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UPDATE: Lionsgate has just issued a reaction (see below). It’s now officially a fight between white (LG’s) and gold (Icahn’s) proxy cards.
Carl Icahn today assembled his slate of 5 board members hoping to unseat Lionsgate’s current 5 board of directors – including the film/TV studio’s Vice Chairman Michael Burns — at the scheduled December 14th shareholders meeting in Los Angeles. (All those dinners where Burns attempted a rapprochement with Icahn obviously came to nothing.) It’s now confirmed that, as I previously reported, Icahn’s slate includes Chris McGurk, 53, the former MGM President and COO and Vice Chairman and Overture Films CEO, as well as filmmaker Jay Firestone, 54, a one-time vice chairman of Alliance Communications in Canada and founder of Fireworks Entertainment who is now head of Toronto-based Prodigy Pictures. Today Icahn revealed that also on Icahn’s list are: Dr. Michael Dornemann, 65, the former CEO of Bertelsmann Entertainment and an entertainment and marketing executive with more than 30 years of management consulting, corporate development, strategic advisory and media experience who is now on the board of Columbia Music; Daniel Ninivaggi, 46, who is President of Icahn Enterprises; and Dr. Harold Shapiro, 75, Princeton university’s 18th president until 2001 and currently a professor of economics and public affairs there. Icahn wants them to replace Michael Burns, Harald Ludwig, G. Scott Paterson, Mark H. Rachesky, and Hardwick Simmons on the current Lionsgate board. Today’s Icahn proxy statement says:
“Given that Carl Icahn and the other Participants believe that the Company has not yet been able to, among other things, reverse declining shareholder value over the past five years and develop strategies that will enhance returns for all Shareholders, Carl Icahn and the other Participants believe that a change in Board composition at Lions Gate is necessary to enhance the financial performance of the Company. The Nominees are committed to the best interests of Lions Gate and all Lions Gate Shareholders and intend to work to improve Lions Gate’s financial performance and shareholder value. The Icahn Group believe that the Nominees, based upon their experiences as disclosed herein, can help to effect positive change at the Company. Each Nominee, if elected, would serve until the date of Lions Gate’s 2011 annual general meeting of Shareholders or until his or her successor is duly elected or appointed, unless his or her office is earlier vacated in accordance with Lions Gate’s Articles or applicable law.”
Usually, a proxy fight like the one Icahn has pledged to wage against Lionsgate is a very expensive proposition that takes months of preparation and involves contacting every shareholder. But this is being done with virtually no time and little expense. Icahn, who owns 33% of Lionsgate, has extended his $7.50-per-share tender offer for more of the studio’s shares to December 2nd.
Here’s the Lionsgate reaction:
SANTA MONICA, Calif. and VANCOUVER, Nov. 26, 2010 — Lionsgate (NYSE: LGF) today confirmed that it has received notice that Carl Icahn and certain of his affiliated entities (the “Icahn Group”) intend to nominate five individuals for election to Lionsgate’s Board of Directors at the Company’s 2010 Annual General Meeting of Shareholders, which will be held on Tuesday, December 14, 2010 at 10:00 am PT in Los Angeles, California.
The Company said: Led by the current Board and management team, Lionsgate has achieved record revenues, major box office success, one of the strongest and most valuable filmed entertainment libraries in the industry, a vibrant television business, a dynamic and growing portfolio of channel platforms and an attractive worldwide distribution infrastructure. Lionsgate’s momentum is evident throughout all of the Company’s business and now is not the time to make a change.
Mr. Icahn has not articulated a vision for Lionsgate regarding how he would improve on these results and his nominees provide no further clarity on the critical issue of leading Lionsgate into the future.
The Lionsgate Board and management team are focused on leading Lionsgate and look forward to continuing to execute on its growth strategy for the benefit of all Lionsgate shareholders. We encourage our shareholders to vote for the Company’s highly qualified nominees.
