Sony curtails development spending halfway through fiscal year
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Sony Pictures has told the Hollywood creative community that it is all but halting spending on developing new movie projects until April 1, the start of its next fiscal year.
That means that for the next six months, the studio will largely hold off from buying new scripts or source material (such as books) to turn into movies and from cutting checks to writers to start work on projects recently set up at the studio.
As with all rules in Hollywood, of course, there are exceptions. Sony will still shell out for existing priority projects and new ones it deems irresistible, as it did this summer when it paid $60 million for the rights to the Michael Jackson documentary ‘This is It,’ which unexpectedly became available after the singer’s death. The studio also recently engaged Gary Ross to rewrite and potentially direct ‘Spider-Man’ spin-off ‘Venom.’
‘We have a healthy development roster and we know our slate for 2010 and well into 2011,’ Sony spokesperson Steve Elzer said. ‘In the future, given our needs, we will be buying less but will also step up to the plate when we believe there is great material to be acquired.’
Sony is the second studio in the last month to curtail spending on development. In September, Universal Pictures decided to stop spending on new projects through the end of 2009. The fiscal year for Universal’s parent company General Electric begins Jan. 1.
Though it’s common for studios to run through their annual development budgets earlier than planned, it’s somewhat surprising that Sony has done so halfway through its year.
The move comes as every studio is looking for ways to cut costs amid the ongoing decline in DVD sales, the reduced access to outside capital for production and the pressures of the economic downturn.
Sony has already set its releases for 2010 and identified a number of films it is putting into production for 2011. Like other studios, Sony has a pool of hundreds of projects already in development, from which it can pick and choose. With the industry’s ongoing belt tightening, though, studios are looking to shrink the size of their project pools. Most are also looking to produce fewer films than they have in the last several years.
Unlike Universal, whose move to stop development spending came amid a dismal year at the box office, Sony has had a strong run recently with such hits as ‘Julie & Julia,’ ‘District 9’ and ‘Cloudy With a Chance of Meatballs.’
Sony is apparently looking to maximize profits from those films by not spending money on projects it might not need.
The studio is also hoping to rake in a fortune with ‘This is It,’ which starts a two-week run on Oct. 28 and has already sold out hundreds of screenings via online ticketing services.
-- Ben Fritz and Claudia Eller