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Icahn Can Recast Blockbuster Board

8 May, 2005 By: Kurt Indvik

Whether or not you agree with the way Carl Icahn has conducted himself with Blockbuster Inc., he has brought into the picture a couple of interesting candidates for the company's three open seats on its seven-person board of directors, to be elected this Wednesday.

Strauss Zelnick, the former BMG Entertainment CEO (with stints as president and COO at Twentieth Century Fox and Vestron, among other companies), has always had his hand in not only entertainment but electronic and traditional direct marketing. His current gig as head of ZelnickMedia includes overseeing Columbia Music Entertainment, Lillian Vernon and the direct marketing business of Time Life media products, among other ventures. This kind of background could serve Blockbuster well as it moves forward with its electronic retailing initiatives.

Icahn's other (besides himself) candidate, Edward Bleier, served 34 years at Warner Bros., including a stint as president of the division responsible for video-on-demand and pay TV. Since February of this year, Bleier has also served on the board of RealNetworks Inc. Again, here's a guy who understands entertainment and electronic delivery of media. I'm not going to try to analyze their successes and failures in these businesses, but they at least have been in the mix.

It's no surprise that the independent Institutional Shareholder Services (ISS) has recommended to Blockbuster shareholders that they elect these two executives as well as re-elect Antioco. ISS is not recommending Icahn.

Besides Antioco, the two board incumbents, Linda Griego and Peter A. Bassi, have the bulk of their experience in packaged goods, restaurants and other nonentertainment businesses. (Griego has served as president of a TV production company.) In today's evolving digital entertainment environment, a company like Blockbuster, grounded in brick-and-mortar entertainment delivery, needs directors with deep knowledge of consumer entertainment consumption and its delivery across a broad spectrum of platforms. Certainly, Bleier and Zelnick fit that bill to a greater extent than the incumbents.

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