Sony Corporation has announced that its Sony Pictures Division is set to take an ‘impairment loss’ of approximately $962 million for the fourth quarter of the 2016 calendar year.
The write-down, described as a ‘non-cash loss’ and recorded as an operating loss, is said to be due to a number of factors from the purchase of the studio thirty years ago to ‘dramatic shifts in the home entertainment space’ as revenue in that arena for all studios continues to decline.
In a joint statement accompanying the financial announcement, Sony group chief Kazuo Hirai and outgoing Sony Pictures Entertainment SEO Michael Lynton say that they’re not selling the studio:
“Make no mistake. Sony Corp.’s commitment to SPE remains unchanged. The value of high-quality content continues to rise. As we have stated on many occasions, including at SPE’s All Hands meeting at the end of last year, Sony Corp. sees SPE as a very important part of Sony group, and will continue to invest to achieve long-term growth and increased profits in this space.”
The announcement comes three years after Hirai said improving Sony’s results was an urgent priority – something it has yet to do as it has continued to struggle with box-office disappointments and management problems. Sony says profit in the Sony Pictures segment overall is expected to grow because of measures currently underway to improve the profitability of its film and TV divisions.