For Blockbuster Inc., there's no rewinding to calmer days.
On Wednesday, a nasty fight comes to a head when shareholders vote at the company's annual meeting in Dallas on whether to replace three directors, including Chief Executive John Antioco, with dissidents led by veteran corporate raider Carl Icahn. Regardless of the outcome, the ailing video rental chain is likely to remain under pressure from Icahn to turn things around fast, or look for a buyer.
For weeks Icahn has made the vote a personal referendum on Antioco. Blockbuster's largest shareholder with about 10% of the stock, Icahn contends that the Dallas-based company is bleeding money while the chief executive collects fat bonuses.
Antioco counters that Icahn is spreading misinformation.
"Quite frankly, I don't think he brings any skills to this company that are going to be helpful," Antioco said.
Antioco defends his past actions, which include the scrapping of Blockbuster's unpopular late-fee system even though the move could cost as much as $300 million in operating income. He also started an online rental business that delivers DVDs by mail.
But Antioco was thwarted in his bid to buy rival Hollywood Entertainment Corp. when it was clear that the deal wouldn't pass muster with federal antitrust regulators.
Nonetheless, the 55-year-old CEO insists that Blockbuster is attracting more business.
"Our customer counts are up for the first time in several years," Antioco said. "Our transactions are up....Those are very strong indications that customers like what we are doing and are responding with their business."
Antioco predicts chaos if Icahn's group gets its foot in the door. Icahn's slate includes former BMG Entertainment Chief Executive Strauss Zelnick and former Warner Bros. executive Edward Bleier. Antioco fears that having dissenters on the board would stymie necessary moves.
Icahn didn't respond to requests for an interview. But Zelnick said he would have no set agenda if elected.
"It would be my obligation to really learn and understand," he said. "I'd make it a point not to arrive with preconceived notions."
Los Angeles businesswoman Linda Griego, a Blockbuster board member whose reelection also is being challenged by the Icahn slate, said board members carefully scrutinized Antioco's strategy.
"The impression being bandied about is that we are all his yes people," she said. "If only they knew. There is no rubber-stamping of his decisions."
