Reprint: R1104A
When Antioco joined Blockbuster, in 1997, outsiders were predicting that the bricks-and-mortar video rental business would be killed off by market shifts and technological advances. But he believed the company could remain relevant.
First he needed to revise Blockbuster’s business model, which was built on buying individual VHS cassettes at a hefty price and then struggling to rent each one about 30 times to make back the money. Antioco’s team persuaded the movie studios to shift to a revenue-sharing system. Then the company jumped into the online business and eliminated its late fees, which had been a major customer irritant. Five years into Antioco’s tenure, Blockbuster’s revenues had nearly doubled.
Enter Carl Icahn, activist shareholder, who had his own ideas about how Blockbuster should be managed and particularly about Antioco’s compensation package. Icahn launched a successful proxy fight and secured seats on the board for himself and two others, putting Antioco on the defensive over his strategies for growth. The situation finally came to a head in a boardroom dispute over his bonus—resolved by his departure six months later. Three years after that, Blockbuster filed for bankruptcy.
Icahn offers his version of events in a sidebar to the article.
