Word: schulhofer
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Dates: during 1994-1994
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After years of minimizing his studio's financial problems, Schulhof decided that with Guber's exit it was time to come clean. He urged Sony to take a substantial write-off of its Hollywood assets. (The music and television operations remain big moneymakers.) Around the same time, Schulhof recruited Jeff Sagansky, the former president of CBS's entertainment division, to be his second in command. But observers wonder what role Sagansky has been playing as a long-term strategist. "He's a mystery to everyone," says a Hollywood agent. Though he may have helped save Sony Pictures, Schulhof...
Sony paid a daunting premium when it bought Columbia Pictures: 22 times the company's annual cash flow. But its bigger problem may have been a man, not a number: Michael Schulhof, president of Sony's U.S. subsidiary. A smart, capable 20-year company veteran with a Ph.D. in physics, Schulhof charmed his Japanese bosses with the nonconfrontational style to which they were accustomed. He was the only American to serve on the company's board. As a protege of both Ohga and Sony founder Akio Morita, he was given complete autonomy over the Hollywood operation even though he knew...
...manage the studios, Schulhof quickly hired Jon Peters and Peter Guber, independent producers who had also never run a major studio. In retrospect, the amounts the Sony team spent verge on the hilarious. The company paid $200 million to buy the Guber-Peters company and gave the two men annual salaries of $2.7 million, as well as $50 million in deferred compensation. Sony then shelled out assets worth $500 million to settle a lawsuit that had been filed by Warner Bros., which had Guber and Peters under contract. "This was an obscenely expensive arrangement," says Porter Bibb, an analyst...
With losses like that, it helps to have friends in the right places -- and Guber did. He and Schulhof became great pals, sharing family vacations in Spain. So entwined were the couples that for a time, Schulhof's son dated Guber's daughter. Guber was finally pushed out in late September, but he exited smiling. He reportedly pocketed $40 million in cash and received a commitment from Sony to invest an additional $200 million in his new production company...