The Sony Hack | The Mistakes Series

0:10On the morning of November 24th, 2014, just a few days before Thanksgiving, Michael Lynton drove from his house in West Los Angeles to Culver City, the home of the sprawling complex that houses Sony Pictures Entertainment. He was the CEO. He'd been at Sony nearly 11 years.

0:31Michael Lynton:The films were all going well. We had a bunch of stuff going really well on television, Breaking Bad and Blacklist and things like that. The music company also was having a very good year, so everything seemed to be on a steady pace. He turned on to Bundy from San Vicente Boulevard. I was driving to work, and I get a phone call from our CFO, Dave Hendler, and he said, Mike, all of our systems are down. Nothing is working here at the studio. It appears like a bunch of our laptops have been fried and are unusable. They're actually broken. And we do not for the life of us understand what's happened.

1:09You arrived a few minutes later.

1:11Michael Lynton:The studio is a lot like a college campus. It's like five or seven thousand people. Half of them are employees. But as a result of you all sitting in that one space, word travels very fast. And by the time I drove up, there were crowds already in front of the building. Like, what's going on? What's happening? What's happening? The entire Sony Pictures operation had been hacked. And whoever had done it had clearly gotten deep inside. Nobody knew for sure what was going on. It was just pandemonium, frankly. A few days later came the first blow. The hackers released the company's emails, all of them, onto a website called Pastebin.

1:55The password? D-I-E-S-P-E-1-2-3. Die Sony Pictures Entertainment. The press had a field day.

2:05Michael Lynton:Those emails were salacious because they involved movie stars and people saying things about people that they shouldn't have been saying. And, you know, you're seeing the internal, 10 years of internal correspondence at a big Hollywood studio, which by definition has a lot of juicy stuff in it. Not just things involving stars. Everyone's emails. Emails to your wife or husband, to your kids. Emails about people's medical problems, relationships. And not because, as in the case of the Jeffrey Epstein files, the people involved had been associating with a known predator. These were just people who happened to work for a movie studio.

2:46Michael Lynton:And in addition to that, over time, you know, and we had all this stuff up on our system, You know, the Karate Kid, which was about to be coming out. The new script for James Bond, which nobody had seen up until that point, was being released. So there was, you know, it was a lot of juicy material that was being released into the public.

3:09It was one of the most damaging business hacks in U.S. history. Some estimates put the cost to Sony at over$100 million. And when Linton looked back on what happened, he came to an uncomfortable conclusion. That in some significant sense, it was all his fault.

3:31My name is Malcolm Gladwell. You're listening to Revisionist History, my podcast about things overlooked and misunderstood. This is the first episode in a miniseries about mistakes. inspired by a book that Linton and Josh Steiner have published called From Mistakes to Meaning, in which they investigate the origin and consequences of mistakes, starting with the story of what happened on the Sony lot that November morning. We're going to start there as well, because I remember it all firsthand. Michael Linton is one of my closest friends. In those days, I would stay at his guest house in Los Angeles for weeks at a time, like Cato Kalin.

4:19I remember, if I remember correctly, you guys came to New York for Thanksgiving. We did.

4:27Michael Lynton:To Lily's house. Yeah, we did. In the middle of all of this. We did, yeah. Because we wanted to sort of have the kids feel like everything was normal. And I was at that. I was with, I came to Thanksgiving. Oh, yeah. Oh, yeah, yeah, yeah, yeah. And I just remember, I have a, it's burned into my memory, is you sitting in a chair in the corner of the room by yourself with your head in your hands. Oh, yeah. It was a low moment. Those weeks were terrible. I remember I lost all that weight, so it was a rough time. That was 12 years ago, the worst moment of his career by far. And in the ensuing years, Michael never talked about any of it, none of it, not with me and not with anyone as far as I can tell.

5:08It was a memory that he decided to bury. Until, all of a sudden, he dug it back up. This is his story. As the CEO of an entertainment company, Michael Litton was in an odd position. The CEO of, say, a software company is almost always a software engineer. The leaders of a company like that belong culturally to the same world as the rank and file. That's true of many professions. Principals are former teachers. The person running sales at Ford used to sell Fords. But in a creative industry, the people running the business tend to belong to a different culture than the people who work for them. I would sometimes visit Michael at Sony, and as a car nut, I would get a kick out of walking through the executive parking lot and seeing the long row of shiny BMWs and Porsches and Mercedes and Audis until I came to the CEO spot, and there was Michael's white Volkswagen Golf.

