Carl Icahn and his allies, with their 3.3 percent ownership in Time Warner, were never going to gain a good race pace lead. A crushing blow came from a recent collective yawn Wall Street analysts gave off in response to Icahn's plan to break the company into four pieces.
Gee, it's not as if anyone thought that up before. Media companies have been regularly breaking up and getting back together over many decades. (Of course, there's the make-up sex to consider).
Overall, Icahn now just wants some concessions--perhaps a little more stock buyback than Time Warner and chairman Dick Parsons originally conceived.
Icahn is no longer pushing Time Warner to spin off its cable operator business or the Time Inc. magazine group. Still wanting to save a little face, Icahn is putting up five members for election to the board for the May shareholder meeting. This is far short of any majority for a company with a 14-member board.
So, it's back to the drawing board, or just back to being bored.
It's a tiring fact that Time Warner will never hit that magical $90-plus share price once envisioned after AOL bought out the company in 1999. Icahn and veteran TV executive Frank Biondi can drag out the old complaint that the AOL deal severely damaged the company. But that wasn't Parsons' call. Blame him for not getting MGM or DreamWorks, but not much else.
Breaking up in not only hard to do--it's hard to make stick. Parsons doesn't think the new Viacom-CBS model will work for Time Warner. Media companies like Time Warner still have synergistic instincts--and should be used to build value.
Some of that synergy is concretely revealed in those multimedia, cross-platform deals--deals that were heralded in the late '90s as the next wave in media planning and buying.
Cross-media deals have seemingly worked at Walt Disney and at Viacom--though a Viacom-CBS split is making those deals harder to do.
At Time Warner those deals not only did not bear real fruit, but they also contributed confusion and also added to AOL's accounting problems.
Time Warner's future battles won't be waged in four Icahn-like pieces, but they also won't be built around major advertising deals crossing company lines.