Sony chief says film studio not for sale - Financial Times

Sony’s film and television studio is not up for sale and will remain as an independent player despite a wave of consolidation in the global entertainment industry, according to the Japanese group’s chief executive.

The merger between Discovery and WarnerMedia as well Amazon’s potential $9bn deal for film studio MGM have reignited investor interest in the future of Sony Pictures Entertainment, which analysts say could be worth as much as $30bn.

In an interview on Wednesday, Sony’s chief executive Kenichiro Yoshida said that Sony Pictures is crucial to the group’s strategy to become a global provider of content across music, films, games and animation.

“There is drastic realignment in the media industry, but I think our strategy of creating content as an independent studio while working with various partners will work,” Yoshida said. He added that there had been no change to his view that Sony Pictures should be part of the wider group.

While traditional media groups have moved to build more scale by combining with rivals to compete against the likes of Netflix and Amazon, Sony has taken a different approach. Through recent distribution deals with Netflix and Disney, it has strengthened ties with streaming services while investing in niche animation subscription platforms.

Sony Pictures’ film franchises include Spider-Man and Jumanji.

Under Yoshida, Sony has also taken steps to more closely link its various entertainment services, including converting popular PlayStation games such as Uncharted into films, or extending hit animation series Demon Slayer: Kimetsu no Yaiba into TV programmes, music and movies.

“I think the reason we were able to sign good deals with Netflix and Disney is because they were attracted to our PlayStation Productions pipeline. We can strengthen our ability to create content through such group-wide collaboration,” Yoshida said.

During a strategy briefing on Wednesday, Sony said it would spend ¥2tn ($18bn) over the next three years with a focus on expanding its entertainment assets and other technologies. In the past three years, it has signed more than $5bn worth of deals, including buying EMI Music Publishing for $2.3bn and a proposed $1.2bn acquisition of AT&T’s anime streaming service Crunchyroll.

When asked whether Sony considered buying MGM, the film studio behind the James Bond franchise, Yoshida said the group was constantly considering opportunities for mergers and acquisitions. “I think MGM has an incredible library [of movies and shows], but everything comes with a price and that needs to be considered,” he added.

While consolidation in the industry has highlighted the potential value of Sony’s film and TV business, analysts say there may be fewer prospective buyers for Sony Pictures if any deal for Amazon to buy MGM goes through.

“Over time, we expect Sony to face greater competition for talent and projects from smaller independent houses specialised for making and selling content to streaming services. Demand is high, but supply is growing,” Macquarie analyst Damian Thong wrote in a recent report.

Thong has argued that a sale of Sony Pictures would be the best way to extract value from the business so that proceeds could be used in areas such as games, although he has conceded such a move is unlikely.

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