6:09Michael Lynton:I'm the non-creative person. I'm the person who's supposed to mind the store, so to speak. I'm the person who's meant to turn the lights out before we all go home. I'm the person who's making sure that everything is sort of running properly, that we're making the numbers. And I was, with the exception of maybe one other person around there, the only guy in a suit. And you're the only one going to Japan. I'm pretty much the only one going to Japan. Sony Pictures was and remains a subsidiary of the Sony Corporation, which is a massive electronics insurance and media conglomerate based in Tokyo. I remember there was always the same flight.

6:45Michael Lynton:It was an ANA flight that left at one o 'clock in the morning out of LAX. And the reason I took that flight is it got in at five o 'clock in the morning into Haneda, which is the Metropom. And I would take that same flight back at midnight the next day. God, it's just the most exhausting. Because I had little kids and the other thing, and I wanted to get home. The creatives at Sony found new ideas, developed scripts, and forged relationships with actors and directors. But for a movie to be made, it had to be approved by a special green light meeting chaired by Michael. All of the department heads would be there.

7:21Television, home entertainment, marketing, legal, finance, government affairs. They would zero in on the likely audience. Look at estimates of how much a movie would cost. how much movies in that particular genre or category typically made. Figure out how lucrative the overseas market might be. On and on.

7:39Michael Lynton:People get caught up in their passions and get caught up in their emotional interests. And my job oftentimes was to make sure that we were dispassionate about things and objective in the way we looked at it. So this disciplining function that you serve is working. Yeah, there were no water worlds, by way of example. Heaven's Gate. You know, Heaven's Gate. No, we had, you know, we had our group of failures, but they weren't things that would sink the studio or even sink the year, frankly. Yeah, yeah. So it was pretty, yeah, it was pretty steady in its performance at that point. And then came the summer of 2013.

8:13So lead us up to, so a movie comes up for consideration. Right.

8:19Michael Lynton:Called The Interview. Called The Interview. And it's presented by Seth Rogen. and we had had a lot of success with Seth Rogen up until that moment. He had produced a series of R-rated comedies for the studio that had done really, really well. He comes in with his movie The Interview and the interview is about two hapless journalists played by Seth Rogen and James Franco who go off to North Korea ostensibly, you know, to convince Kim Jong-un to be in some television reportage but in truth they were under the auspices of the CIA in the plot of the movie. and they were going to assassinate Kim Jong-un at the end of the movie.

8:57Michael Lynton:And they say, this is the next thing we would like to do, and we'd like a quick response, or the agent said this, because, you know, if you don't want to do it, there's somebody else.

9:11Everyone, Sony and Rogan, decide to do a read-through on the Sony lot for Michael and his counterpart on the creative side of the studio, Amy Pascal. Yeah.

9:20Michael Lynton:We had promised them that after that read-through, we would give them a yay or a nay decision. And that's sort of the setup for how this whole thing came to pass. Yeah. So they all show up. So they all show up. And by the way, when I say we would give them a yay or a nay decision, in the normal course of things, what we would have done is you would have had the read-through and you would have had that meeting. but you would have had the meeting knowing that the thing was funny and it worked with an audience. Yeah. Or not, but in this case it did. Yeah. So describe the read. So just to give a real sense of it, the studio is the old MGM studio.

10:00Michael Lynton:It's 44 acres of art deco buildings and beautiful sound stages that go back to the 20s and the 30s. It's the lot where they made The Wizard of Oz. and across the street from that is there's this very modern, not very nice looking building. And in the bottom of the building, there was a very large room and that's where we had the read-through. When I walk in the room, it's what you would imagine it to be. The actors are all standing there very casually, ready to go. The creative folks are also, they're almost indistinguishable in their dress, to be honest, from the actors. And then there's me in a dark suit, and white shirt, pair of laced up leather shoes.

