Sunday, May 19, 2013
Sony Facing Threat From Large Shareholder
This article provides an overview of film industry economics, but that is not why it has been posted. An investor, who has become Sony's largest shareholder, is putting pressure on Sony's film division to increase profit margins. Sony's film division is reputed to have an excellent and stable management team but its profit margins have not risen like those of its competitors. They are making fewer films and increasing profit margins by milking profits from legacy films that were released in the past. There is pressure on Sony to follow a similar strategy. Shareholder value in the short term is maximized by investing less in the future and milking past investments.
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