Take-Two Shareholders Reset Board of Directors

By Chris Remo, Mar 30, 2007 10:40am PDT As expected, Take-Two CEO Paul Eibeler and the publisher's board of directors were outed yesterday during Take-Two's annual shareholders' meeting, in a coup led by a group owning nearly half of company stock. The move is the culmination of long periods of underperformance as well as public relations snafus and unsightly financial scandals, and surely by no coincidence comes on the heels of the first trailer for Rockstar North's Grand Theft Auto IV.

Take-Two's new board of directors includes incumbents John Levy and Grover C. Brown, former BMG Entertainment CEO Michael Dornemann, William Morris Agency exec Michael James Sheresky, and Jon J. Moses, CEO of online gaming coverage network UGO. Also joining the board are one time Crystal Dynamics CEO Strauss Zelnick, who will serve as chairman, and Columbia Music board member Ben Feder, who will serve as Take-Two's acting CEO. The board has not yet announced who it will install as permanent CEO.

The sentiment of the company's new directors seems to be that Take-Two has the talent and resources to publish a greater number of successful products in the video game industry, beyond Rockstar Games' evergreen cash cow franchise Grand Theft Auto, but that the company will need significant improvements in management to do so.

"The new board plans to put in place strategies designed to revitalize Take-Two, focus on supporting and enhancing its creative output, improve its margins and ensure that the 2007 release pipeline meets expectations," said Zelnick. Zelnick stated that a new plan for the company will be outlined within three to six months, with no currently planned job cuts. Industry observers have been mixed in their responses to the action, with some expressing concern that Feder has little experience relating to the games industry or to helming a major corporation.

Following yesterday's announcement, Take-Two stock prices rose some 6% in late hours trading to $21.10, but dropped today; stock is currently trading at $20.60.

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