10:44Michael Lynton:And, you know, I stand out like a sore thumb and the, you know, and then we start the read through. And it's really funny. It's like you can't stop laughing funny. Everybody is laughing. And at the very end, you know, Seth Rogen stands up and James Franco stands up and Amy says, let's make this. And everybody's super enthusiastic about doing it. And I just got completely caught up in the moment. and I said, yeah, let's go do this, which is not something I ever would have done. And I'd been in that job at that point for over a decade and I had never done that up until that moment. That was his mistake.

11:32It is understandable, I think, why Michael didn't want to talk about his mistake for so long. None of us want to talk about our mistakes, not just because we're afraid of looking bad or because the memory of our mistake is too painful to revisit, but because we feel obliged to come up with a reason for our mistake. And that part is really hard. For their book, From Mistakes to Meaning, Michael and his friend Josh Steiner interviewed a dozen or so people about a mistake they'd made, with each story taking up a chapter. And I was one of the people they talked to. I told them about a mistake that I think changed the course of my life.

12:08And yet, when the time came to try and explain why I did what I did, I couldn't do it. I drew a blank. And I found that sudden inability to account for my long-ago error so bewildering that I became overwhelmed and told them I wanted to switch to another, far less consequential mistake. My sense is that this is what Michael was avoiding, until he realized that by leaving something as traumatic as the hack unexamined, he was only making things worse.

12:39Michael Lynton:What happened was five years ago, which was five years after the hack, Josh Steiner and I, Josh is my partner in this, and actually the idea for the book is his. We were walking on the beach one day, and we'd been good friends, and he had been around during the hack. He and I had spoken a lot in that period and had been very helpful to me. He said, you know, Michael, you never, ever want to talk about this thing. And I know it weighs heavy on you. And it's frustrating to me that you won't talk about it. And I don't think it's healthy that you're not talking about it. And I think we probably, I think what might be a good idea is if we both investigated this stuff and we looked into it.

13:22Michael Lynton:So up until that time, that moment, actually, Josh was 100 % correct. I did everything in my power to put it in a drawer and not look at it, think about it. So I really didn't investigate why I had come to that decision in that moment until we sort of went through the process of writing the book or investigating the book. What they saw in the subjects they interviewed was what a good shrink would see in the course of analysis, that people very early in life develop ways of organizing the world, of seeing themselves in relation to others, schemas as they call them. And those schemas persist as a kind of silent filter for your experiences.

14:03Michael Lynton:What it really does is it gives you a shorthand for how to understand a situation in the moment. It's just like, oh, okay, I recognize this. This thing is like this thing, and so I can make this decision, which for the most part serves us well. But sometimes when you're not understanding the context you're in, those schemas can lead you to a bad decision. Michael and Josh got a psychologist from Johns Hopkins, Alison Papadakis. to assist them. And all of them went back over the mistakes stories they'd collected and then over their own stories until they began to see a pattern. How long did it take you to come to what you believe to be the best understanding of why you decided to green that movie in that way?

14:46Michael Lynton:Both Josh and Alison said, because I didn't conclude as to why I had come to that decision, they started unpacking and going back. And I would say within the first couple of months, two or three months, maybe a little longer, We got down to the base level of why I had agreed to do that in that moment and made that mistake, which was. So going back to when I was eight or nine years old, my parents, we were living in America at the time. My parents moved my sister and myself to Holland out of the blue, pretty much really out of the blue, because it was in sort of the August, September period, just as school was starting.

15:23Michael Lynton:And they came into the house one day and said, we're moving to Holland. And there was business reasons to do it. And the rest of our family was already over there. So I found myself in September stuck in a school where I didn't speak the language, didn't know anybody. And over the course of the next year or two, I led a very, very, not a very, but a lonely existence relative to the one that I was experiencing in America, where I had a group of friends, spoke the language. It was an easy time. And I developed this desire always to be part of the gang and particularly part of the cool gang, because that was the gang that I even once I'd made friends, they weren't that they were.

