Sony Pictures boss Tony Vinciquerra said that while he talks regularly with CBS chief Leslie Moonves, the two have not talked specifically about a merger, despite rumors to the contrary.
Even so, he said, “The thing that keeps me up at night is, we have to have scale. We’re a really tiny company” compared with tech giants. “If they want to step on us, they can.” He added, “If we don’t grow, we will be somebody’s purchase.” Moreover, ” I didn’t take the job to do it for a year and sell the company.”
Merger scenarios were the prevailing theme of Vinciquerra’s keynote conversation with Soledad O’Brien on Day 2 of NATPE.
Vinciquerra, a longtime Fox exec, took the reins at Sony in June, more than two years after the company was engulfed in the North Korean hacking incident instigated by the movie The Interview. Even today, he said, “It’s still reverberating around the lot.” His main takeaway was that “you need to think more deeply about how what you do has an impact around the world.”
O’Brien asked about the #MeToo movement. “Many of the complaints we receive are anonymous, and that makes it hard for us to do anything,” he said. “At Sony, that process is in place, but people have to come forward and talk about it. … There won’t be retaliation.”
Vinciquerra said that while the shift to streaming and erosion in linear ratings have prompted a reset of Sony’s business models, he does not consider the traditional TV bundle an endangered species. “The majority of the marketplace is using cable or satellite,” he said. “I don’t see that going away anytime soon. If you can get the NFL exclusively, without buying all the other stuff, you’ll see a change.”
Although NATPE is a TV business conference, O’Brien asked Vinciquerra about Sony’s film operation. “The movie business has become very binary — either it works or it doesn’t,” he said. “Social media has become a huge piece.” The current success of Jumanji: Welcome to the Jungle, he said, has been propelled by the potency of its stars on social platforms.
International box office is the greenest pasture for movies, Vinciquerra said. Jumanji is playing on 20,000 screens in China, a sign of the ongoing growth overseas. “The rest of the world is still pretty available,” he said. “The big challenge is the home entertainment market.” O’Brien wondered if MoviePass could threaten the studios long-term, but Vinciquerra said: “I am questioning how that can be economically feasible. … If people use MoviePass aggressively, [the business will] be in a lot of trouble.”
Given Sony’s recent efforts to acquire the 21st Century Fox assets that eventually went to Disney, it wasn’t surprising that M&A was the topic that recurred the most during the 40-minute session. At roughly $60B in market capitalization, Sony Corp. (the entertainment unit’s parent) is dwarfed by Alphabet, Facebook and others with hundreds of billions behind them.
As to the Fox portfolio, Vinciquerra said, “I built a lot of those businesses so it would have been good to have them back.” The most important pieces in the mix, he added, are “the TV and movie studios. For scale. Scale is the most important thing today.”
During audience Q&A, Vinciquerra said the long-deferred AT&T-Time Warner merger remains a “linchpin deal” for the media business. With depositions starting this week ahead of a March trial of the government’s antitrust lawsuit, he said a favorable ruling for the companies would “open the floodgates” for further dealmaking. A government win, by contrast, would require “more creative thinking” by potential partners.
Another question from the audience addressed “New Fox,” given the proclamation of execs at the Fox Broadcast Network this month at TCA that the studio-network divorce would be good news for outside suppliers like Sony and Warner Bros. As to any conversations about a broader teaming, “There have been some preliminary contacts,” Vinciquerra said, though he said they were not quite negotiations. “I know the people there well. New Fox would be a terrific new customer for us.”