Company Town : New Reel at Sony : Guber Successor Faces Challenges at Critical Time

Sony Pictures Entertainment, always in a high state of anxiety, got a bit more anxious Thursday with the announcement that Peter Guber had stepped down as chief executive and that many of his duties were being assumed by Alan Levine, president and chief operating officer.

Levine, a former high-powered Hollywood lawyer, takes over at a time when Sony needs to clarify its corporate strategy and rev up its lagging movie production. It is also unclear what role other senior Sony executives--including production chief Mark Canton--may play in the wake of Levine’s appointment.

The difference between Levine and Guber is not simply one of style: No one can imagine Levine, a member of the Hillcrest Country Club who sometimes comes across as a Republican Rotarian from the Midwest, sporting a ponytail, as Guber did a few years ago.

Levine’s role until now has been largely bottom line-oriented: He oversaw the recent consolidation of the marketing and distribution departments of Columbia and TriStar, which resulted in dozens of layoffs. Although a solid businessman, he has virtually no experience on the so-called creative side.

“He has not been in the business of courting filmmakers,” notes one observer.

That is an about-face from the one of Guber, a former producer who was known to be bored with the nuts and bolts of managing a large company. Although Guber frequently became involved in picking which films Sony would make, he gave virtual autonomy for running daily operations to various division heads.

Now the cautious Levine, who has kept himself discreetly in the background to the voluble Guber, inherits the job at a time when Sony has curtailed lavish spending that once earned it the reputation as the most profligate studio in town.

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Indeed, whereas Sony once spent too much, some people today wonder if it’s spending too little. Few Sony films now have budgets of more than $20 million. Worse, the studio lost money last year for the first time, putting pressure to keep the spending lid tightly clamped.

Sony is having another bumpy year. It’s only had one successful movie, “Wolf,” which is expected to gross at least $150 million worldwide, though there are high expectations for two upcoming fall releases: “Mary Shelley’s Frankenstein,” starring Robert DeNiro and Helena Bonham-Carter, and “Little Women,” which stars Winona Ryder and Susan Sarandon.

At the same time, however, the production pipeline has slowed so much that Sony unit Columbia Pictures had no releases between February and June. The television division, though it has solid shows in “Mad About You” on NBC, “The Nanny” on CBS and “The Ricki Lake Show” in first-run syndication, lately has failed to produce a mega-hit such as “Who’s the Boss?” in the 1980s.

“Tony Danza is still paying their salaries over there,” joked one film executive.

Sony has also been on the sidelines when it comes to any of the big strategic moves undertaken at other movie studios.

While Fox launched a highly successful fourth network and Warner Bros. and Paramount are duking out rival plans for fifth networks, Sony expanded into first-run syndication, a market it not only entered years behind the other studios but one that is shrinking.

Moreover, while Sony poured more than $100 million into refurbishing the old Metro-Goldwyn-Mayer lot, meticulously landscaping the plaza outside the Thalberg building, other studios invested heavily in launching and upgrading cable TV networks such as the USA Network and the Sci-Fi Channel, both joint ventures between Paramount and MCA, Fox’s F/X basic cable channel and the new film channel called Fox Film Studio. Sony’s first entry into cable, the Game Show Channel, had set Dec. 1 as a launch date, but it is more than a year behind schedule.

“The first and most important thing (Levine) needs to do is have a strategy,” observed one Hollywood executive who has dealt with Sony for a long time. “The second thing he needs is to have some input and involvement in the core business, which Guber never did. Guber always said, ‘It’s your decision.’ He was more like a consultant than a chairman.”

With Guber gone, Columbia TriStar Motion Picture Cos. Chairman Canton now becomes the top creative executive at the studio. It is well known that Levine, 47, and Canton, 44, are not close. Moreover, Levine will report to Michael P. Schulhof, the New York-based chief executive of Sony Corp. of America. Schulhof, a physicist who likes to pilot the Sony corporate jet, also lacks a creative background.

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Levine, who has spent years as a behind-the-scenes mediator at Sony Pictures, undoubtedly recognizes the importance that converging entertainment technologies pose to Hollywood. But to have any real impact, says one Hollywood executive, Levine is going to have to “roll out new dough. . . . Having enough production funds to make 12 to 15 pictures a year and have three succeed is just what they’ve not been doing now.”

Many insiders believe the missing creative link in the upper echelons is Jeff Sagansky, the former chief programmer at CBS who joined Sony as an executive vice president earlier this month. Sagansky was ostensibly brought aboard by Schulhof--at Guber’s recommendation--to help Sony on strategic maneuvers, including a possible sale of a 25% stake in the studio.

Sagansky--though Sony officials deny it--is seen by many Hollywood executives both inside and outside the company as poised to run the studio one day. Although it is unlikely that Sagansky, who now lives in New York, would move back to Los Angeles, several high-level executives at the studio expect him to eventually become the de facto boss.

Peter Guber’s Long Road

GUBER’S CAREER

Peter Guber, the enigmatic producer-turned-studio chief, left his post abruptly Thursday. Here’s a look at his 26-year career in the entertainment industry:

* Recruited by Columbia Pictures in 1968 for a job as executive assistant while still attending the MBA program at New York University. Rose to studio president.

* Formed Peter Guber’s Filmworks in 1976 and, with Neil Bogart, founded Casablanca Records. Merged the two companies and became chairman.

* Produced first feature film in 1977, “The Deep,” which grossed $47.3 million.

* Formed Polygram Pictures in 1980, becoming co-owner and chairman.

* Sold Polygram in 1983. Joined forces with Jon Peters and formed Guber-Peters Entertainment Co., serving as chairman of the partnership.

* Produced “Batman” in 1989, which later went on to gross a total of $251.1 million domestically.

* Columbia Pictures sold to Sony Corp. in 1989. Sony paid $700 million to secure Guber and Peters as co-chairmen of Sony Pictures Entertainment.

* Became sole chairman when Peters left in 1991. * Oversaw nine blockbusters that grossed over $100 million and 21 domestic hits grossing over $50 million during his five-year stint as studio chief.

Sources: Company reports, Baseline. SONY UNDER GUBER

Domestic market share and number of films in release from Jan. 3 to Sept. 25:

TriStar: 4.9% share, 11 films.

Columbia: 4.8% share, 16 films.

Film hits and misses during Guber’s tenure as Sony Pictures chairman: Hits

Title / U.S. Box Office (in millions of dollars): Sleepless In Seattle: $126.6 City Slickers: $123.8 A League of Their Own: $107.4 In the Line of Fire: $102.2

Misses

Title / U.S. Box Office (in millions of dollars): Last Action Hero: $50.0 I’ll Do Anything: $10.2 Lost in Yonkers: $9.3 North: $6.6

Source: Entertainment Data Inc.

Researched by ADAM S. BAUMAN / Los Angeles Times MAIN STORY: A1