Harris’ Power Expanded in Sony Pictures Shake-Up

In a major executive shake-up, Sony Pictures Entertainment has restructured its operations, giving President and Chief Operating Officer Mel Harris direct authority over the company’s struggling motion picture operations.

The move is in anticipation of the retirement of John Calley, 70-year-old Sony Pictures chairman and chief executive, who is expected to leave the studio by the time his contract expires in November 2001.

The expansion of Harris’ domain beyond television production is widely viewed as a stopgap measure to stabilize the beleaguered studio until a permanent successor to Calley can be named. Former Disney Studios chief Joe Roth, who recently set up his independent production company at Sony, is being courted to take the studio helm when his non-compete clause with Disney--which precludes him from accepting a similar studio chief position--ends a year from now. Many people inside and outside Sony speculate that if Roth takes over there will be many more key executive changes.

Sources familiar with the negotiations say that Howard Stringer, Sony Corp. of America’s New York-based chief, has made it clear to Roth that the company wants him to take over the studio. But Roth may opt out. In mid-January, he will fulfill a long-held ambition to return to directing, with a romantic comedy starring Julia Roberts. Success behind the camera may persuade him not to return to the corporate world.

“The whole purpose of the change is to establish fiscal and creative discipline at the studio among a group of people I know will work together,” Stringer said by phone from Tokyo. “And I don’t have to go out and get some strange-looking people from the outside.”

Harris, 58, a television veteran who was also a top executive at Paramount Pictures for 14 years, has no direct experience in the motion picture arena, although he said he has been “participatory” in the movie operations at Sony for several months and has read scripts and attended screenings “since the day I arrived.”

Previously, no executives from the movie studio reported to Harris, who rejoined Sony about a year ago after heading television under former studio chief Peter Guber from 1992 to 1995.

The new structure is an effort to bring more of a business orientation and fiscal restraint to a studio that has been dominated by executives known more for their creative acumen.

Ken Lemberger, a 20-year veteran and top business executive at the studio, becomes co-president of SPE, joining Harris in running the worldwide operations of the company. They become the only executives reporting directly to Calley. Calley retains green-lighting authority over all movies and remains accountable for SPE’s television and home video operations, though many view him more now as a chairman emeritus.

Amy Pascal, chairwoman of Sony’s Columbia Pictures, remains the top creative executive at the studio, but she essentially has been shoved down a rung on the corporate ladder. She now will report directly to Harris rather than to Calley.

Joining Pascal on a new three-person operating team reporting to Harris are distribution chief Jeff Blake and home video head Ben Feingold, both of whom were promoted.

“I’m obviously going to have partners in Jeff and Ben and will work closer with Mel, but my ability to put movies together is going to be the same,” Pascal said.

Blake, who has headed distribution at Sony for eight years and before that at Paramount for 18 years, will take on additional responsibilities for worldwide marketing. His new title is president of Columbia TriStar Motion Picture Group, worldwide marketing and distribution.

Many at Sony speculate that Blake’s elevation over marketing will mean the departure of the studio’s worldwide marketing chief, Bob Levin.

Calley would only say, “We decided to consolidate international marketing and distribution under Jeff Blake.” Blake said he has not yet talked to Levin about his plans.

Sources said Calley informed Levin of the restructuring Monday night.

Since being hired by Tokyo-based Sony Corp. in 1996, Calley has stabilized the studio management and stopped profligate spending. Yet, under his watch, the studio has delivered few box-office hits. Sony is ranked seventh behind all other major studios with a paltry 8% market share.

Calley is directly responsible for some of Sony’s biggest money losers, including this year’s failed $50-million comedy “What Planet Are You From,” directed by his close friend Mike Nichols, and last year’s $70-million “Random Hearts,” directed by Sydney Pollack.

Calley rejected the notion that the new structure was a demotion for Pascal, the Columbia chairwoman who has been under increased pressure to deliver more hits to the studio after a prolonged box-office slump with such recent flops as “Hanging Up,” “Center Stage” and “Loser.”

“It’s a vote of confidence reaffirming her as the creative head of the company,” said Calley, noting he believes Columbia is headed for a turnaround with its upcoming releases: “Charlie’s Angels” (Nov. 3), the Arnold Schwarzenegger vehicle “The Sixth Day” (Nov. 17) and big action movie “Vertical Limit” (Dec. 8).

“It’s a business of cycles, and we’ve had a bad one,” acknowledged Calley, a beloved studio executive who had enormous success in his previous jobs. He revived MGM’s moribund United Artists movie label with such hits as the James Bond outing “Golden Eye” and “Birdcage,” and he was a top executive at Warner Bros. in the 1970s and 1980s.

Calley, who flies to Canada every weekend to be with his wife, actress Meg Tilly, and her children, said he has no plans to retire or leave the studio before his contract expires.

He said the new structure “is not a stopgap at all” until Roth is free to succeed him.

“Whether I retire or not, this is the structure that we expect will manage the company going forward,” Calley said. “The Joe Roth question is really a question for Joe Roth, but he’s starting this huge enterprise here and that’s not the reason I made the deal with him.”

Sony is one of three equity investors in Roth’s new company, Revolution Studios, along with pay-TV giant Starz Encore and Fox Entertainment Group. Sony, which will distribute Roth’s movies domestically and in most overseas markets, expects about 10 releases a year from the production company to fill out its annual release slate of 25.