Sony Corp. said Tuesday that it would proceed with its $200-million acquisition of Guber-Peters Entertainment Co. regardless of whether Jon Peters and Peter Guber obtain releases from their five-year movie production contract with Warner Bros.
The Japanese consumer electronics giant had previously said the offer would expire Oct. 25 if Guber and Peters didn't get the release. The film producers are to be named co-chairmen of Columbia Pictures Entertainment when Sony completes its $3.4-billion acquisition of the movie studio.
Several individuals familiar with the contract release negotiations said the ongoing talks had turned into a high-stakes affair, with Time Warner Inc.--parent of the Warner Bros. studio--threatening to sue Sony for interference with its Guber-Peters contract.
Head of CBS Records
Spokesmen for Guber-Peters, Time Warner and Sony declined to discuss the sessions.
According to the individuals, however, Warner declared the Guber-Peters contract to be worth as much as $800 million and demanded concessions that included Columbia's 35% stake in the Burbank Studios lot, an agreement by Columbia to distribute its movies internationally through Warner and even a stake in the lucrative mail-order record club owned by Sony's CBS Records unit.
Time Warner President Nicholas J. Nicholas Jr. and New York attorney Arthur L. Liman have been representing Time Warner in the talks. Sony is represented by two of its key U.S. executives, Michael P. Schulhof and Walter Yetnikoff.
Yetnikoff, who is head of the CBS Records unit, is about to be named chairman of Sony's entertainment "software committee," according to one individual familiar with the talks.
The five-year Guber-Peters contract with Warner was signed in May of this year. According to one Hollywood studio chief, the talks have broad implications. "Warner has an agenda that reaches beyond Guber and Peters," the executive said, noting the potential precedent that could be set if the contract isn't honored.
Guber and Peters have produced a number of successful movies for Warner, including the recent hit "Batman."