Sony Pictures cutting back on production
Adam Sandler has made 15 of his last 18 movies with the backing of Sony Pictures. The studio has maintained a production deal with the comedy star since 2002 and stuck with him through hits like “50 First Dates” and “Grown Ups” and flops like “Spanglish” and “Jack and Jill.”
That’s why many were surprised recently to learn that Sandler is making his upcoming comedic western “Ridiculous 6” with Paramount Pictures.
In gossip-fueled Hollywood, where schadenfreude is more popular than the Super Bowl, the news became fuel for an increasingly common refrain heard from agents, producers and executives at rival studios: “Sony is out of money.”
In reality, the studio is still spending, having recently bought several high-profile scripts and preparing to start production soon on a big-budget sequel to “The Amazing Spider-Man.”
But there is some fire beneath the smoke above Sony’s Culver City lot.
The studio long known as one of Hollywood’s most deep-pocketed is cutting back on the number of movies it makes. The result is that films it might have made in the past, like “Ridiculous 6,” are falling by the wayside.
It’s the latest sign that amid falling DVD sales and rapidly evolving international and digital markets, no studio has a safe harbor.
“We’re making what I would call adjustments, but not radical changes,” said Doug Belgrad, president of Sony’s largest film label, Columbia Pictures.
The “adjustments” come as Sony Pictures’ leadership, including Belgrad, Chairman Michael Lynton and Co-Chairman Amy Pascal, have one overarching goal in mind: to grow the profits they send to troubled parent company Sony Corp. In the company’s last fiscal year, which ended March 31, Sony Pictures generated $416 million of operating income, down 12% from the prior year.
That’s a difficult task in the current economic environment and virtually impossible without a more disciplined – some might say ruthless – approach to moviemaking.
While Sony’s slate for 2013 is already set, the studio is planning to make two fewer movies per year starting in 2014. That means it will typically put out between 18 and 20, rather than 20 to 22.
Sony has long made the second-highest number of movies per year among Hollywood studios, behind Warner Bros. It will now be closer to smaller competitors such as 20th Century Fox and Universal Pictures.
Fewer releases will likely mean less spent on producing and marketing. The studio will also cut its development spending, Belgrad said, by close to 10% and seek to buy more completed scripts, rather than spending millions to rewrite projects it buys at early stages.
Though it still plans to bet big on movies with global blockbuster potential like the second “Amazing Spider-Man” and next year’s “White House Down” from “2012” director Roland Emmerich, Sony is not willing to invest as much as it did in the past on movies aimed at more sophisticated audiences.
“We want to keep playing in the field of commercial movies for adults by being a little more creative about how we finance them,” Belgrad explained.
Sony executives recently told Oscar winner George Clooney and his producing partner Grant Heslov that they couldn’t fully finance their World War II thriller “Monuments Men” at a planned budget of between $70 million and $80 million. 20th Century Fox has agreed to pay for half the movie and split the potential profits or losses.
At the American Film Market in Santa Monica this week, Sony is looking to sell rights in some foreign markets to an upcoming movie about zombies and vampires fighting alien invaders titled “Kitchen Sink.” Such a step is rare among major studios, which maintain worldwide distribution operations so that they can capture revenue everywhere a film can be seen.
In order to maintain profitability, Sony is also looking to put off marketing costs for movies released late in its fiscal year for which profits couldn’t be recognized until months later. That’s one reason it delayed the science-fiction film “Elysium,” from “District 9” director Neil Blomkamp, from March to August.
The changes come as Sony is on track to beat its yearly box-office record with about $4 billion in worldwide receipts. But given the amount it has spent on some of its pictures, ultimate results have been mixed.
The “Spider-Man” reboot and animated comedy “Hotel Transylvania” were hits, but “Total Recall” and Sandler’s “That’s My Boy” were big flops. Despite its $624 million worldwide gross, the costly “Men in Black 3” was a financial disappointment.
Studios including Paramount Pictures and Walt Disney Studios have already cut back on their slates while others like Metro-Goldwyn-Mayer are shadows of their former selves. For the agents, producers, actors and filmmakers who make a living off of studios’ spending, Sony’s pullback is yet another blow.
“We have had a tremendous run of success,” Belgrad said, “and I don’t think we felt our ability to make the number of pictures we’ve been making was constrained until we had a tougher time recently.”
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