Sony Fires Studio Chief Mark Canton

Mark Canton was fired Friday as head of Sony Corp.’s ailing movie studio, ending a lengthy melodrama and underscoring the chaotic condition of the Japanese electronic giant’s film holdings.

Ousting Canton may be only the first of several moves to play out over the next few weeks, with further top management purgings possible, sources said. Sony Pictures Entertainment President Alan Levine, who fired Canton, is widely seen by Hollywood to be on shaky ground and could be replaced soon.

Levine’s status appears in doubt in the wake of Sony President Nobuyuki Idei’s refusal Thursday to embrace Levine’s plan to hire William Morris Agency executive Arnold Rifkin to succeed Canton.

In a brief phone call late Friday, Levine declined to answer questions about his future at the studio, saying “I’m still trying to sort out all this stuff too.”

Canton’s departure as chairman of Sony’s Columbia and TriStar units is another admission that Sony has yet to get it right when it comes to the movie business. Since plunging into Hollywood in 1989, the company has been plagued by management upheaval, profligate spending and, this year, a long string of box-office disappointments that include “The Cable Guy,” “The Fan” and “Multiplicity.” Two years ago, the company posted a $3.2-billion loss on the units.

As an interim move, Sony will place the studios in the hands of Vice Chairman Lucy Fisher--recently hired from Warner Bros. by Canton--and Columbia TriStar President Fred Bernstein, who oversees studio business matters. Both will answer to Levine.

According to sources, Rifkin received a contingent offer from Levine, then flew to New York for a clandestine meeting Thursday morning with Idei, Levine and another Sony executive. Sources said the meeting went badly. Discussions were awkward and tense, no doubt exacerbated by reports of Canton’s impending firing and word of the Rifkin talks having leaked to the media. Idei abruptly ended the hourlong meeting, saying he wanted more time to think things over.

Rifkin returned to Los Angeles at lunchtime and by the end of the day had accepted a lucrative counteroffer from William Morris, where he is the worldwide head of the venerable agency’s motion picture division. Sources say Rifkin’s new contract is thought to be for at least five years, with indications that he will be made president of the agency by the end of the year.

Idei’s reluctance to endorse Levine’s move suggests that the Sony Pictures president overplayed his hand with his Japanese boss. Levine waited until Tuesday to tell Idei that he favored Rifkin for the job, even though he had been talking quietly with the talent agent since early summer.

The collapse of the Rifkin plan sends a message that Tokyo has Levine on an exceptionally short leash, executives said.

Sony’s bigger problem, which this week’s events demonstrate, is that Idei has yet to figure out how to fix things at the studio. Even though movies represent less than 10% of Sony’s total business, the operation continues to be an albatross for the huge company. Chronic internal strife has all but paralyzed Sony’s Culver City lot, even though some of its operations--notably television--are doing well.

Idei has yet to formulate an overall strategy for the direction of the company. In recent months, Idei is said to have been privately soliciting the views of top entertainment executives at rival companies--including Michael Ovitz, David Geffen, Rupert Murdoch and Barry Diller.

As for Rifkin, the longtime agent put himself at considerable risk earlier this week by acknowledging to his staff that he had been approached by Sony and was interested in the job. He has been widely criticized in Hollywood circles for allegedly jeopardizing Morris. The agency’s clients, who include actors Bruce Willis, Sylvester Stallone, Whoopi Goldberg, John Travolta and Geena Davis and director Quentin Tarantino, are vulnerable to raids by rival agencies under such circumstances.

Rifkin said he has no regrets about having told his staff the truth and said he has received “the most unbelievable support from them and from our clients.”

As for Canton, the executive was considered an enthusiastic cheerleader for projects but someone whose chronic optimism sometimes got him into trouble when movies didn’t perform up to expectations. He also has good talent relationships and is said to have received supportive calls this week from such top stars as Tom Cruise and Jack Nicholson.

But this year’s box-office drought sealed his fate. “From a bottom-line perspective, Mark just wasn’t the guy,” one Sony insider said.

Canton was gracious publicly, saying in a statement that “I gave my heart to the company.” Privately, however, he is said to be seething that he was allowed to dangle for weeks with his job clearly in doubt.

Canton is expected to become a film producer, although sources said he has no definite plans in place. He is known to have had discussions with producer Jon Peters, a former Sony executive, about joining his Warner Bros.-based production company.

Canton attorney Jake Bloom drove to the Sony lot Friday to start settlement discussions, which are expected to be resolved by early next week. Canton, who has three years remaining on his contract, stands to leave with as much as $17 million.