Dan Loeb, the activist investor pushing for change at Sony, has revealed another “$1bn plus” position in a Japanese company, this time telecom and internet group SoftBank. Speaking at the Robin Hood Investors Conference in New York, Mr Loeb said he had followed up his big share purchase – about 1 per cent of the company – with a meeting with SoftBank’s founder Masayoshi Son in Japan in recent weeks.
The value of SoftBank’s stakes in US telecom company Sprint and Chinese ecommerce site Alibaba were particular attractions, Mr Loeb said. He also heaped praise on Mr Son’s leadership. Sony’s entertainment group found itself in the spotlight this year when Mr Loeb wrote a blistering letter saying it was “characterised by a complete lack of accountability and poor financial controls”. Mr Loeb, who has spent more than $1bn amassing a Sony stake, proposed a partial spin-off of Sony’s entertainment group, which was rejected by the company’s board. Sony promised to cut the number of Hollywood movies it releases each year and focus more of its resources on television series productions as it responded to stinging criticism of the company from Mr Loeb. Kazuo Hirai, Sony’s chief executive, told an investor conference that the company’s entertainment division, which includes film, TV and music, “must get better”. He acknowledged the poor performance of Sony Pictures this summer, which released a string of flops, such as After Earth, starring Will Smith, but told investors entertainment was “a core part of Sony” that was “crucial to our future growth”. The investor day at Sony Pictures’ studio in Culver City, California aimed to address some of Mr Loeb’s criticisms. Amy Pascal, co-chairman of Sony Pictures Entertainment, said the studio was pushing for a “more equitable balance between risk and reward” with its investments in movies and would release fewer films – about 18 per year, compared with “low 20s” in recent years. The studio had cut the number of expensive “first look” deals with top stars, she said, adding that Sony would not “work with directors . . . who are unable to respect the budgets of our films”. Sony Pictures has appointed Bain & Co to advise on cost-cutting with the aim of saving $100m or more. Michael Lynton, chief executive of Sony Entertainment, said the company would make a “significant shift from motion pictures to higher margin television production and networks”. The studio has scored with acclaimed hits such as Breaking Bad and its recent series, The Black List, which has been a ratings winner on the NBC network. Steve Mosko, president of Sony Pictures Television, said the company had sold 38 different series to 16 television networks. “That’s up more than 200 per cent over our slate 10 years ago,” he said.