Goodbye, Mickey

One blockbuster hit would have made all the extravagance at least seem worthwhile. Under Mickey Schulhof's pampering hand, Sony Corp. of America execs had two corporate jets, fresh flowers laid on each day (by an inhouse florist, of course) and a glitzy headquarters sushi bar with an artificial stream running through it. What they didn't have was a "Jurassic Park." And in the end Sony's U.S. president and his profligate studio chief, Peter Guber, never recovered from the string of megabombs that swamped their few box-office successes like "Sleepless in Seattle" in red ink. So when Schulhof announced his resignation last week just a step ahead of Tokyo's ax, the only real surprise was that it took his Japanese bosses so long.

Why now? Why not a year ago, when Sony announced a $8.2 billion write-off of its Hollywood assets, a devastating admission that its 1989 "invasion" of Tinseltown had turned into full retreat? Even then, Schulhof couldn't seem to break his spending habits. After forking out half a billion dollars in 1990 to hire Guber and Jon Peters, two flamboyant producers who had never run a studio, he spent hundreds of millions more on golden parachutes to send them packing. Schulhofs efforts to "synergize" fell almost as flat as Sony's movies. The disappointing "Last Action Hero," for instance, didn't much help sales of the Sony cellular phone and Mini-Disc players featured in it.

The likeliest explanation for Schulhofs overlong stay at Sony is that this is, after all, a Japanese company. Wall Street's cult of quarterly profit-gazing has not yet made it to Tokyo, where loyalty still counts for something. Schulhof, a physicist by training, had soldiered hard for Sony for 21 years and scored numerous successes, like the 1987 purchase of CBS records, before his descent into Hollywood hell. He was also a protege of Sony's legendary founder, Akio Morita, and his successor Norio Ohga. But Morita suffered a stroke and resigned last November, and eight months ago Ohga became chairman, a largely ceremonial position in Japan. He named Nobuyuki Idei, no special friend of Schulhof's, to succeed him as presi-dent. "Until then Mickey had two angels named Morita and Ohga," says an industry analyst. "Afterward you could have gotten rid of him anytime."

Idei apparently decided Schulhof played no part in his new vision of Sony: a leaner company somewhat less entranced by entertainment software and more in tune with its hardware roots. In particular Idei has forged into PCs, chips and online technologies. Sony recently announced a surprisingly strong second-quarter operating income of $607 million, largely thanks to its revived electronics businesses. This shift in emphasis seems to have hurt Schulhof, who told reporters that his relations with Tokyo had degenerated from warm nightly phone calls from Morita and Ohga to dry memos issued by Idei. "What this really represents is Mr. Idei coming to power," John Malone, chairman of Tele-Communications Inc. and a key player in media mergers, told NEWSWEEK.

Idei, a cosmopolitan former PR man, may also feel more comfortable than his predecessor overseeing Sony's U.S. operations without Schulhof. On Friday, he announced he would make "regular trips to the U.S." to take charge of Sony America's reconfigured executive committee, which will now include Alan Levine, head of Sony Pictures Entertainment, and Carl Yankowski and Tommy Mottola, presidents of the electronics and music divisions respectively. Idei also anointed executive VP Jeff Sagansky, whom Schulhof had wishfully hired as "synergy czar," as overall strategist under him.

There may be another, more calculated reason behind Schulhof's departure now: a bid to further spruce up Sony America's books for a U.S. stock offering. With initial public offerings and market prices at record highs, that's an enticing prospect. Schulhof, who had pushed that strategy, apparently became part of the housecleaning himself. Tokyo may have abided Schulhof's free-spending reputation, but Wall Street wouldn't. At a briefing last month, Idei hinted at an IPO when he described Sony's strategy as "localized globalization." Taking Sony America public might help discipline it, he implied, but added that this was still premature.

Some analysts also played down the idea. They suggested that with Idei seeking to set up shop on the Infobahn, he'll want to control as much content (read: Sony's entertainment businesses) as possible. Still, ff Sony has learned anything in the past six years, it is that you don't need to fully own content to have a piece of the action. That's what Sony's rival Matsushita decided last June when it sold its MCA studio to Seagram's, but kept a 20 percent chunk. Says TCI's Malone, who himself has sniffed around Sony properties, "I've never seen that owning a movie studio long term has made anybody any money -- except the guys who make the movies." .Tell Mickey Schulhof about it.