Sony's chief executive officer Nobuyuki Idei has denied any intention to sell either his music operations or his movie studios, insisting last night that they are "a cornerstone in our overall strategy."
"We want to be very clear in stating that our entertainment businesses, Sony Music Entertainment and Sony Pictures Entertainment, are not for sale. Sony intends to be a broadband entertainment company in the 21st Century and, in that regard, it is more important than ever that Sony maintain control of its content," said Idei from New York.
Idei's firm rebuttal followed speculation that Sony would fold some or all of its software factories in with Germany's Bertelsmann as a response to the recent mega-merger uniting AOL with both Time Warner and now EMI. The possibility of such a link-up caught the imagination of analysts after Bertelsmann chief executive Thomas Middelhoff declared his intention to become the world leader in music by the end of this year. Now it seems that any partnership with Sony Music, if it happens at all, would revolve around an internet distribution venture.
But even as Sony sought to dampen sell-off rumours, talk of other giant alliances continue to heat up. Among the most persistent involves Barry Diller's USA Networks assuming control of Seagram's Universal Studios to create a Hollywood powerhouse that might also bring in DreamWorks SKG.
Yesterday's editions of both the Los Angeles Times and the New York Post ran prominent articles suggesting that Diller has been huddling again with Edgar Bronfman Jr, the Seagram chief who previously sold him Universal's TV businesses, a controlling interest in October Films and PolyGram's film and TV assets.
Many believe that Bronfman has long wanted to off-load his film interests and focus solely on the music business. Adding fuel to such speculation is that fact that Seagram's 45% stake in Diller's mixed bag of new and old media assets is worth more now ($8bn) than the sum Bronfman paid for all of Universal Studios in 1995, a testament to both Diller's shrewd managerial skills and his cult-like following on Wall Street.
Diller is expected to address the issue of a potential merger with reporters later today when he announces the latest financial results for his fast-growing cable and home shopping empire. According to the Los Angeles Times, he has been trying to persuade two of his largest shareholders, software billionaire Paul Allen and Liberty Media chief John Malone to help him buy Seagram's movie and theme park assets. If he succeeds, Diller would also inherit Universal's international theatrical distribution deal with DreamWorks, the Universal-based studio that might also be feeling the urge to consolidate.
The Los Angeles Times said that Bronfman may also be considering other options, including the outright sale of his entertainment and liquor businesses to another entity such as AT&T or even News Corp. Seagram has flatly denied all such scenarios.