At Sony, Winds of Change Reactivate Rumor Mill

Leave it to Sony Corp. to always find a way back into the news. With Jeffrey Katzenberg’s career hanging in the balance at Walt Disney Studios, the latest rumors have Sony offering him everything short of its co-patent on the compact disc player to take his act to Culver City.

Driving the speculation, aside from the Disney studio chairman’s well-known desire for a promotion, is the widespread suspicion that Sony Pictures Chairman Peter Guber is likely to resign by early next year.

People close to Katzenberg deny reports that he’s held job discussions with Sony of America President Michael P. Schulhof. They say that the two executives have not seen each other in months, despite a supposed rendezvous last week at Sony’s corporate dining room in New York.

Schulhof, for his part, is mum on the company’s plans. But regardless of what happens to Katzenberg, knowledgeable sources say Guber has been fairly candid about his restlessness after five tumultuous years at Sony Pictures’ helm. With a bonus pool worth tens of millions of dollars set to kick in early next year, the smart money has Guber moving up at Sony or leaving to set up shop as a filmmaker at Warner Bros., where he co-produced the mega-hit “Batman.”

“Peter goes in five- to six-year cycles, and his cycle is about up. He’s definitely on the bungee (cord),” said one confidant.

Added another: “I think he’s intellectually interested” in what goes on at Sony, “but he’s not as emotionally committed as he once was.”

Guber’s former producing partner and co-chairman at Sony, Jon Peters, has already returned to Warner. The two recently lunched in Peters’ private dining room and toured the studio lot, but sources say there has been no formal discussion of Guber and Peters re-teaming.

Guber, who is in New York this week for meetings with Sony of America executives, declined comment on his plans. People close to the 52-year-old Sony chief denied that he’s eyeing the exit door, since he extended his contract only last November. But they were at a loss as to explain why so many key executives who do business with Sony have developed that impression.

“People have lots of ideas in this town,” said one source, who insisted that Guber has made a long-term commitment to his job. “That doesn’t mean they’re right.”

At least part of the suspicion appears to be based on Guber’s own behavior. Colleagues say he has become increasingly hostile toward the pressure-cooker nature of a job in which every multimillion-dollar move is scrutinized and second-guessed. They also point out that, with his bonus coming, Guber has amassed a fortune so large that he doesn’t need to work anymore.

Some took it as a sign that Guber was losing interest in the job when he recently cut back on his creative involvement at the company’s two studios, Columbia Pictures and TriStar Pictures.

The Sony chief may have been trying to give his executives more breathing room. But critics say Sony’s productivity has suffered as a result. The company, which made a big deal of its nearly 20% combined domestic box office market share at the end of last year, is mired around 11% so far this year. Columbia Pictures’ big summer hopes died with the disappointing performances of “City Slickers II,” “Wolf” and “North.” At TriStar, meanwhile, a dispiriting paralysis has set in. It’s been nine months since the studio green lighted a movie.

Other parts of the company, including its TV production and exhibition divisions, are performing better--and Sony plans to consolidate some operations to cut costs. But the company is still struggling to stabilize its executive ranks. Amy Pascal, an executive vice president of production at Columbia, is expected to depart soon for a top job at Turner Pictures. One knowledgeable source said that announcement could come as early as next week.

If Guber goes, Sony is widely expected to step up its efforts to sell a chunk of the company, after already having put 25% on the block. It could offer an investor some voice in future management. New leadership could also be used to promote a stock offering on Wall Street, sources say.

Whatever develops, people close to Guber point out that he has always privately characterized himself as a short-termer. In conversations he’s fond of saying, “We’re all just employees.” Moreover, many contend that his real talents are being wasted.

“This is about a different corporate temperament,” one friend said. “Everyone has always wondered about his suitability to a corporate job. Peter is more suited to being a producer, and he’s not producing.” The source also noted: “No one ever thought Peter was in this for the long run, but I really don’t think he’s going anywhere for a few years. He pays attention to movies like a producer would. In that way, he’s dedicated to a fault.”

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The Money King: Walt Disney Co. can whistle “Hakuna Matata” all the way to the bank and beyond now. In a new report, entertainment analysts Jessica Reif and Harry Wagner of Oppenheimer & Co. in New York project that the “The Lion King” will contribute nearly $1 billion to the operating profit at Disney over the next two to three years.

Reif and Wagner say the animated feature will become “one of the most, if not the, most profitable films of all time,” if their projections are correct. “Lion King” is already tracking 83% above “Aladdin” in foreign territories and is expected to take in more than $250 million at the domestic box office. When the worldwide audience is accounted for, they say its total gross should reach $700 million.

Add to that all of the home video, video game, album, merchandise and other revenue streams and “The Lion King” is an unbelievable bonanza. Disney has also scored with its video, “Return of Jafar.” Nearly 10 million copies have sold domestically, according to Reif and Wagner.