The grudge match between George Clooney, Sony Corp. and hedge fund kingpin Daniel Loeb continued this week as Sony executives rebuffed Loeb’s scheme to spin off the entertainment side of the electronics and entertainment business.
In a letter to Loeb’s Third Point LLC, Sony officials said they have no intention of following the hedge fund manager’s advice to sell up to 20% of their entertainment operations in a public stock offering.
“Should we require capital, or in the event of unanticipated events, our priority would be to raise it without selling a portion of an asset fundamental to our growth strategy, and without unnecessarily burdening Sony’s ability to execute our business strategy for both entertainment and electronics,” the letter stated.
Loeb muscled in on Sony’s business deliberations recently when he claimed he has amassed 7% of the company’s stock. Pointing out the poor financial performance of Sony’s two big summer movies, “White House Down” with Channing Tatum and Will Smith’s “After Earth,” Loeb demanded a shake-up in the entertainment division.
Movie star-producer Clooney, whose production company is working with the studio on his new film, “The Monuments Men,” rose to Sony’s defense, calling Loeb “a carpetbagger” who has no clue about the movie business.
“Fortunately, this business is run by people who understand that the movie business ebbs and flows and the good news is they are ignoring his calls to spin off the entertainment assets,” Clooney said in an interview with Deadline Hollywood. “How any hedge fund guy can call for responsibility is beyond me because, if you look at these guys, there is no conscience at work. It is a business that is only about creating wealth where, when they fail, they get bailed out and where nobody gets fired.
“A guy from a hedge fund entity is the single least qualified person to be making these kinds of judgments, and he is dangerous to our industry.”
Clooney said Loeb is simply trying to manipulate the market and scare studio executives into playing it safe and make only formulaic “tent-pole” movies.
Loeb has, so far, issued no response to Clooney. Though he may lack any experience making movies, he and his fellow hedge fund managers did help engineer two of the biggest financial blockbusters of recent years: “The Meltdown of 2008” and the sequel, “The Great Recession” – proving that bad decisions are not limited to Hollywood.