That unit, known as Sony Entertainment Inc., includes film and television studio
The proposal also raised the specter of a possible Sony alliance — perhaps with
"Many casual observers would be surprised to learn that while Sony is electronics, much of its current value is derived from a hidden gem — Sony's Entertainment division," wrote Daniel Loeb, the founder of Third Point, which holds $1.1 billion worth of Sony shares.
Brian Wieser, a senior analyst at Pivotal Research Group, said that there is "good value inside of Sony Pictures," but noted that some investors may not be aware of the strengths of the company because it is part of a large corporation.
"Most investors don't like the movie business because it is too volatile, too hard to predict," Wieser said. "But you don't have to like the movie business to like SPE. A substantial share of the profitability is coming from outside the film studio," from divisions that cover home entertainment and television programming.
Last week Sony Corp. announced its first annual profit since 2008. A big part of the success was Sony Pictures. The division posted operating income of $509 million, up 40% from a year earlier. Sony attributed the improvement in part to blockbusters
Under the terms of Loeb's proposal, Sony would retain a majority stake in Sony Entertainment, which is headed by Chief Executive Michael Lynton.
Sony spokesman Shiro Kambe said that investment in the company is welcome — before adding that Sony Entertainment is not for sale.
A CBS spokesman declined to comment. But CBS has said in the past that it would certainly look at any significant entertainment assets that become available.
Many people see a nearly perfect marriage in a tie-up between Sony's entertainment assets and CBS, which, despite being one of the smallest of the major media companies, has among the largest ambitions.
Moonves, who has had aspirations of running a major studio, launched a boutique label CBS Films. Sony, meanwhile, owns many television jewels, which would complement CBS' robust television operations and its well-stocked library of classic TV shows, including
Sony Pictures Television produces current prime-time shows such as the quirky comedy
CBS has its own thriving syndication business, churning out shows such as "Judge Judy," "
The combination of CBS and Sony Pictures would create a media conglomerate on the scale of
Unlike CBS, Sony does not own a broadcast network. U.S. communications rules forbid substantial foreign ownership of TV stations, a law that has stymied Sony's U.S. television distribution in the past.
However, Sony's library includes 50,000 episodes from 275 television series, Wieser noted, including the classics "I Dream of Jeannie,"
Sony has interest in 124 television channels in more than 159 countries, with particular strength in Latin America and Asia. It co-owns the
"By controlling Sony Pictures Entertainment, CBS could improve its exposure to revenue streams from the TV business in key territories, and many of SPE's international channels offer programming which fit well with CBS' existing content," Wieser wrote.
Sony shares Tuesday rose $1.87, or 10%, to $20.76. CBS is trading near its 52-week high. Its shares rose $1.05, or 2%, to $50.03.