The Lionsgate Board urges shareholders to vote the WHITE proxy card to elect the Company’s highly qualified nominees and to discard any Icahn Group proxy materials.
Editor-in-Chief Nikki Finke - tip her here.
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Come on… The movie business used to be an art form, creatively driven until MBAs and risk mitigators took over… Lions Gate is plagued by having to serve guys desperate for another failed shakedown by guys like Icahn. Diluting the LGE team with proxy wars and a silly board like Icahn proposes only further complicates a tough environment for any content. Any restructure expert knows if this had been played right, without the Icahn distractions to LGE leadership MGM could gave been had for next to nothing and the winner would have ridden up increased valuations as the creative waves if dislocation sorted themselves out. Feldheimer has done a solid job considering the environment and the dreadful state of cinematic revenues.
I can’t help but wonder whether Mr. Icahn’s Lionsgate obsession will turn out like Sumner Redstone’s disaster with Midway Games.
If this happens and I was a LGE employee, I would start looking for another job, 2 of the people in Icahns board destroy companies, not build them. This is sad.
Feltheimer hit with THE EXPENDABLES while the majors bet on A-TEAM and THE LOSERS, but Icahn would ignore the next STAR WARS on Jon’s watch because he’s like a kamakaze, actually causing more damage and decline in value while claiming its in the best interest of this company. The legal fees to fend him off have strapped the company more than management. He should have backed off as others have advised and MGM would have given Lionsgate more ammo, Bond and beyond. I wish Icahn would leave showbiz alone. He hasn’t got a clue and thinks he does. Overture Films performance was better than Lionsgate?
Icahn doesn’t understand that, in Canada, the movie industry is about culture, not money. It’s like trying to turn a profit on a ballet company.
Icahn is relentless.
As far as the movie business having been “an artform creatively driven until MBAs and risk mitigators took over…” I’m not so sure about that. It’s been historically more of an exclusive club than anything else and people like Icahn are viewed as outsiders who know nothing about the “art” but the changing of the guard has been a long time coming.
Harold Shapiro? I know Icahn went to Princeton, but Harold Shapiro knows as much as about the film business as he does about basketball. Nothing. Really bizarre choice. If you’re going with old Tigers why not Frank Biondi? What’s Shapiro there to do? Put everyone on double secret probation after the cops bust up their kegger?
Maybe the final straw for Icahn was when Lionsgate picked up that R-rated Muppet movie. Ooh, great decision, that. Time to take out the trash!
Watch out Evil Icahn. Karma’s a bitch.
Kristi…now exactly who are you to make a statement like that?
Chris McGurk? Really? I knew Icahn was wacky, I didn’t know he was wing-nut-crazy.
It’s funny how the Lionsgate PR machine has virused in here. People attack McGurk because he made a lot of money off this business by doing his own thing at MGM and not feeling owned by the agencies. Same with Jay Firestone. People who really know him know he doesn’t care about what they think here versus Canada. Icahn is a scary freakin’ dude but he’s like Malone and the others who don’t play the game. I am almost done from the business so it is fun to watch certain people squirm at the changing of the guard.
So if Jay Firestone (known to those have been in business with him as “Liarstone”), the man who ran his own company into the ground, is the caliber of person Icahn thinks should be on his board, then be afraid. Be very afraid.
