So Many Dreams So Many Losses

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After years of minimizing his studio's financial problems, Schulhof decided that with Guber's exit it was time to come clean. He urged Sony to take a substantial write-off of its Hollywood assets. (The music and television operations remain big moneymakers.) Around the same time, Schulhof recruited Jeff Sagansky, the former president of CBS's entertainment division, to be his second in command. But observers wonder what role Sagansky has been playing as a long-term strategist. "He's a mystery to everyone," says a Hollywood agent. Though he may have helped save Sony Pictures, Schulhof may be too late to save his own job. "He has a grim future," comments one rival Hollywood studio chief. "He has publicly taken responsibility for Sony's condition, and he is the only human being mentioned in Sony's press release." Sony's Hollywood debacle also raises anew the question of who might succeed Sony chairman Ohga. At 64, Ohga came through coronary bypass surgery, but he has yet to designate an heir.

At Matsushita the Tokyo end of management seems in order; the trouble is between Tokyo and Hollywood. MCA's Lew Wasserman and Sidney Sheinberg -- the longest-running partnership in Hollywood -- have been heading the studio, but have openly complained that their pushes to go after CBS and to open a theme park in Tokyo were ignored. The Japanese firm is especially eager to keep the team intact since director Steven Spielberg, who made close to $1 billion for MCA with Jurassic Park, recently announced that he would stop working for the company if his mentor, Sheinberg, were to leave.

Across the continent, meanwhile, Mitsubishi is struggling to survive the New York City real estate bust, which saw commercial-vacancy rates rise from 8% to nearly 14% over the past five years. To reduce its interest expense, the Japanese company hopes to renegotiate the $1.3 billion mortgage it acquired in 1989. (That was the heady period when another Japanese firm, the Minoru Isutani Group, acquired California's famous Pebble Beach golf course for $840 million, which it sold at a 40% loss two years ago.) Mitsubishi threatened to default on its loan last week, which some analysts say was a calculated move. "They're figuring out that the way to get the banks to listen to them is to threaten bankruptcy," says a New York real estate analyst.

For the Japanese, there is probably a lesson in all these debacles about not + getting stuck on labels. But for Americans, there is also a cautionary tale in drawing pompous conclusions about the nation's economic security when a few Japanese companies invest in premier American properties. When the Japanese did just that in the late 1980s, investment banker Felix Rohatyn wrote, "What is at stake is not only the loss of our position as the leader of the Western democracies, but the loss of our independence of action both in economic and in foreign policy." Turns out it was just about making deals -- and perhaps not very good ones -- in the end.