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 That's according to a person familiar with the matter who wasn't
authorized to speak publicly about it since the review is not
complete. The person spoke on condition of anonymity.
The review comes as Sony prepares to discuss its entertainment
business with investors in a push to become more transparent as a
company.
Sony CEO Kazuo Hirai and Sony Entertainment CEO Michael Lynton are
to speak to investors at the Sony Pictures lot in Culver City,
Calif., on Thursday in an event that will be webcast. They will be
accompanied by the top executives from the music and television
divisions.
The push to squeeze more efficiency from its entertainment division
comes after hedge fund Third Point LLC took a $1.1 billion stake in
Sony this year and became its largest shareholder.
On May 14, Third Point CEO Daniel Loeb called on Sony in a public
letter to partially spin off Sony Entertainment with a share
offering that would increase focus on its profitability.
Hirai rebuffed the suggestion, but in a letter he released publicly
in August, he said "we recognize that our (profit) margins should be
higher."
Third Point has subsequently cut its stake to about 17 million
shares for a 1.6 percent stake in Sony as of the end of September,
according to S&P Capital IQ. At the time of his letter, Loeb said
the company had 64 million shares.
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Since Loeb's letter, Sony's U.S.-traded shares are down 10 percent,
closing Monday at $18.72.
The review comes after a weak quarter for the studio. In the three
months through September, the movie studio lost about $181 million,
which it blamed on box office disappointments such as "White House
Down." Revenue rose 9 percent to $1.82 billion, primarily driven by
the acquisition of a British TV show production company.
Music division profits rose 24 percent in the quarter to $99
million, while revenue was up 16 percent to $1.17 billion thanks to
a weaker yen and hit albums like Justin Timberlake's "The 20/20
Experience."
[Associated
Press; RYAN NAKASHIMA]
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