Daniel Loeb of Third Point LLC. Loeb– the third biggest shareholder in Sony–has been sending letters to the company demanding a spin off of Sony Entertainment from the rest of the company. (Loeb is also a minority investor in Penske Media, which own industry trade magazine Variety.)

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“White House Down” won’t be the last straw, but if it’s a massive failure–and things don’t look good– Loeb will use that. Third Point is a $13 billion hedge fund owned by Loeb. In May, Loeb launched a campaign to break Sony up.

In his latest letter he wrote: “While the Entertainment businesses are top performers within Sony, profit margins fall short when benchmarked versus their US-listed competitors despite superior scale and leading market positions. We believe the underperformance would be remedied by a more disciplined management approach to Sony Entertainment.”

All of this comes as Sir Howard Stringer, who supported and protected Pascal and Lynton, retires. He’s succeeded by Sony’s new CEO Hazou Kirai. At long last, the Japanese, who own Sony, are going to run it from New York.

Of course, Sony’s financial woes aren’t really tied to Sony Pictures. The film division had a monster hit with “Skyfall” last year and they have “Spider Man,” who will always save the day. “Zero Dark Thirty” was impressive, and Sony Pictures Classics, their jewel, has lots of Oscars and even a new Woody Allen film that will make for a sweet summer.

Sony’s biggest problems are in electronics. They were never able to turn the Walkman from tape to digital, so iPods rule the world. And while Sony makes a good laptop (the VAIO, which I bought this spring and love), MacAir is the dominator. The company banked on 3D TV, which failed. And the Sony Bravia TVs have been up-ended by Samsung, Sharp, and Panasonic.

Pascal and Lynton have one more shot this summer: “Elysium” starring Matt Damon, and directed by 32 year old wunderkind Neill Blomkamp of “District Nine” fame. This is the big one, and much anticipated. Everyone has high hopes for its release on August 9th. Blomkamp is young and a recent Oscar nominee. He has none of the bloat or hubris yet that comes with Smith, Shyamalan, and Emmerich. And “Elysium” may save Sony Pictures this summer.




Roger Friedman
Roger Friedman
Roger Friedman began his Showbiz411 column in April 2009 after 10 years with Fox News, where he created the Fox411 column. His movie reviews are carried by Rotten Tomatoes, and he is a member of both the movie and TV branches of the Critics Choice Awards. His articles have appeared in dozens of publications over the years including New York Magazine, where he wrote the Intelligencer column in the mid 90s and covered the OJ Simpson trial, and Fox News (when it wasn't so crazy) where he covered Michael Jackson. He is also the writer and co-producer of "Only the Strong Survive," a selection of the Cannes, Sundance, and Telluride Film festivals, directed by DA Pennebaker and Chris Hegedus.

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