Sony is set to give its Hollywood studio chief a bigger role

Sony Corp. is tapping its Hollywood studio chief, Michael Lynton, as its top entertainment executive in the U.S., the latest development in a well-orchestrated succession plan atop the Japanese electronics and media giant.

Lynton will soon be named chief executive of Sony Corp. of America, a role that adds oversight of the company’s music sales and publishing businesses to his purview, according to people briefed on the matter but not authorized to speak publicly. He will continue to run movie and television studio Sony Pictures Entertainment in Culver City, although Sony’s American unit is headquartered in New York.

Lynton’s promotion signals that the 52-year-old executive will be a top U.S. lieutenant to Kazuo Hirai, who is poised to succeed Howard Stringer as chief executive of Sony Corp. on April 1. Hirai is expected to focus much of his efforts on the company’s troubled electronics and video game businesses, which have slipped from their previously dominant market positions because of an array of innovative and inexpensive new competitors, including Apple.

For Lynton, the elevation resolves questions about how he would fit into Sony’s operations once Hirai takes over for Stringer, who was named head of Sony Corp. of America in 1997 after a long career in television. Lynton has maintained a close relationship with Stringer since he hired him in 2004 and more recently gotten to know Hirai, who previously ran the company’s video game unit.

Lynton’s ascension signifies Hirai’s faith in the executive. Also, grouping music together with film and television under a single executive could make it easier for Sony Corp. to someday sell or spin off its entertainment operations — which has been long rumored in Hollywood.

Sony’s U.S. video game and electronics operations, which previously were part of Sony Corp. of America, will now report directly to its parent’s Tokyo headquarters.

Lynton joined Sony after a career primarily in publishing, with shorter stints running AOL’s European operations and Walt Disney Studios’ Hollywood Pictures unit. Under his leadership together with Co-Chairman Amy Pascal, Sony Pictures has been one of the most stable studios in the industry, with little executive turnover and a number of blockbusters, including the “Spider-Man” and “Men in Black” movie series for which there are upcoming sequels.

Despite the music business’ many challenges, Sony has invested heavily in that arena over the last several years. The company spent $1.2 billion in 2008 to buy out Bertelsmann AG’s 50% stake in recorded music operation Sony BMG, now known as Sony Music Entertainment. Last year, Sony pulled together a consortium of investors to buy EMI Group’s music publishing business for $2.2 billion.

Sony Music Entertainment is run by 45-year industry veteran Doug Morris, who took the top job in July after leaving Universal Music Group. Thanks to British Grammy-winning singer Adele’s hit record “21" and strong sales of albums by other artists, including Taylor Swift and Susan Boyle, over the last two years, Sony has jockeyed with Universal for the title of world’s largest music label.

Both Morris and Martin Bandier, head of music publishing division Sony/ATV, are expected to run their businesses with a wide degree of autonomy given Lynton’s lack of experience in music.

The film, television and music operations that will now be run by Lynton accounted for close to 16% of Sony Corp.'s $23.4 billion in revenue during the three-month period that ended Dec. 31. Unlike electronics, video games and manufacturing, however, the pictures and music units both reported profits during that period. Both have had to cut costs significantly over the last few years, however, because of declining CD and DVD sales.

Nicole Seligman, who is currently executive vice president and general counsel of Sony Corp. of America, will be named president of the unit and run its business operations under Lynton, the people close to the matter confirmed.

Rob Wiesenthal, Sony Corp. of America’s chief financial officer, is not expected to stay and work under Lynton. Instead, he is in talks to transition to a new role at Sony/ATV. He played a key role in that unit’s acquisition of the EMI publishing business, which has yet to be approved by U.S. and European regulatory authorities.

The corporate changes were first reported by the New York Post and Financial Times.