The two biggest surprises from the flurry of board nominations made by MGM and Carl Icahn just before the Thanksgiving holiday were the candidacy of digital hotshot Jason Hirschhorn at MGM and the absence of Icahn’s son, Brett, from the investor’s Lionsgate slate.
More than a dozen names were made public last week as potential directors for the two companies as MGM seeks approval of its bankruptcy plan Thursday and Icahn pushes ahead with his proxy fight with Lionsgate at the mini-major’s Dec. 14 annual shareholders meeting. And who knows? Perhaps a few of these board candidates will serve alongside some of Lionsgate’s current 12-member board as an amalgamation of MGM-Lionsgate if a merger of the two takes place, as Lionsgate and Icahn have proposed.
For MGM, often viewed as a Hollywood relic, the nomination of Hirschhorn is surprisingly forward-thinking, particularly as the entire biz grapples with new digital distribution models. Not yet 40, Hirschhorn has served as the chief digital officer of MTV Networks, a top executive at Sling, and most recently as co-prez at MySpace. He plans to exit that position at the end of the year. It is not clear what Hirschhorn will do next. He declined to comment Monday about his candidacy to MGM.
“How often do you see a studio put somebody under 40 on its board, let alone somebody with these kind of digital chops?,” asked a former MTV executive who wished to remain anonymous. “This is a smart move.”
For Hirschhorn, MGM will be his first major board seat. In his spare time, Hirschhorn puts out an email news service called Media ReDEFined, an aggregation of the day’s top media stories that has become a must-read for many executives in entertainment.”The MGM appointments seem to reflect selections based on the new reality of film library monetization,” said C. Samuel Craig, the director of the entertainment, media and technology program at New York U.’s Stern School of Business. The other industry person nominated by MGM was former CBS chief financial officer Fred Reynolds, in addition to Spyglass Entertainment toppers Gary Barber and Roger Birnbaum, who are slated to take over running a combined MGM/Spyglass coming out of bankruptcy.
Perhaps even more surprising from last week’s news is that Icahn did not include his son, Brett, on his slate of directors for Lionsgate. The senior Icahn’s picks included Chris McGurk, a former Overture Films and MGM exec, and Michael Dornemann, a former Bertelsmann exec. The absence of Brett is perplexing since it was widely believed much of Icahn’s tenacity in trying to take control of Lionsgate, as well as MGM, was to give his son, 30, an entree into Hollywood. The younger Icahn’s experience in the biz is limited to co-founding Massify.com, an online forum for filmmakers to exchange ideas. Still, Brett started serving on corporate boards five years ago under his father’s tutelage.
But Dad’s hesitancy might be that nobody would vote for his son, said Nell Minow, editor of the Corporate Library, a watchdog organization on corporate governance. “In the past, Icahn has been legitimately criticized for picking people whose primary qualification is loyalty to him,” Minow said. “I think he is learning that his candidates’ primary qualifications should be qualifications.”
Still, it may be that Brett emerges as a board candidate yet. In addition to being the largest shareholder of Lionsgate with a 33% stake, Icahn also owns reportedly more than 15% of the debt in MGM. That will be converted to an equity position after the studio emerges from bankruptcy, allowing for Icahn to have a board seat. The candidate for that seat, the last of the nine-member board, has not yet been named by Icahn.