Carl Icahn unloads on Lions Gate management

Carl Icahn unloads on Lions Gate management

Carl Icahn, Wall Street's most feared corporate raider, has taken off the gloves.

Breaking his silence for the first time about his displeasure with the management of Lions Gate Entertainment -- led by Chief Executive Jon Feltheimer and Vice Chairman Michael Burns -- Icahn got on the phone to blast its recent $250-million acquisition of TV Guide Network and TVGuide.com, saying it "borders on recklessness," and branded the company for what he described as "excessive" overhead.

On Wednesday, Icahn broke off talks with Lions Gate about gaining seats on its 12-member board.

"I was surprised that the deal broke down after agreeing not to tender an offer for the common stock and not to do a proxy fight," Icahn said in a phone interview late today. "It broke down because they refused to make the same standstill agreement applicable to any large shareholder they might give board representation to in the future."

He added, "After spending all that time negotiating, I think it was shortsighted on their part."

Obviously referring to Lions Gate's acquisition of TV Guide, Icahn said, "I believe this borders on recklessness for a company to spend $250 million of cash on an acquisition funded by a short-term revolver that is quite fragile in that the revolver comes due if any shareholder buys more than 20% of the common stock."

Icahn currently owns about 14.5% of the stock and his former investment chief, Mark Rachesky, owns just under 20%. Today, Icahn offered to buy up all of Lions Gate's public debt for as much as $325 million, tightening the rope around the company.

Regarding Lions Gate's overhead, Icahn said, "I believe it is excessive to spend $125 million on SG & A [selling, general and administrative] for a company of this size." Lions Gate had revenue of $1.36 billion during its last fiscal year.

Asked if his grand game plan was to force a sale of the movie and TV studio, he said, "In this economic environment, I'm not advocating a sale of the company."

A Lions Gate spokesman was not immediately available for comment.

-- Claudia Eller

Photo: Mark Lennihan / Associated Press

Stewart vs. Cramer: We have a winner

In the matter of Stewart vs. Cramer, I think we have a winner. (What's embedded here is the extended "Daily Show" interview with Cramer. Be aware that it contains strong language).

On Thursday's "Daily Show," Jon Stewart -- channeling Jimmy Stewart -- delivered a beatdown of CNBC's Jim Cramer, who attempted to defend himself and CNBC but, for the most part, meekly said he and his network could have done a better job in the leadup to the nation's financial meltdown.

The Daily Show With Jon StewartMTh 11p / 10cJim Cramer Interview Outtake Pt. 1Daily Show Full Episodes
Important Things w/ Demetri MartinPolitical Humor
Jim Cramer

It's hard to see how Cramer could have had any other response, given the barrage that he faced from the genuinely angry "Daily Show" host. Stewart kept his composure and never shouted, but you could tell that the games that have been played with the 401(k) savings of millions of Americans seriously ticked him off.

"I know you want to make finance entertaining, but it's not a [expletive] game," Stewart said.

The Daily Show With Jon StewartMTh 11p / 10cJim Cramer Interview Outtake Pt. 2Daily Show Full Episodes
Important Things w/ Demetri MartinPolitical Humor
Jim Cramer

Stewart's grilling of Cramer reminded me of David Letterman's confrontations with John McCain and Rod Blagojevich in the last year or so. Letterman is a master of being affable and accessible while not cutting his guests a bit of slack. On Thursday, it was as if Stewart was channeling Dave's homespun, regular-guy relentlessness. Cramer didn't know what hit him until it was much too late.

For me, the most revealing statement from Cramer came at the end of the interview, when he said this: "It's difficult to have a reporter say, 'I just came from an interview with [former Treasury Secretary] Hank Paulson and he lied his damn fool head off.' It's difficult. I think it challenges the boundaries." 

"I'm under the assumption ... you don't just take their word at face value," Stewart said to Cramer.

Boom. Roasted.

The Daily Show With Jon StewartMTh 11p / 10cJim Cramer Interview Outtake Pt. 3Daily Show Full Episodes
Important Things w/ Demetri MartinPolitical Humor
Jim Cramer

But as a commenter on Phil Rosenthal's Tower Ticker site said, "Who buys advertising on these networks? Financialinstitutions and brokerage houses do, small investors do not." CNBC is not "about to bite the hand that feeds them," Maddog wrote.

As long as that's the case, will CNBC ever change? After all, as Time critic James Poniewozik points out, the cable network's current strategy -- which involves looking for silver linings and offering ideas on how to "Obama-proof" one's portfolio -- has actually led to higher ratings.

"As the rest of the country stews over the mismanagement of insurersand banks, there's still a small, demographically appealing niche fortalking heads fulminating against the 'demonization' of business andbeing in favor of laissez-faire government," Poniewozik wrote. 

"Hey, somebody's gotta stick up for the little guy. Even, or especially, when he's the big guy."

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