The Restless Guber Agrees to Stay Put

When Peter Guber recently purchased a multimillion-dollar co-op apartment overlooking Manhattan’s Central Park, rumors surfaced that the Sony Pictures Entertainment chairman was going corporate.

Guber is personally close to Sony Corp. of America President Michael P. Schulhof and has occasionally lobbied for more responsibility after four years of running Sony’s movie and TV operations. But the speculation proved to be premature when Guber reportedly pledged to the co-op’s board that he and his wife would spend only a limited amount of time there.

Tracking the movements of the hyperactive and colorful Guber has long been a favored sport of the business entertainment press, especially with speculation growing over the contract status of Guber and several of his key executives.

People close to the studio say Guber--a successful producer of such hit movies as “Batman” and “Rain Man” with partner Jon Peters before he took over Sony--had seemed ambivalent about remaining in the catbird seat, even though he enjoys the many perks that come with the job, including use of the corporate jet.

Seeking to end any speculation about Guber’s status, Schulhof took the unusual step of going on record Thursday afternoon to declare Guber is now operating under a “long-term agreement.” No specifics were provided, but “long- term” is believed to mean morethan five years.

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Any move by Guber would have had a domino effect on his multilayered upper-management team of Filmed Entertainment President and Chief Operating Officer Alan J. Levine, Motion Picture Group President Jonathan Dolgen, Columbia Pictures Chairman Mark Canton and Tristar Pictures Chairman Mike Medavoy, whose future has long been the subject of heated gossip in Hollywood.

Another issue among Sony executives is a bonus pool. Past reports have estimated that the senior executives will split about $50 million from the pool next year, largely at Guber’s discretion, but others say the water is actually much shallower than that because of the company’s performance.

Schulhof confirmed that he has worked quietly over the past nine months to get long-term agreements from Guber and others in the company’s “software” businesses--movies, music, multimedia and its new Sony Signatures merchandise unit--to lock in some management stability and stagger contracts so they don’t all expire at once.

“The top tier of executives at Sony Music, Sony Pictures, Sony Electronic Publishing and Sony Signatures all have long-term agreements spread over a four-to-seven-year period,” Schulhof said.

Sony Pictures’ management has been under the microscope all year, serving as something of a perpetual lightning rod for controversy. This summer saw its Columbia Pictures unit pummeled in the press over the failure of “Last Action Hero.” Soon after came the Heidi Fleiss scandal, in which rumors that were never substantiated linked some Sony executives to the alleged madam.

Despite Schulhof’s efforts to stabilize management, there are continued rumblings of internal upheavals affecting business. Lawyers, agents and managers who regularly make deals at Sony say decisions often are delayed or permanently left hanging. There are also widespread reports of infighting between Levine and Dolgen, which some blame on their individual duties being too vague.

Sony’s slow movement has led to speculation that the company may be suffering a severe cash crunch. But people close to daily operations insist the money is there, once Sony makes up its mind how to use it.

They also point out that Sony’s combined domestic theatrical revenue is $855 million so far this year, compared to about $720 million at this time last year. Sony’s market share is 19%, paced by such hits as “In the Line of Fire,” “Sleepless in Seattle” and “Cliffhanger.” Neither figure, however, says anything about profitability.

“Sleepless” and “Cliffhanger” were released by Tristar’s Medavoy, who bounced back fairly well this year after a bleak 1992. Medavoy’s upcoming slate also looks strong, with director Jonathan Demme’s “Philadelphia” coming out this month and five projects in or starting production.

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Outside of Guber, Schulhof didn’t name which executives have signed long-term agreements. The only major name believed to still be an open question is Medavoy, who is said to be undecided about his future.

Rumors of Medavoy leaving have continued largely based on reports of bad blood between him and Guber. But while most of the town seems to take his departure for granted, Medavoy says nothing is settled.

“The truth of the matter is, I have time on my contract,” he said.

“All the people at Sony have been very supportive, including Peter Guber,” Medavoy said.

“When the time comes at some future point, I’m sure everybody will decide what they want to do. But I’m not prepared to say anything now because I don’t have to, and neither do they.”

Should Medavoy leave, one rumor has Columbia Pictures Chairman Mark Canton managing both studios, which would technically remain independent because Sony feels they have greater value that way.

While Canton has had his own problems, with “Last Action Hero” and ongoing controversy over the upcoming “I’ll Do Anything,” he remains close to Guber.