Just returned from the Blockbuster shareholder meeting downtown, where a most curious thing happened: CEO Jim Keyes, whose company has spent the better part of a month slapping down so-called "dissident shareholder" Greg Meyer, announced that after a "colorful proxy fight," Meyer has been added to the board of directors. What the ...?
When I asked him after the shortened meeting -- which had been scheduled to start at 10 but didn't get going till closer to 10:45 -- when he'd been added, Meyer wouldn't say. Instead, the man who tried to get Blockbuster in the kiosk business long before it saw the light (and Redbox) spoke only in glib aphorisms: "I'm happy to have come to an agreement." And, "I'm looking forward to working with the board." And, "I'm looking forward to building a strong company moving forward." I asked him if he'd been coached in the finer art of cliches by Crash Davis. He smiled and said we'd talk later. "That's a wrap."
Keyes told Unfair Park that he added a seat for Meyer, and that he met with him in New York "a week or two ago" to hash out an agreement. But ... why? Because, I told him, Blockbuster's spent a hell of a lot of time and money and effort discrediting Meyer.
"The company doesn't need a distraction right now," Keyes said. "We've got plenty on our plate. It was in the best interest of everybody to move forward."
I asked him: So, then, was it less about his experience and more about quashing the fight at a time when word on the street is bankruptcy looms?
"This is a very important time for governance for Blockbuster, as you can imagine," Keyes said. "So there's a natural reluctance during such a critical time to bring in new inexperience with the current situation. With the board members who were recruited, we had plenty of time to work with them over a number of months. We've been briefing them over the last number of months, so our reluctance was more of the uncertainty and lack of knowledge" with Blockbuster's fiscal situation. "He's certainly qualified," Keyes continued, "he just wasn't our choice, although enthusiasm counts."
"Blockbuster is a good example of drama," he said, laughing again.
The shareholder meeting had been scheduled for last month -- but it was moved to late June so Blockbuster could present to shareholders its recapitalization plan. Alas, it wasn't ready. And one analyst with whom I shared an elevator after the meeting said she was "disappointed." (She was also baffled by Meyer's addition to the board, but theorized that maybe Keyes wanted him to "experience the pain first-hand.")
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Keyes, whose company has a payment on its nearly $1 billion in debt due July 1, said it wasn't finished yet -- there are still discussions and negotiations taking place with bondholders and "strategic partners," he said during the meeting. I asked him when he plans on having that plan ready to deliver.
"We're moving as quickly as possible," he said. "I wish I could say. This is a complicated process. The more parties that have to agree, the more complicated the negotiations become. Good news is we're making progress. We're discussing actively terms and negotiations with debt holders and strategic partners."
Meaning ... studios?
"Could be technology partners, could be industry partners -- cable, satellite, etc.," he said. "It's a work in progress, It's a very dynamic industry, and timing is crucial."