Sony announced a $1 billion write-down on its movie business on Monday.
Sony Corp., which is based in Tokyo, said it took the write-down after Sony Pictures Entertainment – one of its business operations – was found to be lagging in profitability, according to the Los Angeles Times.
Sony hasn’t posed much of a threat to its competitors since its 2014 cyberattack, which led to a temporary shutdown of all of the company’s computer systems, both in the U.S. and overseas, according to The New York Times.
At the time, Lynton told his staff that “There is no playbook for us to turn to” in responding to the hack.
According to the Hollywood Reporter, companies usually take write-downs in response to a major drop in the value of an asset.
“Today Sony Corp. announced that a goodwill impairment charge for the pictures segment of 112.1 billion yen (approximately 962 million U.S. dollars) was recorded as an operating loss in the third quarter ending December 31, 2016,” CEO Kazuo Hirai and Lynton said in a note, according to the Hollywood Reporter.
“The majority of the goodwill that was impaired was originally recorded at the time of the acquisition of Columbia Pictures Entertainment Inc. in 1989,” the note said. “The impact on the consolidated results forecast for the fiscal year ending March 31, 2017 (April 1, 2016 to March 31, 2017) of this impairment and other factors is currently being evaluated and will be disclosed at the earnings announcement for the third quarter ended December 31, 2016 scheduled to be held on February 2, 2017.”
Despite failed efforts in Sony’s picture segment, Hirai and Lynton said in an email to employees that the company is still committed to Sony Pictures Entertainment.
“We, the management of Sony Corp. and Sony Entertainment, take the fact of recording a substantial impairment charge very seriously. But make no mistake, Sony Corp’s commitment to SPE remains unchanged,” the email read, according to the Hollywood Reporter. “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.”