What really caused the downfall of video rental giant Blockbuster? Most people think it was the arrival of Netflix on the scene – but a different story is unfolding in the April issue of Harvard Business Review and online at HBR.org.
In an article called, “How I Did It: Blockbuster’s Former CEO on Sparring with an Activist Shareholder,” former Blockbuster CEO John Antioco tells his account of losing a proxy fight with activist investor Carl Icahn. Antioco details how his initial vision for the company got derailed when Icahn joined the board in 2004. Icahn immediately called Antioco’s strategy into question – publicly stating that Blockbuster had botched the Hollywood Rental acquisition, spent too much on its online business, and paid the CEO (Antioco) too much money.
Antioco doesn’t place full blame on Icahn; he looks back on what he might have done differently. But he clearly states that having a contentious board made it difficult for him to continue on as CEO of the failing company.
Icahn’s side of the story is included in a sidebar called “Why Blockbuster Failed” which chronicles his reasons for why “the board was not unhappy when he (Antioco) left.”
The conversation is continuing on HBR.org today with Antioco and Icahn going back and forth about their opinions of each other and their opposing thoughts on the future of the company. Following are a few quotes on what they have to say about each other:
Icahn: “I liked John Antioco personally. He’s not a bad guy. He was a capable executive, but I wasn’t impressed with his work ethic – his heart didn’t seem in it.”… “Blockbuster turned out to be the worst investment I ever made.”
Antioco: “I’m sure glad Carl likes me – I’d hate to see what he would say about me if he didn’t.”… “It’s always struck me as strange that it’s okay for Carl and others to make billions on their version of truth and justice, but CEOs making a lot of money, usually on stock appreciation, is ‘egregious’ (one of Carl’s favorite words).”
Visit HBR.org for the full article and discussion.