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Chris-Craft Outvoted : Warner Holders Back Chief, Oust Dissident Director

June 25, 1987|Associated Press

NEW YORK — Warner Communications shareholders helped its chairman and chief executive, Steven J. Ross, tighten his grip Wednesday on the reins of the entertainment and communications company.

The shareholders reelected Ross and three other board members but refused to return to the board a fifth nominee who had been supported by Warner's biggest shareholder, Chris-Craft Industries.

The vote came after the Warner board decided to support only the four management-backed nominees after Chris-Craft Chief Executive Herbert J. Siegel failed to affirm for it his support of the entire slate.

The decision and the shareholder vote leaves the board with only 14 members, down from 16 only a few months ago, and includes four representatives from Chris-Craft, down from six.

The three-hour meeting featured few of the anticipated fireworks and more than a few accolades for Ross from people such as film producer Steven Spielberg, who is making movies for a Warner affiliate.

"It's clear Ross has got the upper hand in this case, but it's not clear that this issue has been resolved," said Harold Vogel, who follows the entertainment industry for the investment firm Merrill Lynch.

Vogel said Siegel "is not happy, and I'm sure he will take some kind of action."

Siegel, who is a member of the Warner board himself, appeared to shrug aside the latest developments, saying as he left the meeting: "Would it matter to you if instead of losing 10-6 you lose 10-4?" an apparent reference to the margins his supporters on the Warner board have faced and can expect to face.

On the New York Stock Exchange, Warner stock slipped 62.5 cents a share to close at $34.50.

Ross and Siegel have clashed repeatedly since Chris-Craft bought a stake in Warner at Warner's invitation in late 1983. At the time, Warner was looking for assistance in warding off a hostile takeover attempt.

But differences emerged over how Warner was being run even as Ross guided it back to profitability after shedding its money-losing Atari video game division. The squabbles have ranged from timing of asset sales to overhead costs.

Currently, Chris-Craft controls 17.4% of Warner's voting stock through its BHC broadcasting unit, while Warner owns 42.5% of BHC.

Only 14 months ago, Warner gave Chris-Craft three additional seats on its board, boosting the Chris-Craft representation to six of 16 members.

That representation slipped to five of 15 last March when Chris-Craft nominee Abraham Ribicoff resigned.

Recently, the Warner board approved a lucrative compensation package for Ross over the objection of the Chris-Craft nominees.

Warner said last month that it offered to buy back Chris-Craft's stake in Warner for about $37 a share, but said Chris-Craft asked for $45 a share.

Ross said the board decided just before Wednesday's shareholder's meeting to reduce the size of its board and drop its support for the reelection of Chris-Craft nominee Howard Avery when Siegel failed to show up for the board meeting and state for the board his intentions on the full slate of five nominees. The four management-backed nominees for the board received 76.4% of the votes cast and were elected, while Avery received 21%, insufficient for inclusion on the board.

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