Company Town : Sony’s Summer Plans: Trim Some Fat

In the heat of summer, Sony Pictures Entertainment is getting ready to shed a few layers of fat. The company is investigating ways to consolidate some operations to cut costs and increase efficiency, sources confirmed Thursday.

Sony’s video and international divisions are among the targets of the downsizing move, but the broader goal is to eliminate duplication throughout the company. Sources say the consolidation could eventually reach as high as the marketing and distribution divisions at its two studios, Columbia Pictures and TriStar Pictures.

While Sony has come under criticism recently for its slim movie output and slacking financial performance, people close to the company say the upcoming moves do not represent a retrenchment of any kind.

“It’s good business to do things like this,” said one executive who spoke on condition of anonymity. “We’re minding the store, but we won’t change the fundamental way we do things.”

Rumors of possible changes at Sony’s Culver City lot have circulated for weeks, largely based on reports of a cost-cutting mandate from Sony Pictures Chairman Peter Guber. Guber and Sony President Alan J. Levine, who’s looking into the cuts, declined to comment. But sources stressed that there is no plan to merge Columbia and TriStar or to sell TriStar.

Sony Pictures has been publicly seeking a 25% investor for several months, with no takers. Asked about a merger of the studios, which are already under a single management team, one executive said: “That’s not even being considered. We still feel they are more valuable to the company separately. Nor is there a ‘For Sale’ sign on any of these assets.”

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“Downsizing” has emerged as the corporate mantra of the ‘90s, so Sony’s moves are not unique. But the mere suggestion of upheaval has still managed to rattle some employees. One executive on the Sony lot said many people fear that a sweeping overhaul will occur.

“There’s way too much paralysis, fear and inertia for this to only be about small changes,” one complained. “And all of the buzz is coming from the inside.”

Sources said the company is focusing for now on offices scattered around the globe where two or three people are doing similar jobs. For instance, Columbia, TriStar and their sister company, Triumph Releasing, have overlapping executives in several areas. Said one executive: “The idea is to cut down on duplication and get better up to speed in the marketplace.”

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Sources added that Sony’s plans could take up to a year to unfold. The company has already started consolidating some less visible operations, such as the physical distribution facilities for Columbia and TriStar. The two studios have also been put under a single management team of Motion Picture Chairman Mark Canton and President Fred Bernstein.

That’s intensified speculation that more downsizing will follow. In particular, company sources say, TriStar marketing chiefs Buffy Shutt and Kathy Jones could be handed more authority. But another studio source denied Thursday that there will be any broad consolidation of domestic marketing and distribution, which each studio handles independently.

“This place is finally in really sharp shape,” the source said. “There could always be a redesign over time, but only because it makes sense within the existing structure.”

Still, Sony is nothing if not flexible. Even with recent efforts to project an image of stability, sources within the company concede that it is in continuing exit discussions with Amy Pascal, an executive vice president of production at Columbia, who is interested in a top job at Turner Pictures. Sony formally declined to comment, but sources say Pascal may still be released. Said one: “Amy’s still under contract. But her options are being explored.”

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Unburying treasure: Speaking of options, sources say Columbia is anxious to move full steam ahead with its pirate movie, “Mistress of the Seas,” now that “Cutthroat Island” has hit stormy waters.

“Mistress” has been in dry dock for months, getting script revisions. But with reported delays in “Cutthroat,” Carolco Pictures’ female pirate epic, sources say Columbia is “very bullish about moving forward.” Jon Peters, who developed “Mistress” for the studio before taking his production company to Warner Bros., is also said to be pushing to get the project launched.

“Mistress” was originally set to star Geena Davis, who, ironically, jumped ship to “Cutthroat Island.” Since then “Cutthroat” has run into problems of its own. Michael Douglas recently pulled out of the co-starring role, and Keanu Reeves (“Speed”) and Liam Neeson (“Schindler’s List”) have reportedly turned down offers to replace him.

Columbia has some problems of its own, however. Sources say that, while the script is essentially ready, the studio still hasn’t found the right actress or director.

At Carolco, meanwhile, sources are denying speculation that delays in “Cutthroat” could help sink the troubled independent production company. A Carolco spokesman said Thursday: “It is likely, though not certain, that there will be a new actor (hired for ‘Cutthroat’) by the middle of next week. Nothing has slowed down in terms of the pre-production, and Carolco considers it extremely likely we will make this movie.”

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Hollywood executives who do business with Carolco generally agreed that the company should survive its latest setback, though they said it’s imperative that Carolco get something into production soon. The company lost a movie in May, when “Crusade,” which was set to star Arnold Schwarzenegger, collapsed.

Said one deal maker: “Nothing in the Carolco business plan necessitates (movies) being made at all costs. But obviously, they have to get something in the works, but there a lot of things they could do.”

Carolco’s development projects include “Spiderman” and “Showgirls,” though sources said neither is even close to ready.