MPAA to Undergo Major Changes Following Studio Disquiet

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Sony almost withdrew from the MPAA after the movie trade group failed to support the studio as it faced an unprecedented cyber-attack last year. As disquiet continues over the way the MPAA operates while burning through huge amounts of cash, big changes now lie ahead for the Hollywood group.

mpaa-logoDuring November 2014, Sony Pictures was subjected to one of the most aggressive cyber-attacks in living memory. The studio’s systems were almost completely compromised, with thousands of emails leaking online alongside several major films.

While the hackers clearly wanted to finish Sony for good, in the end their efforts proved unsuccessful. The studio appears to be on the path to recovery with the hack costing ‘just’ $15m so far. Nevertheless, the fallout continues.

Last week it was revealed that Sony Pictures co-chairman Amy Pascal will be stepping down and now further revelations suggest that the hack will have wider implications outside Sony.

According to a report, Sony Pictures chairman Michael Lynton became infuriated by the complete lack of support offered to his company by the MPAA as it withered under the hack last year. While MPAA chief Chris Dodd eventually admitted that he’d handled the issue poorly, the damage had been done.

Alongside disquiet over the amount of cash the MPAA burns through every year, it’s now been revealed that Lynton began making plans for Sony to take the unprecedented move of leaving the movie industry group.

While this immediate crisis appears to have been averted (Lynton is said to have reversed course around Oscar time), he and other studio executives are now seeking to comprehensively alter the way the MPAA operates.

Several options are currently on the table, including opening up the MPAA to new members and expanding its mandate to include TV and digital content. Also under the spotlight are costs.

At the moment each of the member studios – Sony, Disney, Warner, Paramount, 20th Century Fox and Universal – pumps around $20 million into the MPAA every year (some of it going to Dodd’s salary of $3.3m) but it’s still not enough as the group is currently running at a loss.

The MPAA does have assets though, such as a valuable property (mentioned on several occasions in emails leaked from the Sony hack) located in Washington near the White House. That could be sold or developed to balance the books.

The New York Times managed to reach MPAA chief Chris Dodd on the telephone Thursday. When asked about the prospect for big changes at the MPAA he said: “I’m for that, completely.”

Dodd was on his way to have dinner in Los Angeles with top studio executives – Sony’s Lynton included – and he confirmed that a revamp of the organization was on the menu.

“He’s there. I’m glad he’s there. I think he’s handled this well,” Dodd said of Lynton, noting that some “feel more strongly” about potential changes at the MPAA than others.

Part of the MPAA’s problems relate to its inability to move quickly. All member companies have to agree on a course of action before it can be taken, something highlighted only too clearly when Dodd became hamstrung when considering what to do in support of Sony.

It’s questionable if that situation would improve with the addition of yet more members, but it would bring in much needed cash. The organization lost $4.4m in 2013 according to its latest tax filing.

Whether the coffers can be buoyed with a cash injection from the sale of MPAA real estate seems less certain. Asked about the MPAA’s Washington building and its lobbying-friendly location, Dodd sounded a note of caution.

“It’s an important spot,” he said.

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