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Schulhof resigns Sony U.S. post CEO led Japanese giant's purchase of movie studios that brought huge losses

Michael P. Schulhof, the head of Sony Corp.'s American operations, resigned under pressure yesterday, apparently unable to inspire confidence in Sony's Japanese management that he was doing enough to revive the company's businesses in the United States.

Mr. Schulhof's resignation as president and chief executive of the Sony Corporation of America unit came almost exactly 12 months after Sony, which is based in Tokyo, took a $2.7 billion write-off to account for losses in its Hollywood film business.

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Since then, the film division has had a mixed record and Sony's other major American entertainment holding, its music business, has lost market share.

Meanwhile, some other new ventures under Mr. Schulhof, including an electronic-publishing business, have suffered relatively large losses.

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In the 1980s Sony was among the first foreign companies to make big acquisitions of American entertainment operations -- CBS Records for $2 billion in 1987 and Columbia Pictures for $3.4 billion in 1989.

But yesterday, Sony took the unusual step of replacing the head of its American business with Japanese executives who will run the company from Tokyo.

Sony's chairman and chief executive, Norio Ohga, who played key roles in acquiring and initially overseeing the American entertainment properties, will add to his titles those of chairman for the Sony Music and Sony Pictures Entertainment units.

Nobuyuki Idei, Sony's president, will add the titles of vice chairman of Sony of America and chairman of its Sony Electronics unit.

Sony gave no explanation yesterday for Mr. Schulhof's resignation. But several people close to the company said the lackluster performance of the American operations in the last year, coupled with Mr. Schulhof's propensity for heavy corporate spending and his own extravagant standard of living, grated on executives in Tokyo, where the economic downturn has forced austerity on Japanese companies.

Mr. Ohga and Mr. Schulhof have been colleagues for years, but Mr. Idei, who became Sony's president only last April, is said to be highly critical of Mr. Schulhof's spending habits and informal management style.

Sony executives declined to comment on Mr. Schulhof's resignation, issuing a brief release thanking him for his contributions to the company and explaining only that he was leaving to "pursue new business interests."

Mr. Schulhof, who had worked at Sony for 21 years and was the company's highest-ranking American executive, also declined to comment.

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Some industry executives speculated yesterday that Sony had forced Mr. Schulhof out in a show of fiscal and management discipline intended to attract an entertainment-industry partner to invest in the American business.

There also was conjecture that an American executive would soon be found to run the U.S. business. But several executives close to Sony denied that finding a partner or hiring a new manager were imminent moves.

Mr. Schulhof was a vice chairman of Sony's American operations when the company acquired the music business in 1987.

He ascended in the corporate hierarchy as the Japanese company pursued a strategy of expanding in the American entertainment business. He became president and chief executive in 1993.


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