Newspaper article International Herald Tribune

Amid Turmoil, Sony's Television Unit Flourishes ; Small-Screen Business May Lack Sizzle, but It Still Scores in Revenue

Newspaper article International Herald Tribune

Amid Turmoil, Sony's Television Unit Flourishes ; Small-Screen Business May Lack Sizzle, but It Still Scores in Revenue

Article excerpt

Sony Pictures Television, a largely hidden operation, falls short on its U.S. network shows but argues that it has a lucrative and underappreciated international business.

Next month, U.S. broadcast networks will introduce more than 20 new series, and four of the most ambitious will be supplied by Sony.

"The Blacklist" stars James Spader as a criminal mastermind. "The Michael J. Fox Show" places Parkinson's disease at the center of a sitcom. The comedy "Meet the Goldbergs" is drawing comparisons to "The Wonder Years." And "The Queen Latifah Show" counts Will Smith and Jada Pinkett Smith as producers.

Yet the investor Daniel S. Loeb blasted the studio a few weeks ago in a publicly disclosed letter, saying that, among other things, he was "disappointed to see that Sony's television business lacks new material."

So it goes for Sony Pictures Television, a largely hidden operation that has at times felt like a second-class citizen inside its own conglomerate and in Hollywood broadly, with the spotlight going instead to the movie division. "It hasn't always gotten the recognition it deserves," Michael Lynton, the chief executive of Sony Entertainment, said by telephone.

That is changing, partly because of prodding by Mr. Loeb. In May, Mr. Loeb told Sony that his hedge fund, Third Point, had become its largest shareholder, with a 6.5 percent stake, and urged it to spin off part of Sony Entertainment, which includes film, television and music businesses. The Japanese conglomerate rejected that proposal Aug. 5 but made one concession, saying it would begin disclosing more financial information about the studio's performance. (As a result, Mr. Loeb has backed down for now.)

Sony Entertainment, which produces cable hits like "Breaking Bad" and the lucrative "Dr. Oz Show," has historically provided very little financial transparency, reporting its film and television operations on a combined basis, for instance. Analysts can only guess at how much money the television side generates, estimating that it now contributes more than 50 percent of the studio's operating income.

Despite the pledge of more transparency, Sony may well continue to report its movie and television results as one. Splitting off television would make the movie side look bad, and this is still Hollywood: image is everything. The company's movie operation has struggled this summer, with a string of disappointments like "After Earth" offsetting successes like "This Is the End."

But Sony has at the very least realized that its television division has a positive story to tell. In fact, the company's statement rejecting Mr. Loeb's spinoff proposal led with a business it almost never discusses: its cable networks. It has 124 around the world, including the Game Show Network in the United States, with revenue of $1.5 billion in the company's last business year, up from $600 million in 2008. Sony says its networks reach about 840 million homes worldwide.

"Clearly, our networks business will continue to be a major driver of growth," said Mr. Lynton, noting in particular a suite of channels in India.

In a separate interview, Steve Mosko, president of Sony Pictures Television, pointed to the studio's international production business. …

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