New York Post

Six months after assuming the CEO position at Sony, Kazuo Hirai is coming under increasing pressure to turn around the sluggish entertainment and electronics giant.

Shares are down 28 percent since the 30-year Sony veteran took over on April 26, the company’s US headquarter, the Philip Johnson-designed “Chippendale” building in Midtown has been put on the block, and nearly $2 billion in acquisitions have come under attack as not addressing Sony’s main problem — a lack of profits.

More recently, Hirai cut Sony’s profit forecast this year by 27 percent, to $1.7 billion — but Wall Street thinks even that pared-down number is high.

With Hirai unable to find the right solution so far, the whisper among a growing number of analysts and bankers is that Sony will soon be forced to sell its lucrative US entertainment business.

Call it wishful thinking or a keen intuition, but at media lunches in Hollywood and New York — and published reports here and there — the possibility is on the lips of most industry insiders.

“Sony’s market cap is $11.9 billion,” said one analyst who has heard the sale rumors. “The entertainment assets alone are worth in excess of Sony’s market cap, possibly more.”

The company denies Hirai is even thinking of such a sale.

“Sony’s entertainment businesses are not for sale,” Jim Kennedy, a Sony spokesman said. “Period.”

Sony USA, run by Michael Lynton, houses a film studio readying the release of the latest James Bond movie “Skyfall,” as well as a TV production house known for its “Seinfeld” library and its vibrant slate of programs, including ABC’s “Happy Endings.”

Then there’s Sony Music, the No. 2 player in the music business.

Revenue at the entertainment division represents 17 percent of sales.

Despite the denial, rumors about a possible sale are hard to miss.

This week, a story in the Hollywood Reporter said Lynton had been approached by Time Warner boss Jeff Bewkes about a potential position there — the implication being that Sony USA will be sold and Lynton would need a place to land.

Another whisper is that the billionaire owner of Warner Music, Len Blavatnik, has his eye on Sony USA.

Blavatnik, though, has not made any overtures yet, sources said.

There was even the rumor last week, passed on by two sources that a financial book on Sony USA is out. Neither said they saw it and Sony denies its existence.

CBS boss Leslie Moonves told the Wall Street Journal this month he’d be interested in bidding if Sony USA were for sale.

Other media executives are said to have traveled to Japan recently to meet with Sony brass about buying the entertainment business.

What can’t be denied is that Sony needs a quick solution to its financial problems.

Moody’s Investors Service isn’t seeing a rosy future for Sony.

In a note an Oct. 12 note, it downgraded Sony’s long-term senior unsecured bond ratings to Baa2 and moved its outlook to negative.

“Demand for games consoles and compact digital cameras is likely to continue to decline due to the integration of gaming and camera functions into smartphones,” it said.

http://www.nypost.com/p/news/business/shaken_stirred_3TnvnLrtequfVldkw24lCK#ixzz2APS85VUh

"Revenue at the entertainment division represents 17 percent of sales".
Revenue means Fuck all when it isn't coupled with Profits. How does Sony fair in this regard? (I hope Skyfall will help them in this regard)

Well I doubt the rumor in its entirety. There could be aspects of their business they are looking to sell off perhaps. Sony hasn't had the time yet to have a turn around that Kaz has been trying to make. Maybe they will hold out for that, but maybe they have a few things they plan to scrap. I don't know, but it sure does seem that businesses are just trying to vulture Sony while Sony is far more likely to weather the storm than another company in their position would.

Pictures and music always profit every year and almost never post a loss in any quarter. Seems ridiculous that they'd sell two parts of their company that constantly make quite high profits.

Is this for a sale of the company as a whole or are they just talking several divisions? And I agree with Chark on the time stuff. They need more then 6 months to sort out a plan since these things take time. Of course as nintendo has proven investors can't wait. They want their money tomorrow.

Why do people expect them to sell the successful parts?

No surprise that everyone is after sony's music business and columbia also, they are the only 2 things sony is doing right these days "profit wise"

Because no one would buy the non successful ones?

I don't believe it. Why would they sell Sony Music now that they have bought EMI and are the biggest music publishing in the world? It makes no sense.

"and nearly $2 billion in acquisitions have come under attack as not addressing Sony’s main problem — a lack of profits"

YES. Sony buying Gaikai, that medical lenses venture, among other things they shouldn't have done. They are on a spending spree when they have to make money first.

There's a tidbit news article on a Brazilian business mag I subscribe this week.

It's called "For Sony, the best defense is attacking". It tells that, contrary to what most expect, Kaz is not spending less, but more with those 2 billion investments they did recently and that the market is still skeptical about that.