Lynton, 57, who has held the top spot at the Culver City movie and television studio for 13 years, will step down as Chief Executive of Sony Entertainment on Feb. 2 in order to focus his energies on social messaging service Snapchat, where he is chairman of the board, the company said Friday. The owner of the Los Angeles-based social media company is preparing for an initial public stock offering.
Sony has not named a replacement.
Lynton’s exit is the latest corporate upheaval at Sony, which has spent the last two years recovering from a weak film slate and the massive 2014 cyberattack that exposed countless executive emails that contributed to the departure of leaders, including then-studio chief Amy Pascal.
Sony film group business affairs executive Andrew Gumpert left the studio in November to become chief operating officer at rival Paramount Pictures. Last year, Sony underwent a big shakeup with the sudden departure of its longtime TV boss, Steve Mosko, and Columbia Pictures head Doug Belgrad.
Lynton's departure was driven by the growing dissatisfaction of parent company Sony Corp. with the studio’s weak box-office returns, a person close to the studio said. "They are increasingly impatient with the poor performance of the studio," said the person, who was not authorized to comment publicly on the matter. "I think they just had it.”
Sony executives also had repeatedly heard complaints from Sony executives about the sharp-elbowed management style of Tom Rothman, whom Lynton tapped in February 2015 to run the studio after the departure of Amy Pascal.
Sony’s recent release, “Billy Lynn’s Long Halftime Walk,” used advanced technology and cost $40 million to make, but grossed less than $2 million in the U.S. and Canada. Last year, Sony ranked fifth out of the six major studios in terms of domestic box-office market share.
"Sony as a company has been troubled during the last couple of years," said Jeffrey Cole, director of the Center for the Digital Future at USC Annenberg School for Communication and Journalism. “With the exception of their television unit, they just can't seem to get their footing."
Lynton and Rothman were unavailable for comment.
Once he leaves his post, Lynton will stay on as co-CEO for six months to work with Tokyo-based Sony Corp. CEO Kazuo Hirai to find a successor.
Hirai, in a memo to employees obtained by The Times, praised Lynton’s leadership of the company, but acknowledged the struggles that have hobbled the movie business.
“We recognize current challenges in the motion pictures business and its turnaround will take some time,” Hirai said. “As we look to the future, we feel strongly that our entertainment businesses are essential parts of Sony.”
Lynton has also had oversight of the Japanese company’s record label Sony Music Entertainment for the last several years. Sony Music has also gone through big recent management changes. Longtime Sony Music CEO Doug Morris will transition to a chairman role this year, making way for new chief Rob Stringer.
Lynton’s focus on Snapchat maker Snap Inc. could be increasing because the company is in a pivotal year. It has signaled an intention to hold an initial public offering of stock in the coming weeks. Showing investors the company can produce significant profit is no easy feat though. Snap now relies on advertising in a disappearing video-sharing app for revenue, with about $1 billion expected this year.
Lynton could be playing a role in shaping Snap’s ambitions and crafting its message to investors. For instance, the company is working with major TV production studios on shows exclusively streaming on Snapchat.
Lynton has been on Snap’s board for nearly four years and has long been an intermediary between the start-up and the worlds of finance and entertainment. Snap CEO Evan Spiegel, 26, and Lynton became confidants after Lynton's wife, Jamie, was amazed by the addiction to Snapchat displayed by kids at a family wedding. She invited Spiegel to dinner one day in 2012 and subsequently invested in Snapchat.
“I have been involved with Evan and Snapchat since its early days, and given its growth since then, decided the time was right to transition and focus on my role as chairman of the board of Snap Inc.,” Lynton said in a statement. “I leave Sony with great pride in all we have accomplished together.”
|Michael Lynton is stepping down as chief executive of Sony Entertainment to focus on his new role as chairman of Los Angeles-based Snapchat parent company Snap Inc. (Toshifumi Kitamura / AFP/Getty Images)|
Sony Entertainment CEO Michael Lynton steps down as chief executive to become chairman of Snapchat
Two years after guiding Sony Entertainment through an unprecedented email hack, CEO Michael Lynton will step down as chief executive of the company.
The 57-year-old will join as chairman of Snap Inc, the parent of popular messaging app Snapchat effective February 2, Sony Corp announced Friday.
Snap - in which Lynton is an early investor - is expected to go public early this year, vying for a $25 billion valuation.
Lynton, who has been with Sony for 13 years, will stay on as co-CEO of Sony Entertainment for the next six months.
He will also work with Sony Corporation's President and CEO Kazuo Hirai to find a replacement.
Hirai is expected to take on the additional title of Chairman and Co-CEO of Sony Entertainment during the transition.
'It has been an extraordinary 13 years and an honor to work at Sony with some of the most talented and creative people in the entertainment space,' Lynton said.
In 2015, Lynton defended his response to the hack attack that leaked millions of documents and wiped out the company's network in 2014.
In a wide-ranging interview with the AP, he explained how damaging the attack was and revealed that the Sony Pictures network is still not back online - more than six weeks after suspected North Korean hackers broke in.
'They came in the house, stole everything, then burned down the house,' he said on Thursday.
'They destroyed servers, computers, wiped them clean of all the data and took all the data.'
Lynton also said the picture house never really canceled the release of the 'The Interview' - the comedy film about the assassination of North Korea leader Kim Jong-un - amid hacker threats of terrorist attacks on movie theaters that screened it.
Instead, he claims, the company was planning all along to find alternative ways to make sure audiences could see the controversial film.