16:03Michael Lynton:They still remain friends of mine, but these were a bunch of kids who, like myself, were pretty nerdy. And that schema, that thing traveled with me for most of my life, in fact, all of my life. And it's always been this sort of a little bit nose pressed against the window and wanting to be part of it. And what we concluded was in that moment where I said, okay, let's go and make the movie, I had been in the job for a long time. I had been the guy who was always saying no. I was the actual suit in the room, as I described earlier. And I just said, you know what? Screw it. In this moment, I want to be part of that group.

16:39Michael Lynton:I don't want to be Mr. No. I don't want to be the suit. I'd like to be part of it. And I said yes. What should he have done? he should have said we'll get back to you so let's replay it and only this time you don't say yes in the room during a table read and you say everyone's really excited everyone's laughing really hard and you say this sounds great we're going to take it to our normal meeting right, okay Okay, so go. You have the normal meeting. What happens in the normal meeting? Well, you would have sat around the table. Everybody would have looked at the numbers and looked at what prior movies had done like it.

17:27Michael Lynton:And they would have, on paper, you would say, financially, this is a goer. Let's do this. But presumably what would have happened would have been that the folks from public policy or our general counsel would have said, you know what? You're now trolling in waters that are not typical to a movie studio because there is this thing going on with North Korea and Japan, and let's take a moment, let's check back with Tokyo whether this is really a good idea. They for sure would have told us not to do it. And that would have stopped the movie. Why would Tokyo have said no? Because of something that Michael didn't find out until much later.

18:04Michael Lynton:In this country at that time, North Korea was sort of a, you know, not, well, yeah, a joke. Like we laughed a little bit when we saw those images. That was not the case with respect to Japan. So for you to understand that relationship, going back to the 70s, they'd had, even before that, but in the 70s in particular, the relationship between North Korea and Japan was extremely contentious. To the point where 100 school children were kidnapped off the streets and carted off to North Korea in that period. And just as we were 100 kids, yeah. And nobody really understood what had happened to those kids.

18:45Michael Lynton:And there was ongoing friction between the two countries on a variety of different levels. But one of the things Prime Minister Abe was trying to do in the moment that we were making these decisions, which I had no knowledge of, was he was negotiating with the North Korean government to get whatever was remaining of those people back to Japan and trying to reestablish or find some normalized relationship back with North Korea. So we were right in that moment. Yeah, yeah. Which is relevant because now we're thinking about making this movie where you're, you know, killing the leader of North Korea and you're owned by a Japanese company.

19:23Michael Lynton:So that equation is not a good one. It wasn't like the interview was going to be one of Sony's blockbuster franchises. It was a small budget movie, a genre movie. This genre didn't have the possibility of a massive upside. This movie was never going to make$200 million. No, no. And the other thing you got to remember about R-rated comedies is you only release them here in America. There is no international in them. So it's constricted both geographically and also by its audience because it's R-rated. So you can't get kids under 17 in there in the first place. So no family. It's mostly guys. It's limited, but you know who the audience is.

20:08Universal Sony's counterpart across town would almost certainly have made it had Sony passed Rogan would have been fine Sony would have been fine so but your would it would it have cost you reputationally within the studio to say no to this do you think it would have reinforced the Michael's the suit he doesn't get it no no

20:30Michael Lynton:no I don't think so would have been legitimate I think you know I pointed that out at the time people would have said, oh, that makes total sense, of course, and they would have moved on.

20:53The interview was scheduled to be released in theaters in the Christmas season of 2014. And a few months before the release date, Sony put out a trailer which made it abundantly clear to the North Koreans how transgressive this movie was going to be. Mr. Rappaport, I'm Agent Lacey with Central Intelligence. You two are going to be in a room alone with Kim, and the CIA would love it if you could take him out. Hmm? Take him out.

21:21Michael Lynton:For coffee? Dinner. For kimchi? No, take him out. You want us to kill the leader of North Korea? And that was really the first moment when the public knew what the movie was going to be about. And shortly thereafter, we received a cryptic message, and we had to do some detective work to figure out where it was coming from. A term that came out came from the North Korean envoy in New York City, and it was on an obscure website. It was brought to our attention that there was a warning from the North Korean government that there would be consequences if we put out the picture. Michael approached North Korea experts at the Rand Corporation and the State Department for advice.