Peter Guber, the mercurial movie producer tapped five years ago by consumer electronics giant Sony Corp. to build its movie business, quit Thursday as the company's top executive in Hollywood, dissolving one of the priciest and most tumultuous regimes in recent motion picture history.
Guber, 52, who with producing partner Jon Peters was lured by Sony's Japanese owners with an outlay of more than $700 million to lead the company, will leave his post as chairman and chief executive of Sony Pictures Entertainment immediately to form a Sony-backed entertainment company.
Guber's departure--a topic of speculation all year because of the poor performance of Sony's movie business--comes at a critical time for Sony Pictures, which owns the Columbia and TriStar studios. The company has lagged behind other major studios in movie production and, critics say, lacks a clear strategy for taking advantage of today's rapid shifts in the entertainment business.
Under Guber, Sony's releases ranged from the highly profitable "Sleepless in Seattle" and "In the Line of Fire" to such flops as "Last Action Hero" and "I'll Do Anything."
Despite Sony's well-publicized problems this year, Guber and Michael P. Schulhof, chief executive of Sony Corp. of America, insisted in interviews that it was Guber's idea to leave.
"Are my interests, my passions and concerns with this kind of job? Clearly, right now, they are no longer. That's what motivated the change," Guber said.
Still, Guber's move was viewed by Hollywood executives as a graceful way to give Guber and an increasingly impatient Sony what they both want--a fresh start. One top executive who knows Guber said he was weary of the pressure and criticism, while others said he has been unhappy for some time.
"The Sony job was so removed from what excites him--putting together and creating movies," said James Wiatt, president of the International Creative Management talent agency. "He was never thrilled with the job, and the negative attention that came with it."
Some senior studio executives who worked under Guber speculated that he may have taken matters into his own hands out of a belief that a showdown was brewing.
"I think Peter sensed that he might be let go and didn't want to go down in disgrace. He wanted to do it before it was done to him," said one high-level executive.
Guber will leave with a lucrative payout, including an unspecified share of a $50-million bonus he is said to be splitting with a handful of Sony executives.
Guber is the second major film executive to move on in the past few weeks. Jeffrey Katzenberg disclosed last month that he will leave as chairman of Walt Disney Studios effective this week.
Guber's departure is yet another chapter in Sony's five-year ordeal in trying to build a movie business, which it calls "software," to complement the company's electronics "hardware." Sony bought Columbia Pictures for $3.4 billion in 1989, and by some estimates has overall sunk $6 billion to $7 billion into Hollywood, an investment that so far remains far from paid off. Sony's experience serves as a vivid reminder of the minefield that foreign investors face trying to turn a profit in Hollywood.
Despite such movie successes as "City Slickers" and "A League of Their Own" during his time at Sony, Guber's tenure the past 15 months has brought the studio an unprecedented level of scrutiny and criticism. Sony suffered through such public embarrassments as the "Last Action Hero" debacle, the Arnold Schwarzenegger film that is said to have lost about $25 million for Sony, and the media frenzy surrounding the scandal involving alleged Hollywood madam Heidi Fleiss. Sony was linked to the affair when one of its Columbia executives publicly denied being involved with her.
Lately, Sony's movie business has been plagued by a string of box office disappointments such as "North" and "City Slickers II." The combined box office market share for Columbia and TriStar--now at less than 10%--is less than that of major competitors Walt Disney, Warner Bros., Paramount, Universal and 20th Century Fox. One top financial analyst estimated Sony Pictures' negative cash flow at $250 million in the first half of the year.
In addition, Sony has suffered through turmoil in its executive ranks, complaints from producers about a logjam in getting projects approved and the inability of Sony officials to attract a strategic partner to invest in the studio.
Columbia's release schedule also slowed to a trickle early this year, with only two movies released in the first five months compared to seven during the same period in 1993. The number of films released is expected to pick up in the next few months, however.