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March 22, 2011 by · Leave a Comment 

John Antioco

Former Blockbuster CEO John Antioco and corporate raider Carl Icahn face off in the current edition of the Harvard Business Review in separate articles over the collapse of the movie rental chain. Antioco makes the case that after Icahn bought up 10 million shares of Blockbuster in 2004 he and his handpicked board members began making demands on management for changes that would not have produced significantly greater revenue — like selling greeting cards and books. They also balked at Antioco’s plans to do away with late fees and jump into the online business “in a big way.” “When directors with preconceived notions are determined to serve as obstacles to management’s plans, it’s hard to find a formula for success,” he wrote. Moreover, he said, he was able to muster little support.

Carl Icahn

“We’d just been spun off from Viacom and most of our stock was held by hedge funds,” he wrote. “They were all in for a quick pop, and Icahn is well known in that community. We were probably doomed from the start.” For his part, Icahn acknowledged that “the big blowup” between himself and Antioco came over Antioco’s compensation package, which he still regards as excessive. But he also faults Antioco’s successor, Jim Keyes, for not pursuing Antioco’s online plans, called Total Access. “Over time it might have helped Blockbuster fend off Netflix,” Icahn concludes. “To this day I don’t know what would have happened if we’d avoided the big blowup over Antioco’s bonus and he’d continued growing Total Access.”