'Sort out your stepchild': Activist takes aim at Sony Entertainment
Wednesday 31 July 2013
The activist investor calling for Sony to spin off its film and music business tore into Sony Entertainment's management yesterday, saying the division was treated like a "red-headed stepchild".
Daniel Loeb, chief executive of the Third Point hedge fund, said in a letter to investors: "Entertainment's culture is characterised by a lack of accountability and poor financial controls. It's perplexing that [chief executive Kazuo] Hirai doesn't worry about a division that released 2013's versions of Waterworld and Ishtar," referring to the big-budget summer box office flops After Earth and White House Down.
Mr Loeb added: "Sony's reluctance to discuss it candidly stems from embarrassment."
Third Point, which owns 7 per cent of Sony, wants its entertainment business to be listed publicly to improve profitability and management, as well as provide capital to accelerate the restructuring of Sony's electronics division.
While Mr Loeb praised "green shoots" in the electronics arm, he said "drastic" action is required to address long-term changes in the Japanese electronics industry.
Sony declined to comment. It is due to report its first-quarter earnings tomorrow.
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