Wednesday, 25 February 2009

Hollywood Babble On & On #239: Matters of Priorities

1. Nikki Finke reports that mega-investor Carl Icahn has not only increased his stake in mini-major Lionsgate, but also filed papers declaring his intention to shake things up at the company by making changes in the makeup of the board of directors.

I don't suspect that Icahn's looking for a quick buck, though the potential is there, by either selling the company, or its assets. The market's down right now, the company's not living up to the real value of its assets, and very few people are willing to get involved with Hollywood these days, what with all the financial screwings going around.

I do suspect that Icahn wants to reform and reshape the company in accordance with his chief priority, his crusade for the rights of shareholders over management. He's been fighting for years over at Time Warner for that very thing, but Time-Warner's so huge, so lumbering, it could take many more years before his crusade there bears fruit.

Lionsgate, by comparison, is much smaller, leaner, and doesn't have the sheer tonnage of a tortoise-like corporate culture weighing it down, which could make it the perfect test case for Icahn's crusade.

I hope this is the case, and that he makes the company a model for other companies to follow. And he can increase shareholder value by working out a business plan befitting a company of Lionsgate's size and strength, and by making it the best financial partner for outside film-financiers to work with. This would give them a huge leg up over the major studios, many of them being too busy driving away these same investors with their financial shenanigans.

2. This story reveals the priorities of NBC-Universal CEO David Zucker. While NBC flails with sinking ratings, stinking shows, their few decent shows (like
Life with Damian Lewis and Sarah Shahi) not getting the promotion they deserve, and layoffs flying in all directions, Zucker goes and expands his personal publicity and public relations apparatus.

This is like the captain of the Titanic stealing all the lifeboats for himself and his luggage, leaving everyone else behind.

While Icahn's priorities are based around building shareholder value through responsive management, Zucker seems all about self-promotion, and failing that self-preservation. The whole company can crumble around him, but he'll have a high-paid staff ready, willing, and able to tell the world that it's not really his fault at all, so please don't fire him.

Now Zucker's flacks will probably say that their priority is to correct a failure in communication, that's not the case. This is not a failure in communication, but a failure of priorities.

If Zucker had his priorities right, he'd be trying to save his position by finding out the problems with the company and solving them. Not trying to hope that he can "pitch" his way out of the black hole he's put his company.

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