http://www.deadline.com/2013/08/george-clooney-slams-sony-investor-dani…
Thoughts from the peanut gallery?
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http://www.deadline.com/2013/08/george-clooney-slams-sony-investor-dani…
flexes e-muscles
Anyhow, like most celebrity advocates, Clooney is an absolutely terrific actor who is unbelievably liberal and ignorant.
I agree with you in most cases, but some of the stuff he said is very interesting. Specifically on how Loeb is essentially thinking that he can do a better job of running the company than the Sony board can and the effect that his actions have on people in that industry.
Sony has been in the shitter for years now. It has underperformed in many areas. Clooney is pissed b/c it will drive the entertainment side to be more price sensitive (i.e. not overpay and make less mistakes).
As CRE mentioned, the guy is a great actor and knows the Hollywood business better than Loeb. But, Loeb understands shareholder value and business valuation more than Clooney can fathom. And SNE has shit on its shareholders. Loeb knows what he is doing.
He's richer than Clooney for a reason.
Clooney was actually making a fairly decent point until he got here:
"How any hedge fund guy can call for responsibility is beyond me, because if you look at those guys, there is no conscience at work. It is a business that is only about creating wealth, where when they fail, they get bailed out and where nobody gets fired."
Where the idiocy just speaks for itself.
Well I would say that some of the points are somewhat true. At the end of the day HFs are about returns and creating wealth - I'm not sure anyone could rationally justify a different reason for them. But hell, I'm all for creating wealth.
And while L/S hedge funds don't get bailed out, LTCM did once, so technically...
But I agree with PE investor that while Clooney understands the business better - he focused on Loeb's comments about the two movies when that isn't the real point. Of course Sony makes blockbusters, but the return for shareholders is poor. If you don't want to focus on shareholders, don't go public (unless your Jeff Bezos, then the market lets you do whatever you want). Loeb is trying to get the company to focus on shareholders, which is different from making a claim that he understands how to run the business way better than someone like Clooney. Loeb isn't saying that he could run the business better, he's saying that a standalone management could run the business better than it is being run now. And you can't argue with saying a more focused management makes for a better run business, and would tend to outweigh any "synergies" that come with being part of the Sony conglomerate.
Who the hell is George Clooney
This quote:
“It’s crazy he has weight in this conversation at all,” Clooney continued. “If guys like this are given any weight because they’ve bought stock and suddenly feel they can tell us how to do our business"
Well, by definition owning stock means you have the right to voice your opinion and when you are most likely the largest individual shareholder in the company (didn't check numbers, so may be speaking out of turn) than you most certainly have the right and ability to throw your weight around.
I think Clooney gets a lot right and a lot wrong. All the valuation/shareholder arguments he doesn't understand, but he does point to the success of a lot of the films that SNE put out that seems to have been overlooked. Maybe he is implying that a split of entertainment assets won't allow for that same effect. He mentions how some of his films would have never gotten produced if SNE solely focused on tentpole movies, which would be bad for consumers despite not generating high shareholder returns. At the end of the day, Loeb put down over a bil, so he can decide to make whatever argument he wants. Management doesn't necessarily have to agree with him (and so far doesn't seem like they do), so the only way Loeb gets what he wants is if other shareholders take his side.
Everything up to that was just fair criticism from a perspective opposite of Loebs. But of course he had to rally the OWS crowd behind him. Or maybe he genuinely doesn't know the difference between hedge funds and banks like most people.
Clooney makes many valid points. The movie industry depends upon the revenue from tentpole films to fund risky, creative films that may or may not generate a positive return. Clooney is saying that you can’t run a movie studio with expected profit as your sole evaluation metric. If you did, then critically acclaimed, profitable films like Michael Clayton, Out of Sight, Good Night and Good Luck don’t get made. Those films help move the movie genre forward whereas tentpoles, which rely heavily upon special effects to draw audiences, do not. The fear is that over reliance upon tentpoles will mark the creative destruction and gradual economic erosion of the film industry. Naturally, Loeb would prefer that SNE only make profitable movies, which would hinder creativity.
His comments on HFs have a lot of validity. I also think it’s naïve to think that Clooney doesn’t know any financial heavy hitters. The HF industry directly benefited from the bank bailouts. Does anyone really think that their counterparties becoming insolvent would have left HFs unscathed? Please…
Uh... so what is your problem then? Loeb isn't shutting down Sony Pictures. He is proposing a spin off of the entertainment business. Those who wish to maintain ownership in that part of the business can do so.
Bank bailouts helped hedge funds, ensuring they got paid. But, let's not act like Hollywood and its cronies don't get special treatment themselves.
I don’t have a problem. I’m just saying that Clooney is right to be worried about the film industry’s health when it becomes too focused on profitability. While poorly worded, his analysis of HFs is also pretty good.
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