Sony Entertainment Hires Bain & Co. to Cut $100 Million in Annual Costs
Sony Pictures Entertainment has hired Bain & Co to help it figure out ways to save $100 million in annual costs, a goal that could lead to layoffs, the studio said Monday.
The news was first reported by The New York Times, which said that CEO Michael Lynton plans to reveal that it has hired Bain at Thursday's planned investor meeting in the Culver City studio lot.
Sony has famously been under pressure from investor Daniel Loeb, CEO of hedge fund Third Point, to rein in spending and boost profits. He has also advocated that the entertainment assets be spun off from the multinational conglomerate.
SPE spokesman Charles Sipkins said Monday: "As part of a nearly four-year process of increasing fiscal discipline, Sony Pictures is conducting a review of its business to identify further inefficiencies. Our objective is, and always has been, to operate an efficient studio that is uniquely positioned to capitalize on future growth opportunities."
Bain & Co. is a Boston-based consulting firm founded in 1973 and is famous in part because former Republican presidential nominee Mitt Romney was once a partner. Bain's website says it has "completed more than 1,300 projects with leading companies spanning all subsectors of the media and entertainment industry."
In the most recent quarter, Sony's film unit recorded a loss that it blamed on underperforming films like White House Down and The Smurfs 2.
Activist investor Loeb, who owns about 7 percent of Sony Corp., has through his acerbic letters succeeded in spotlighting the entertainment portion of the conglomerate as being "poorly managed." He has also blasted management for overseeing a "famously bloated corporate structure" that includes "high salaries for underperforming senior executives."
Through the first three quarters of the year, though, Sony stock was up 92 percent, outpacing Viacom, CBS, Time Warner, Walt Disney and Comcast. On Monday, Sony shares rose 1 percent to $18.72 and were up an additional 1 percent after the closing bell.