Sony Hack: New Documents Reveal Closely Guarded Studio Profits

Sony Hack: New Documents Reveal Closely Guarded Studio Profits

New documents leaked by the hacking group that recently infiltrated Sony’s computer systems are shedding more light on the inner-workings of the company, including profit margins for some of its biggest films.

The information is just the latest to be released to the media and offers insight into more of the studio’s closely guarded secrets.

The leaked documents were obtained by The Hollywood Reporter and discuss profit margins, spending, and other numbers rarely discussed outside of studio boardrooms. 

According to the information, the Sony Pictures Entertainment films that brought in the largest profits were some of its most anticipated releases.

This Is the End turned $50 million in profits, Grown Ups 2 made $48 million, and Captain Phillips brought in $39 million for the studio. 

American Hustle also made $27 million, with One Direction: This Is Us and Elysium each hauling in $18 million.

The documents were reportedly prepared by the studio in April, in an effort to announce cost-cutting measures implemented by Columbia Pictures President Doug Belgrad. 

A letter within the documents spoke of reforms within the company: 

Currently, approximately $1B in production spending can be expected to deliver $500M-$600M in profits. 

Through his continued focus on financial discipline, Doug hopes to improve that ratio to a point where $800-$900M in production spending delivers $500-$600M in profits. 

The document also highlighted Belgrad’s handling of a Paul Blart: Mall Cop sequel. 

“The production budget was originally set between $45M and $50M,” the letter stated. “Doug successfully negotiated with the producers to get Kevin James to accept less compensation and to reduce the production budget to approximately $38M.” 

The Columbia president brought down the budget of the upcoming Adam Sandler movie Pixels by $25 million, after chairman and CEO Michael Lynton agreed to make it for $135 million. 

“Doug artfully negotiated with the producers to reduce the production budget to $110M and through his own network of contacts secured the required co-financing,” the letter said. 

Details of digital production president Bob Osher’s restructure of Imageworks, Imageworks Interactive, Colorworks, and Post Production were also found in the information. 

As a result of the move, 230 employees were reportedly let go so the company could outsource a portion of their special-effects work. 

“Because of Bob’s extraordinary focus on cost management, Imageworks is expected to generate $7M in EBIT (before restructuring) in FY15 despite a 30% reduction in revenue,” the letter states. 

The latest information dump further victimizes the vulnerable studio, and the scandal has set in motion an industry-wide shakeup in cyber security procedures.


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