31 March 2007

Take-Two Takeover

The proxy fight, as an institution in US corporate life, moves in and out of the spotlight. There are times when proxy fights are rare and, in essence, symbolic. Somebody wants to make a point and sees the solicitation-mechanism as the way to do it, without any real hope of changing the corporation's leadership. But there are times, like the present, when the proxy fight - in earnest, as a way of doing just that -- becomes central.

Consider, in this connection, Take Two Interactive Software Inc. Take-Two has had its share of controversy in recent years. Its premier product is the "Grand Theft Auto" line of video games, which with their hyper-violent first-person-shooter design has become something of a paradigm for "the trouble with kids today."

Two years ago, there was actually a Congressional hearing about the nefariousness of a particular game in the Grand Theft line. It also inspired talk of a prostitutes/parents alliance. http://news.com.com/Sex+workers+call+for+boycott+of+Grand+Theft+Auto/2100-1043_3-6040420.html?tag=st.bp.story

This week a dissident group won a vote at the Take Two shareholders meeting and has installed its new board. The dissidents aren't moralists concerned with the welfare of video-game addicted childrten. They are capitalists, including the managers of Oppenheimer Funds, concerned with "unlocking value." Ain't it cool?

The new chairman of the board is Strauss Zelnick. Zelnick wants to widen the demographics of its customer base. In other words, he's decided you can only get so far by appelaing only to adolescent boys and their unending desire to shoot someone. Even with regard to those customers, the games have gotten stale and something new might be welcome -- for other customers, they were born stale.

In other business, the shareholders defeated a proposal to include social responsibility as a criteria for the setting of executive compensation. That was one of those old fashioned "symbolic gesture" proxy fights I mentioned above.

This has been today's lesson. There are actually three object lessons buried in the above prose, despite its deceptively pedestrian appearance: how change doesn't come about. How it does. And, again, how it doesn't.

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Knowledge is warranted belief -- it is the body of belief that we build up because, while living in this world, we've developed good reasons for believing it. What we know, then, is what works -- and it is, necessarily, what has worked for us, each of us individually, as a first approximation. For my other blog, on the struggles for control in the corporate suites, see www.proxypartisans.blogspot.com.