Carl Icahn has found his man. Frank Biondi — onetime head of Universal Studios, CEO of Viacom and chief exec of HBO — has joined the raider’s battle with Time Warner and agreed to run the media giant in the unlikely event that dissident shareholders triumph.
And it’s all in the family. Biondi also happens to be the brother of Michael Biondi, co-head of investment banking at Lazard, which was commissioned by Icahn to develop a restructuring plan for Time Warner. The much-anticipated study will be unveiled Feb. 7 at a press conference with Biondi, Icahn and Lazard chairman Bruce Wasserstein.
Frank Biondi told Daily Variety that his brother had approached him last year about joining an alternative board slate Icahn was assembling to change the course of TW. “I said, it depends on the slate,” he responded.
Earlier this month, they asked if he’d like to be chairman of the slate. Biondi, who now runs an investment firm called Waterview Advisors, said he agreed after reading a draft of the Lazard report and discussions with his brother and Wasserstein.
Biondi, low key, cordial and press friendly, has wide-ranging experience in the entertainment industry. But he’s had his share of controversy. He was fired from HBO in 1984, from Viacom in 1996 and from Universal Studios in 1998. At HBO he clashed with onetime mentor Michael Fuchs. At Viacom for nearly a decade, his relationship with Sumner Redstone eventually soured. At Universal Studios, he was booted by Edgar Bronfman Jr. in 1998 after several notable flops that year.
He sits on the boards of Cablevision, Harrah’s Entertainment, Hasbro, Seagate Technology, Amgen and the Bank of New York.
Biondi will now lead a proxy fight as Icahn and a group of investors challenge TW’s board with their own candidates who would be charged with revamping Time Warner following the Lazard plan — including a separation of TW’s businesses, a large share repurchase program and cuts in corporate overhead.
Time Warner’s business strategy, Biondi said, has failed to enhance shareholder value. He cited a “counterproductive bureaucracy at Columbus Circle,” TW’s headquarters, and said the conglom’s “share price has failed to reflect the inherent potential of its assets.”
Time Warner had no comment on Biondi’s role.
“As we’ve said before, the track record and performance of our management, Dick Parsons and Jeff Bewkes, is focused on our No. 1 priority — building value for our shareholders,” TW spokesman Ed Adler said. Time Warner “will review the (Lazard) report thoroughly and carefully,” he added.
Icahn’s campaign started last summer in response to Time Warner’s sluggish share price. But despite the increasing involvement of the famed corporate raider, the shares have barely budged.
“I think the primary issue is that there’s 2%-3% of the stock represented in this group. Nobody’s going to bet on a dramatic change in the company’s share price and performance based on that,” Biondi said. “Our job is the financial equivalent of a road show.” He means that he and his group have a few months to persuade investors to join before shareholders meet to elect directors at TW’s annual meeting this spring.
Biondi said several other board candidates have joined Icahn’s group so far, although no one well known in media and entertainment.
Many have been approached and declined to join the dissident slate. Crossing Time Warner with poor odds of winning seemed a risky business to some.
“There’s always a chance that we win,” Biondi said. “The nice thing is, I don’t really have to work. I serve on other public boards. I’ve got four little granddaughters running around out here,” he emphasized.
“Frank brings decades of experience building and running successful media businesses,” Icahn said. “He helped make Universal, Viacom and HBO into the successes they are today. We are confident he will do the same for HBO’s parent company, Time Warner.”