It was a call to Google co-founder Sergey Brin that helped the company decide to release The Interview online - a first for a big-budget film from a major studio.
The network was crippled. Days before Thanksgiving, Sony Pictures employees had logged onto computers that flashed a grim message from a hacker group calling itself Guardians of Peace.
Soon personal information for tens of thousands of current and former workers was dumped online, including Social Security numbers and the purported salaries of top executives.
Five Sony-produced movies appeared on file-sharing websites. Thousands of private, and sometimes embarrassing, emails hit the Internet.
During the hack, former Sony boss Amy Pascal was targeted when a string of the 58-year-old's private and damaging emails were leaked, including one in which she made an embarrassing jibe about President Obama.
Michael Lynton Resigns as CEO of Sony Pictures Entertainment
He will transition to become the chairman of Snapchat parent Snap Inc., Sony announced in a news release on Friday.
“It has been an extraordinary 13 years and an honor to work at Sony with some of the most talented and creative people in the entertainment space,” said Lynton in a prepared statement. “I have been involved with Evan [Spiegel] and Snapchat since its early days, and given its growth since then, decided the time was right to transition and focus on my role as Chairman of the Board of Snap Inc. I leave Sony with great pride in all we have accomplished together, and confidence that the broad changes we have made and new management team we have assembled over the last few years will strengthen the company overall.”
“I want to thank Michael for his strong leadership and dedication to Sony throughout his long and illustrious career with the company,” said Sony Corporation’s President and CEO Kazuo Hirai. “The entertainment industry continues to undergo some of the most transformative changes it has ever seen, and Michael’s vast experience and expertise in the entertainment and media space has been invaluable in charting a path forward through this new landscape.”
Hirai will take a second office at the studio’s Culver City, California headquarters to oversee the conglomerate’s entertainment assets.
Lynton was the CEO of the studio through the turbulent months of a hack by North Korean leader Kim Jong Un in November 2014. Since then the studio has struggled to right itself and is regarded as among the weaker of Hollywood’s major studios. Several of the company’s longtime senior executives have shifted out in various shakeups, including longtime TV chief Steve Mosko.
Sony’s most recent film, the Chris Pratt-Jennifer Lawrence space romance “Passengers” has failed to take off at the box office, making $182 million worldwide on an estimated $11o million budget. The studio places fifth out of the six major Hollywood studios by market share in 2016, with 8 percent of the box office gross.
Lynton has been a Snap board member since the company’s inception and an avid user of Snapchat, which is most popular among younger millennials. Snap is planning an IPO this year that could value the company at $25 billion.
Here’s the full release sent by Sony:
Sony Corporation announced today that Michael Lynton will step down as Corporate Executive Officer of Sony Corporation and CEO of Sony Entertainment in charge of its Pictures and Music businesses effective as of February 2, 2017, to be Chairman of the Board of Snap Inc.
For the next six months, Mr. Lynton will stay on as Co-CEO of Sony Entertainment, overseeing the Pictures and Music businesses, and as CEO of Sony Pictures Entertainment and Sony Corporation of America, to work with Sony Corporation’s President and CEO Kazuo Hirai to find a replacement, in particular for the leadership of Sony Pictures Entertainment. During the transition, Mr. Lynton will work closely with Mr. Hirai, who will take on the additional title of Chairman and Co-CEO of Sony Entertainment. Mr. Hirai will also have a second office at SPE’s offices in Culver City, California, to oversee the management of the entertainment companies, namely Sony Pictures Entertainment, Sony Music Entertainment and Sony/ATV Music Publishing, as well as Sony Corporation of America.
“It has been an extraordinary 13 years and an honor to work at Sony with some of the most talented and creative people in the entertainment space,” said Lynton. “I have been involved with Evan and Snapchat since its early days, and given its growth since then, decided the time was right to transition and focus on my role as Chairman of the Board of Snap Inc. I leave Sony with great pride in all we have accomplished together, and confidence that the broad changes we have made and new management team we have assembled over the last few years will strengthen the company overall. I want to thank Sony Corp. – Kaz Hirai and Howard Stringer in particular – for their leadership and support over the years, and our excellent teams at Pictures and Music for their unwavering dedication to producing and distributing outstanding entertainment.”
“I want to thank Michael for his strong leadership and dedication to Sony throughout his long and illustrious career with the company,” said Hirai. “The entertainment industry continues to undergo some of the most transformative changes it has ever seen, and Michael’s vast experience and expertise in the entertainment and media space has been invaluable in charting a path forward through this new landscape. Particularly the broad structural and management changes Michael has recently implemented will help our music business sustain its strong momentum, and the pictures business to set the path for restoring profitability and future growth, though we recognize current challenges in motion pictures business and its turnaround will take some time. As we look ahead, we see our entertainment businesses as essential parts of Sony, and I look forward to working with Michael towards a smooth transition.”
Mr. Lynton will step down after 13 years with Sony. He began in 2004 as Chairman and CEO of Sony Pictures Entertainment, and in 2012 was named CEO of Sony Entertainment, expanding his oversight to include Sony Pictures and also the music companies, Sony Music Entertainment and Sony/ATV Music Publishing. In April 2016, he was appointed as Corporate Executive Officer of Sony Corporation in charge of the Pictures and Music businesses. He has led each of the entertainment companies through a period of significant change in the film, television and music industries by focusing on digital transformation, reorientation to global audiences, content diversity and the creation of new distribution platforms.