Sony rumoured to be selling off entertainment division
- 30 October, 2012 13:22
Hollywood is buzzing with a rumour that Sony is gearing up to sell of its entire entertainment division of Sony USA in response to sluggish performance by the company.
However, The NY Post reports that Sony itself is denying any such move: "Sony's entertainment businesses are not for sale," Jim Kennedy, a Sony spokesman said. "Period."
Despite the public announcement rumours continue to surround a potential sale. Sony USA houses a film studio responsible for movies such as James Bond's new outing, Skyfall, TV shows such as Seinfield and a large back catalogue of programs.
See also: Sony product reviews
Then there's Sony Music, which is the world's second largest music label by market share (behind Universal Music Group) and ahead of Warner Music Group and EMI. The NY Post reports that billionaire owner of Warner Music, Len Blavatnik, has his eye on Sony USA.
"Sony's market cap is $11.9 billion," said one analyst who has heard the sale rumors. "The entertainment assets alone are worth in excess of Sony's market cap, possibly more." reports the NY Post
Moody's Investor Services downgraded Sony's log-term senior unsecured bond ratings to Baa2 in a 12 October note, and moved its outlook to "negative". The Moody's note included the following: "Demand for games consoles and compact digital cameras is likely to continue to decline due to the integration of gaming and camera functions into smartphones."
That many of Sony's key products (mobile phones, cameras, handheld gaming consoles) are struggling against models from Apple and Google Android seems fairly self evident to consumers.
Kazuo Hirai, Sony CEO, recently cut Sony's profit forecast this year by 27 per cent to $1.7 billion, although the NY Post reports that Wall Street things that pared-down number is high.
Sony posted a loss in 2011 that was twice as high as the market expected, and Apple's revenue grew by 71% during the same period.