EXCLUSIVE
So now we get all this talk about Chris McGurk angling to become part of Carl Icahn’s rebel slate to join the Lionsgate board of directors.
Apparently the real prize is the CEO position of Blockbuster, where Icahn is the creditor in chief and McGurk (pictured left, with Lionsgate CEO Jon Feltheimer) is hoping for a shot at turning around the damaged brand.
This could solve another problem for Icahn, whose investment in Blockbuster has turned out to be a disaster.
The video ex-giant (though still the largest in the world) is currently in bankruptcy, crushed by a failure to see the Internet barrelling through its bricks-and-mortar strategy and overtaken by chief competitor, Netflix.
McGurk is hoping that getting a director’s position on the Lionsgate board where he would represent Icahn’s interest would get him the more permanent, and more powerful job of CEO of Blockbuster. (One insider close to McGurk says it is Icahn pursuing the executive for Blockbuster, not the other way around.)
Either way, McGurk is apparently interested in the challenge of reviving a “dead” iconic brand that he believes still has a pulse.
And with Icahn a major shareholder in Lionsgate and MGM also – the latter a company where McGurk once ran the show – the combination could lead to an interesting play.
Read also: Will Chris McGurk Join Icahn's Rebel Slate for Lionsgate?
As described in that earlier post, McGurk has been looking for the right gig since losing his quest to save Overture from John Malone before the Starz owner chucked that indie studio overboard.
Blockbuster is a juicy target, and Icahn has to figure out how to fix Blockbuster, where he reportedly holds about one-third of the company’s senior debt.
In 2005 Icahn waged a successful battle to get himself and two others on the Blockbuster board, and in classic fashion, agitated aggressively against then-CEO John Antioco who eventually left.
Since then the fate of the video giant has spiralled consistently downward, until this year’s bankruptcy. Icahn has lost a fortune.
His ownership is enough to allow him to dictate much of the restructuring.
Meanwhile, Blockbuster is expected to emerge from bankruptcy as a very different company, with a focus on its digital download offerings. And at this point, the agitator-in-chief Icahn needs to be part of the solution.
“Carl Icahn is obviously going to be a big force in the reorganized company, but he was a big force on the way down as well,” said Edward Woo, an analyst with Wedbush Morgan Securities in Los Angeles, to DealBook this month.
“While I respect him as a great investor, he has done a horrible job with Blockbuster, and unfortunately the chips are stacked against him because there is too much competition.”
