Sony to take £780mn goodwill charge on film business
Mon 30 Jan 2017
Sony has warned that it will mark a 112.1bn yen (approx. £782mn) write-down on the value of its film business, blaming poor returns at the box office and a faster-than-expected decline in DVD and home entertainment sales.
Despite the goodwill charge, the Japanese firm confirmed that it had no plans to sell its movie and television studio and said that the Pictures unit remains an important business segment for the company.
Sony said that the rise of online streaming and the subsequent decline in the DVD and Blu-ray market had had a hefty impact on sales. It also added that the majority of the impairment charge was linked to the $3.4bn acquisition of Columbia Pictures Entertainment in 1989 – off which the division took significant losses on the value in 1994.
The studio has had a tough few years following the 2014 hacking scandal, with limited releases and notable box office flops, including its 2016 revisit of Ghostbusters and Da Vinci Code sequel Inferno. The disappointing movies performance has been saved somewhat by strong figures in its PlayStation arm, as well as high demand for image sensors used in smartphone cameras.
The markdown comes just weeks after Sony announced that Michael Lynton, Sony Entertainment’s chief executive, will be leaving the business to assume the chairman position at Snapchat owner Snap.
A replacement for Lynton is yet to be announced, but the CEO is expected to stay on for a further six months as co-chief executive alongside Sony CEO Kazuo Hirai.
Sony said that it was still calculating the exact impact of the write-down on its Q3 earnings, which are expected to be released later this week. It also added that it was estimating a profit of 37bn yen for the fourth quarter from the sale of shares in online medical platform M3 to Goldman Sachs.
Tags:Asia business Japan news Sony US
Sorry. No data so far.