Speculation on Schulhof Successor Centers on Top Assistant Sagansky

Faced with mounting criticism of his leadership, Michael P. Schulhof, the head of Sony Corp.’s U.S. businesses, late last year picked a seasoned second-in-command: Jeff Sagansky.

The Harvard-educated Sagansky was a former CBS programming whiz credited for lifting the troubled network to top ratings in the early 1990s. Sony, having just taken an embarrassing $3.2-billion write-off on its Hollywood assets, needed all the help it could get.

Speculation now centers on Sagansky’s role in the company in the wake of Schulhof’s abrupt resignation and the emerging role of Sony’s two top Japanese executives, Nobuyuki Idei and Norio Ohga.

Some observers expect Sony, in a bid to stabilize its far-flung electronics and entertainment enterprises in the U.S., to quickly tap the respected 43-year-old Sagansky for the top job.

“Bringing in a well-known new CEO right away is a terrific way of showing outsiders that management is stable,” said Everette Dennis of the Freedom Forum Media Studies Center at Columbia University.

But Sony sources insist that no such move is imminent. Instead, Idei and Ohga will for the time being head up U.S. operations, with the New York-based Sagansky reporting to them.

“Any speculation should be described as premature,” a Sony spokeswoman said. “We’re not 100% clear on [the management structure] at this point.” Sagansky was not available for comment Tuesday.

*

As long as Sony maintains its Hollywood investments, its choice of a top U.S. executive will probably remain critical, analysts say. The Tokyo-based conglomerate has often been accused of responding too cautiously to fast-paced changes in entertainment and high tech. And its Sony Pictures Entertainment arm was sharply criticized for management excesses under former head Peter Guber.

Sagansky, whose official title is executive vice president but who has been variously described as a “strategist” and as Schulhof’s right hand, has assumed a broad-based but somewhat indefinite role to date.

He has taken day-to-day responsibility for a number of U.S. subsidiaries, including SW Networks (syndicated radio service), Sony Retail Entertainment (movie theaters) and Sony New Technologies (a new online service). Sagansky is a member of the board of Sony Pictures Entertainment and has worked with studio Chairman Alan J. Levine, but generally has taken a hands-off role.

He has also overseen the building of the company’s huge new entertainment complex in San Francisco, complete with movie theaters, theme restaurant and a Sony electronics superstore.

But Sagansky’s most prominent Sony project has been presiding over last September’s launch of PlayStation, a state-of-the-art video game machine that features advanced 3-D graphics.

The company said sales of the machine have been “phenomenal,” estimating sales by year-end of 2 million units in Japan, 700,000 in the U.S. and 500,000 in Europe. The machine lists for $299. PlayStation appears destined to become one of the few bright spots among the conglomerate’s U.S. enterprises.

Insiders said that Sagansky’s future role at Sony is likely to be determined in the next few days.

Before joining Sony, Sagansky headed CBS’ Entertainment Division and was president of TriStar Pictures before it was purchased by Sony.