Preliminary results from yesterday’s annual shareholders meeting show that three sitting Media General directors were unseated by challengers nominated by the Harbinger hedge fund. Only those three directors were elected by holders of the publicly traded Class A shares, so they will be outnumbered by the six directors reelected by holders of the Class B shares, mostly held by members of the family of Chairman J. Stewart Bryan.
Even as it was clear he will be dealing with three new directors who don’t share his vision for the company, CEO Marshall Morton got in a dig at the dissidents. “Yes, we will be challenged by those who may not seek to act in the long-term best interest of Media General. But we are going to continue to make progress, and we are going to continue to be the leading provider of news, information and entertainment in our markets using whatever platforms our audience and advertisers want," he said.
No vote totals were issued, but Media General said the preliminary count by independent inspectors indicated that the dissident slate had prevailed. Once the final results are certified, former broadcasting executive Dan Sullivan will be taking a seat on the Media General board, along with Eugene I. Davis and F. Jack Liebau Jr. They will be outnumbered 2-1 by the Class B incumbents who were reelected, including both Morton and Bryan. The others are O. Reid Ashe Jr., Diana Cantor, Thompson Rankin and Coleman Worthan III.
RBR/TVBR observation: The turning point certainly came last week when Mario Gabelli, whose investment funds are Media General’s largest outside investor, decided to back the Harbinger slate. That put the company’s two largest outside investors in the dissident camp and guaranteed a strong vote for the dissident slate.
Gabelli had remained neutral until hosting an April 1st session for institutional investors at which both sides were invited to make their pitch. But he had previously expressed concerns about the price Media General had paid for the stations in bought from NBC, so declaring that management was out to stay the course was not necessarily the best way to court Gabelli. The Bryan/Morton regime still holds voting control of the board, but there will be three voices present pushing for change.