For Sony Pictures, It’s Complicated at the Top

Hollywood insider Amy Pascal got the big office at Sony Pictures Entertainment, but an outsider got the big job -- or most of it.

The Culver City studio’s convoluted management structure became more so Wednesday, when Sony Pictures confirmed the surprise appointment of Michael Lynton to the posts of chairman and chief executive.

Lynton, the New York-based chief of Time Warner Inc.’s AOL International and Time Warner International, succeeds John Calley, a movie industry legend who retired this fall. Lynton brings to the Sony Corp. unit a strong background in international business and digital media, both viewed as crucial to the future of the Tokyo-based parent.

Unlike Calley, however, Lynton will share power, in an unusual partnership with Sony’s Columbia Pictures chief Amy Pascal, who was named Wednesday to a newly created job as chairwoman of Sony’s Motion Picture Group. Lynton will be responsible for all business aspects of the studio -- while Pascal will continue to select the movies.

Both will report directly to Sony Corp. of America Chairman Howard Stringer. And Pascal, rather than the new chief executive, will inherit Calley’s grand office in the studio’s Irving Thalberg Building -- once home to such legendary moguls as MGM’s Louis B. Mayer.

Lynton, 43, will work one floor above the master suite in an office he hasn’t seen yet. “I’ve never even been to the studio lot,” he said.

In a joint phone interview with Pascal and Stringer, Lynton acknowledged that Pascal would remain the creative point person.

“She’s picking the pictures,” he said of the power-sharing arrangement that he predicted would include “extensive conversations” about creative and marketing issues.

“Amy knows the business cold. I don’t. I have no illusions about that,” Lynton said. Several Hollywood insiders said they were stunned by Lynton’s appointment, despite his diverse background in corporate finance, publishing, marketing and managing international and digital businesses.

“He’s not in the mainstream of what the Hollywood community thinks,” said William Morris Agency chief Jim Wiatt. “But he’s a smart business executive, and I think it fits with Sony’s need for digital conversion.”

Lynton is best-known in the movie world for his brief and less-than-successful tenure as president of Walt Disney Co.’s Hollywood Pictures unit until it was shuttered in 1996. After leaving Disney, Lynton ran Pearson’s Penguin Group, where he oversaw the acquisition of Putnam Inc. and extended the Penguin brand to music and the Internet.

The Lynton appointment mirrors Stringer’s surprise decision in January to name Andrew Lack, a longtime television news executive, as head of Sony’s global music group.

In an interview Wednesday, Stringer said he was again looking for fresh ideas. “I worked hard to find someone to complement Amy, someone who could cross-fertilize and not be jarring,” Stringer said. “If these two can’t work together, I’ll eat my hat.”

Pascal, who already has two executive titles -- Sony vice chairwoman and chairwoman of Columbia -- now has yet another title with expanded responsibilities for all of the films produced and distributed by the studio.

She had widely been viewed as a contender for the chairman’s spot, having helped turn the studio’s fortunes around at the box office.

On Wednesday, however, she said she was satisfied with the new arrangement.

Management partnerships have become increasingly common in corporate Hollywood. Viacom Inc.’s Paramount Pictures chief Sherry Lansing and Viacom executive Jonathan Dolgen work in close partnership, as do Warner Bros. movie chief Alan Horn and studio Chairman Barry Meyer.

But Lansing clearly reports to Dolgen, and Horn to Meyer. At Sony, by contrast, Pascal will report around the new chief executive to Stringer.

The picture is further complicated by the continuing authority of two vice chairmen -- Jeff Blake, head of worldwide marketing and distribution, and Yair Landau, president of Sony Pictures Digital -- who until Wednesday had been on an equal footing with Pascal.

Blake and Landau will continue in their roles but will now report to Lynton rather than to Stringer, company executives said.

All of the vice chairpersons sit on an executive operating committee headed by Stringer, along with Sony executive Rob Wiesenthal; Calley, now a producer at the studio; and Joe Roth, who runs the company’s allied Revolution Studios. Lynton will join that committee.

Roth, long viewed as another contender for Calley’s slot, said he thought Lynton was “a terrific business executive with a lot of international experience who would relieve some of the burden from the corporate staff.” In his former job as head of Disney Studios in the mid-1990s, Roth fired Lynton in the process of closing down Hollywood Pictures.

Lynton said Wednesday that he became “painfully aware of what opportunities and pitfalls to the content business are” during his four-year tenure at AOL. Even before the Sony post was offered, he had planned to leave Time Warner at year-end rather than relocate to London, he said.

The executive, who assumes his new job in January, will move to Los Angeles from New York.

Lynton was responsible for helping turn around AOL Europe and for extending AOL’s global presence in Asia and Latin America. As president of AOL International, he oversaw the world’s largest online Internet service.

Harvard-educated, Lynton joined Disney in 1987 after working with Credit Suisse First Boston on mergers and acquisitions in the U.S. and abroad. His first Disney job was as manager of business development for consumer products. Two years later, he moved to the company’s nascent book and magazine publishing unit and helped launch such imprints as Hyperion.

When Disney put him in charge of its struggling Hollywood banner in 1994, he became the first executive in the modern film business to run a studio without movie experience. The experiment ended badly, and Lynton returned to publishing with Penguin.

At least some in Hollywood now see Lynton’s experience outside the film community as a major plus, particularly as entertainment businesses struggle with the challenge of piracy and the transition to digital delivery.

“He’s got a very good macro view,” said International Creative Management chief Jeff Berg, who has known Lynton for 20 years. The executive’s international experience, Berg added, “is one of his greatest strengths.”

*

(BEGIN TEXT OF INFOBOX)

Michael Lynton

New position: Chairman and chief executive of Sony Pictures Entertainment

Born: Jan. 1, 1960

Education: 1982, bachelor’s degree in history and literature, Harvard College; 1987, MBA, Harvard Business School

Personal: Raised in the Netherlands. Speaks English, Dutch, French and German

Career highlights:

1982-1985: Works in mergers and acquisitions at Credit Suisse First Boston’s offices in New York, London and Melbourne, Australia

1987: Joins Disney as manager of business development for its consumer products unit

1988: Promoted to director of marketing for the division

1989-1994: Moves to Disney’s magazine and book publishing unit and eventually becomes its president

1994-1996: President of Disney’s Hollywood Pictures division

1996-2000: Chairman and CEO of Pearson’s Penguin Group

2000-2003: President of AOL International and CEO of AOL Europe. In 2002, added titles of executive vice president of AOL Time Warner and president of Time Warner International

Sources: Sony, Who’s Who, AOL Time Warner

*

(BEGIN TEXT OF INFOBOX)

Who’s on first?

Sony Pictures’ unusual management structure is getting even more complicated. A look at who’s reporting to whom:

Howard Stringer, Chairman and chief executive, Sony Corp. of America

Michael Lynton, Chairman and chief executive, Sony Pictures Entertainment, reports to Howard Stringer

Amy Pascal, Vice chairwoman, Sony Pictures Entertainment, head of Columbia Pictures, chairwoman of Sony Pictures Entertainment Motion Picture Group, reports to Howard Stringer

Jeff Blake, Vice chairman, Sony Pictures Entertainment, reports to Michael Lynton

Yair Landau, Vice chairman, Sony Pictures Entertainment, reports to Michael Lynton