TOKYO (Reuters) – Leaked e-mails reveal a cultural gulf between Japan’s Sony Corp and Hollywood subsidiary Sony Pictures Entertainment, highlighting the challenge of CEO Kazuo Hirai to turn around the money-losing company under the slogan One Sony.
The Japanese conglomerate is heading for its fifth net loss in six years, raising questions about its ability to hold on to businesses ranging from making television sets to movies. While activist hedge fund investor Daniel Loeb has given up his call for Sony to spin off its entertainment arm, others believe it should exit weak product lines such as TVs.
Bilingual Hirai is linked to both sides of Sony, having experience at both the video games and music businesses. He is therefore widely considered one of the company’s few executives capable of bringing together the manufacturing and movie-making cultures of Tokyo and Hollywood.
But along with racial jokes related to US President Barack Obama and disparaging remarks about top actors, leaked e-mails from Sony Pictures executives reveal tension between Hirai and the film studio.
The e-mails were leaked following a cyberattack on Sony’s computer systems last month by a group demanding the company pull upcoming film “The Interview”, a comedy criticised by North Korea for depicting the assassination of its leader. They show Hirai ordered the film to be toned down and encountered resistance from the film’s creators including co-director and actor Seth Rogen. Sony Pictures co-chairman Amy Pascal tried to mediate.
The e-mails also show film executives viewed Hirai and Chief Financial Officer Kenichiro Yoshida with trepidation ahead of cost cuts aimed at increasing profit margins.
Sony Pictures Chief Executive Officer Michael Lynton in October forwarded to Pascal an email from Yoshida, marked “confidential” and seeking “serious consideration to modifying the Entertainment executives compensation plans”.
“This is also what I am now dealing with,” he wrote.
Sony declined to comment for this article and Hirai was not made available for interview.