Sony Entertainment and more specifically Sony Pictures has always been a bright spot in Sony’s portfolio. Despite the electronic giant having financial issues the past decade with a recent trend towards recovery, Sony Pictures has always been a bright spot for the company. Despite releasing less movies than other studios like Disney and WB, Sony Pictures has had some key franchises which include the Spider-Man franchise which to date has grossed $3.2 billion from just four films. With no Spider-Man or Men In Black movie this summer, SP dealt with a few movies in a row which include White House Down and After Earth which returned less than anticipated to the bottom line. Under pressure from some key investors, Sony Entertainment is now looking to cut $100 million in costs to help strengthen the bottom line.

It should come as no surprise that one of the key people behind this cost reduction is Daniel Loeb, the same man who earlier in the year tried to force Sony to sell off its Sony Pictures division. After the very public stunt from Loeb, Hollywood powerhouse George Clooney came to the defense of Sony Pictures, pointing out the greed that comes with large investors like Loeb. With new pressure from him and other investors, the $100 million cost reduction will likely come in the form of overhead cuts and likely layoffs. Sony Pictures on the matter:

 As part of a nearly four-year process of increasing financial discipline, Sony Pictures is conducting a review of its business to identify further efficiencies. Our object is, and always has been, to operate an efficient studio that is uniquely positioned to capitalize on further growth opportunities 

Despite some recent challenges, Sony Pictures has put out some solid films in just the past few months with include Elysium, This Is The End, Grown Ups 2, and Captain Phillips. Just last year, Sony release Skyfall, the first James Bond film to gross over $1 billion. With Daniel Loeb and Third Point (his investment company) owning a 7% share in Sony Pictures, its likely on a matter of time before cuts come to Sony Entertainment despite what’s an over all great track record.

Discuss:

Should investors like Daniel Loeb be trusted or are they too short sighted?

[Via Variety]