Guber Paints Rosy Picture for Sony Despite a Shaky Image of Studio

Sony Pictures Chairman Peter Guber sounded frantic when he picked up the phone over the weekend. In a torrent of words, he explained that his house had sprung a leak. “Have you ever seen a downpour like this?” he asked. “I must have 350 buckets spread around the place!”

When it rains it pours, it seems--at least in Guber’s world. It was only last week that he suffered an equally serious management leak when motion picture group President Jonathan Dolgen resigned to take the top job at Paramount Pictures under its new owners, Viacom Inc.

Dolgen was a key strategist for the company, a division of Japan’s Sony Corp., and his departure left a void in its executive suite that may have undermined recent efforts to project an image of stability. In some circles, releasing Dolgen was even seen as a symbolic act of corporate retreat that could presage other changes.

Some downsizing has already occurred. The company’s four distribution outlets--Columbia Pictures, TriStar Pictures, Sony Classics and Triumph--plan to release 38 movies this year, compared to 44 in 1993. Sony has also consolidated some TV and movie operations. Hollywood executives contend that the company now needs the New York office’s permission to move on projects costing $40 million or more--and Japan’s permission for anything costing $60 million or more.

In one of his first extended interviews in recent months, Guber vehemently denied that. He said key spending decisions still reside with him, and he pointed out that Sony remains one of Hollywood’s biggest film distributors, with a combined 19% market share last year.

In defending Sony against the somewhat loopy reputation it’s developed over the years, he noted that the company is still committed to producing a “critical mass” of entertainment and that there’s “every bit as much capital available” to fund operations this year as last.

Asked if he’s happy in his job, Guber, 52, replied: “Happy is the wrong word for me. . . . There’s not a minute when I’m not in wonder at the complexity of what confronts me. But as long as there’s a challenge, I’ll stay involved. When there’s not, I’ll move on.”

Guber said Sony’s biggest challenge is maintaining its key role in the entertainment and technology universe, which probably will require it to bring in strategic partners. Some sources contend that the company undermined its efforts on Wall Street to sell a 25% stake in the company for $3 billion by letting Dolgen escape--which intensified concerns about management. Sony Corp. executives in Tokyo were also said to be upset about the timing.

But executives insist that discussions are still under way, with cable magnate John Malone, financier Marvin Davis, Pacific Bell, GTE and Bell Atlantic among those that have taken a look at the company.

“There’s nothing imminent, but deals can happen very quickly,” Guber said.

At the same time, he denied speculation that Sony will entertain offers for TriStar Pictures. Many industry executives consider it wasteful for Sony to operate TriStar as a stand-alone production and distribution company, because it already funds Columbia Pictures.

Some observers also took it as a sign that the studio might be up for sale when TriStar Chairman Mike Medavoy recently resigned and Sony shifted management control to a team headed by Columbia Pictures Chairman Mark Canton and the now-departed Dolgen. But Guber said Sony views TriStar as a key asset within the company and has no plans to unload it.

“We’re committed to TriStar, period,” he said. “After five years, that issue should be resolved. A parade of people here and in New York have offered to buy it. But I wonder what part of ‘no’ they don’t understand. Some of these people must be dyslexic and think no means ‘on.’ ”

Or they may be among the masses who find themselves perpetually confused by the day-to-day goings-on at Sony Pictures, which has suffered from frequent management turnover, reported cash shortages and infighting. Because of its multilayered management, Sony also has a reputation for being slow to make creative decisions. Said entertainment analyst Jeffrey Logsdon of Seidler Cos. in Los Angeles: “They know how to confound confusion with commotion out there.”

When Sony Corp. bought the entertainment company for $3.4 billion plus sizable debt in 1989, it openly aspired to duplicate Warner Bros.’ success as a mass producer of movies and television shows. Now many critics maintain that the electronics giant, shaken by the downturn in its core business, may actually be moving Sony Pictures in the opposite direction.

The Culver City-based studio recently trimmed its network TV division by putting Jon Feltheimer in charge of both Columbia Pictures TV and TriStar TV. TriStar’s “Mad about You” is the company’s only bona fide hit in recent years. Sony has never had a big first-run syndication presence, though it has a contender with “The Ricki Lake Show.” In the game show world, Sony also owns such perennials as “Wheel of Fortune” and “Jeopardy.”

The company has tried to launch the Game Show Channel, with only limited success. It also sold “Seinfeld” into syndication recently, though sources say Sony may get less from that deal than many assume because the show is produced by Castle Rock Entertainment.

Guber concedes that Sony has an image problem, which he mainly attributes to the massive publicity that attended the failure of “Last Action Hero” last summer. In fairness, he said, critics should also acknowledge such hits as “Philadelphia” and “Groundhog Day.”

“We have consistently been among the top-tier companies,” Guber said. “Our strength is in providing content, and we’re still dedicated to putting out a large number of movies.”

While Sony Corp. releases only limited financial information on Sony Pictures, it recently reported that revenue dropped 3.7% to $795.9 million for the three months ended Sept. 30, compared to the year before. Revenue was down 13.3% in the first six months to $1.4 billion.

Many people see “Wolf,” the big-budget thriller starring Jack Nicholson that’s set for a June release, as the biggest indicator of how Sony Pictures may fare in 1994. Pointing to that and other upcoming films--such as Kenneth Branagh’s “Frankenstein,” “The Quick and the Dead” and Castle Rock’s “City Slickers 2”--Guber maintains that everything will work out fine.

“We’re still committed to the same management and philosophy,” he said. “I don’t consider this a job with training wheels.”