Climbing the Mountain at Sony
By Ronald Grover
The new chairman and CEO of Sony (SNE ), 63-year-old Howard Stringer, has seen his share of tough assignments. As president of CBS's (VIA ) TV network from 1988 to 1995, the affable Welshman brought the network from third place to first in a single year. He's best remembered for luring David Letterman from NBC (GE ) in 1993 to make the Tiffany Network a late-night powerhouse. And he began his tenure at Sony in 1997 by overhauling a movie studio that was devastated by overspending, mismanagement, and flops.
When he was tapped for the top position on Mar. 7, Stringer was vice-chairman of the parent company and had been running a U.S. operation that provided nearly 30% of revenues and today boasts one of Hollywood's hottest studios. For the nine-month period ended Dec. 31, its operating income had more than tripled, to $181 million, on the strength of the movie Spider-Man 2 and DVDs of its one-time TV hit Seinfeld. And within weeks, Sony will close on its $5 billion deal to buy the fabled MGM studio with three private-equity firms and cable giant Comcast (CMCSA ).
COMPROMISE VS. CONFRONTATION.
As a media mogul, Sir Howard cuts a decidedly different figure. Tall, slightly pudgy, and more likely to wear clothes from Brooks Brothers than Hugo Boss, he prefers compromise over confrontation, according to those who work with him. To run the Sony studio, for instance, he replaced retiring mogul John Calley with an unusual team approach that includes a chairman and three vice-chairmen.
Still, Stringer can be tough when he has to. When results at Sony's U.S. music operation continued to languish under former head Tommy Mottola, Stringer forced him out in 2003 and installed his longtime friend and former CBS associate Andy Lack.
Within months, Stringer and Lack had masterminded the merger of Sony's music operations with those of Bertelsmann's BMG music unit in a cost-cutting move that was unique in an industry reeling from Internet piracy and falling sales. In its most recent quarter, Sony reported that its 50% stake in the music joint venture provided it with $11 million in operating income.
UP FROM HISTORY.
Stringer has had his share of disappointments as well. In the mid-1990s, he presided for nearly two years over money-losing TELE-TV, a joint venture among three of the largest U.S. phone companies to deliver TV services to their subscribers. At Sony, he pursued the MGM deal for more than three years, failing on two separate occasions to convince the parent company to approach either a merger or outright purchase. Finally, it relented, on the condition that Stringer could line up partners to defray the cost and keep Sony from taking on debt.
Until he was named Sony's top executive, the deal marked a high point for Stringer, a history major from Oxford who was knighted by Queen Elizabeth II in 1999. Even as he was running Sony's sprawling U.S. operations, including its electronics, entertainment, and gaming operations, the father of two traveled to England almost weekly where his wife Dr. Jennifer A.K. Patterson, practices dermatology.
Can Stringer, who has pulled off some impressive feats in his career, swing some more miracles for Sony? It's a tall order (see BW Online, 3/7/05, "For Sony, Is "Redefinition" Enough?"). Price-slashing competitors have savaged its mainstay electronics business, which saw earnings fall by 47% in the most recent nine-month period. Still the one-time newsman turned corporate mogul has faced some rough assignments in the past and come out a winner.
Grover is BusinessWeek's Los Angeles bureau chief
Edited by Patricia O'Connell