The Sony Corp. might be taking on massive losses from its film division, but the Japanese media conglomerate is denying recent reports it plans to sell its film and television division.
Kazuo Hirai, the head of Sony, along with outgoing Sony Pictures Entertainment chief executive Michael Lynton issued a joint statement to Variety saying the company’s commitment to the film and television division “remains unchanged” as “the value of high-quality content continues to rise.”
But those positive numbers won’t be happening soon, it seems. The corporation itself said it would take an “impairment loss” of $962 million for the final three months of last year. That represents a bit more than 4 percent of the company’s total $20.7 billion in revenue that quarter.
An impairment loss usually comes during an annual re-evaluation of a company’s assets, and typically represents the how much lower future cash flow will be compared to an asset’s book value. So for Sony, it believes the future cash flow will decrease the value of its film and television division by nearly $1 billion.
Creating the impairment could create a barrier for Sony selling the property, as it could very much reduce the sales price. It also could make it more attractive for a company like CBS Corp. that has expressed interest in buying Sony’s film and television operations.
The impairment also isn’t a huge surprise: Sony didn’t have a single film in the top 20 last year at the box office, according to The Numbers. In fact, Ghostbusters was its biggest hit with just $128.4 million.
Overall, Sony was ranked fifth among the major studios in 2016 with 8.1 percent market share, and a total gross of $907.8 million. It was far off the pace set by the Walt Disney Co., which commanded a 26.1 percent market share last year, and revenue of $2.9 billion.
Thursday, Sony reported its film and television division earned $1.9 billion in the quarter, down 5 percent from the year before. Without the impairment charge, the division would have recorded a profit of $42 million.
Sony blamed the decreases on “significantly lower theatrical revenues” compared to the year before when its films included Spectre from the James Bond franchise, and Hotel Transylvania 2. The company did get a boost in subscription video-on-demand licensing revenues, however.
Some observers believe we’ll see some movement on the sales front around the time The Emoji Movie premieres in August.
If that looks like it could be a viable future film franchise, that might allow Sony to boost a sales price for the division – a risk the company seems willing to take despite low expectations.
Latest posts by Michael Hinman (see all)
- ‘Fantastic Beasts’ Magically Turns Dumbledore Into Jude Law - April 14, 2017
- Josh Brolin Pulls Double Duty, Taking On Cable - April 13, 2017
- Worf Actor Rejects ‘Discovery’ Appearance Over Money - April 13, 2017
- The Tricorder Is Here: Self-Funded ER Doc Wins X Prize - April 13, 2017
- ‘Boss Baby’ Still Box Office Boss … But Not For Long - April 10, 2017