Lion gates execs should have relized the Moment Carl came after them like a shark smelling some prey to eat he would be nasty trying to get what he is after. including winding up having the company go to the brink of spending all their cash to ward him off so he can have it for a song. this is just another key of Carls to have Lion gate in his clutches as he keeps eyeing Mgm
This announcement proves once and for all that Mr. Icahn has no grasp on what needs to be done at either Lionsgate or MGM. Chris McGurk is one of the biggest frauds in the business. He wear nice suits and talks a good game but when it comes to running a company, making movies and television programs McGurk has clearly proven inept. Has Icahn checked his track record during his stay at MGM? Can you name me three movies he put into production at MGM that made real money? In addition he has virtually no background in television as demonstrated by the demise of that division at MGM once he assumed control of that and other units outside of the movie division where he put 99% of his energy. Then he heads off to spend John Malone’s money with failure after failure at Overture which when it was put up for sale receive so many offers that the only person looking to buy it was McGurk himself who just so happened not to have the money to make a deal. The only business McGurk has a handle on is Home Video circa 1995. Ask the people at Disney and Universal about his creative credentials? Anybody who worked with him at that time will tell you when he got into their creative space they closed the door on him. Things get weirder and weirder at MGM. If the appointment of McGurk is just a step towards him being named CEO of Blockbuster then I guess he is as good as anyone at putting that old horse down and getting a big check. If there is more to his role than that it once and for all proves that Felt, Burns and company really do deserve to come out on the right side of this situation.
And by the way the McGurk announcement makes a ton of sense when you compare what he brings to the table vs. Jay Firestone. Really Carl, Really!
This thing is getting overwrought. You seem to be flacking pretty hard for Lionsgate. I have been involved in the investment side of this business for a long time. What I see here is a lot of fear. Icahn, McGurk and Firestone scare people like you because they don’t give a crap about people like you. They are cold blooded about making money and not playing by Hollywood rules. I know Jay and he is smart and does not feel he has to bow to anyone in this town. Icahn is one of the richest guys around so that speaks for itself. McGurk and Yemenidgian were loved by Kirk Kerkorian because they made him a couple of billion at MGM in 5 years, whereas he had lost money the other 2 times he owned it. They did that by getting rid of a lot of deadwood there. You sound bitter so maybe you were one of the logs. They fired people and made enemies by not playing ball but the result was a big big sale. They got $4.8 Billion for a Company that got only a $1.5 Billion offer 5 years later. That pisses a lot of people off but that’s life. I think this industry needs to stop protecting the old way of doing things and realize that there will be more Icahn’s and others coming to pick off all of these troubled assets. The only ones getting rich off it though will be the lawyers and bankers (as always).
Diagnostic: Although you are acting like Michael Burns PR agent, you actually were part of the TV Division at MGM and McGurk and Yeminidgan fired you when they took over,huh? They turned over the place and people hate them for it, except Kerkorian who made billions from it. Jay Firestone bested you on a TV deal, too. That’s pretty clear. You should see the reality of things and not be so bitter and afraid. Firestone is a guy who doesn’t care about anything except making money. Icahn is worth $50 billion, 100 times what Lionsgate is worth. McGurk is a cold blooded guy who made a ton of money at MGM for himself and Kirk Kerkorian. He and Yeminidgan thumbed their nose at Hollywood. None of these guys kiss the butt of Hollywood. That’s what the future is because the business sucks now so get used to it. It’s over.
Hmmm. Mcgurk couldnt make a go of it at Overture, but he could at Lionsgate? Um, Carl, have you looked at what Lionsgate TV has done in the past 5 years? Unprecedented success by any standards. Hit show after hit show after hit show!! Get outta here!
I worked at MGM back in the day. The day being the late 90′s early 00′s. Chris McGurk and Alex Y. really turned the Company around. The employees liked working for them and we all ended up doing well because we all had stock. So I’ve read this board and some of these comments are not fair and seem to be coming from people with an axe to grind. We had ups and downs like everyone else but still had plenty of successful movies and series like 2 Bond films, Legally Blonde, Barbershop, Colombine, Hotel Rwanda, Stargate and others. the reason we exited Network TV was because we just did not have enough capital and the guy who ran it, John Symes, was not so good. Alex and Chris let him go the first week they came in in 1999 and he has not worked for a single day since, which says it all. In home video where I worked we built a cash machine that the investors who ended up buying MGM shut down, and then look what happened. Icahn is a lot like Kerkorian so who knows, maybe it is good that he is scrutinizing things at Lionsgate. I don’t know Firestone or Dorneman but they have been around a while. Have some balance and perspective instead of just taking shots.