Those who follow the events at Lions Gate Entertainment Corp. -- including the movie and television studio's own management -- might have expected "activist shareholder" Carl Icahn to wage a proxy war by now given his growling threats earlier this year.
But, with Lions Gate's annual shareholders meeting set to take place today in Toronto, where the Santa Monica-based studio is incorporated, Icahn never followed through on threats to nominate his own slate of directors.
Although Icahn has never articulated a game plan regarding his interest in the company behind the Tyler Perry and "Saw" movies and "Mad Men" TV series, media analysts attribute his relative silence recently to the possibility that the company's second-largest shareholder may have less to complain about these days.
"My guess is he has softened his activist stance a bit because the stock has been up since April and the company has responded to some of his complaints," said analyst David Miller, a managing director at Caris & Co. in Los Angeles. "Lions Gate was a much leaner company going into fiscal 2010."
In February, after two lousy quarterly results and after its stock had been battered, Icahn publicly scolded Lions Gate management for spending too much on overhead, production and marketing, as well as overpaying for the acquisition of TV Guide Network.
Since last year, the management team led by Jon Feltheimer and Michael Burns has cut overhead more than $20 million, including staff reductions of 8% in November and another 8% in the spring -- slashed some $200 million out of its operating budgets and sold a 49% stake in TV Guide Network. Although a portion of the cutbacks were in the works before Icahn's complaints, some were the direct result of his banging on the door.
It also helped that Lions Gate had its best quarterly box office results ever in the previous quarter with such hits as "Tyler Perry's Madea Goes to Jail" and "My Bloody Valentine 3-D" and better-than-expected results in its earnings period that ended June 30 thanks mostly to stronger TV revenue. Film revenue was off 26%, largely because the studio had only one release in the quarter.
Lions Gate's recent action thriller "Gamer," which opened Sept. 4, is no runaway hit. But last weekend the studio scored with its latest Tyler Perry film, "I Can Do Bad All by Myself," the eighth in the franchise, which opened at No. 1 with $23.4 million.
