MANAGEMENT: Loew’s Woes

The angriest running battle for control of a major U.S. movie company reacheda climax last week. At a special stockholders’ meeting, the management of Hollywood’s infirm old lion, Loew’s Inc., owners of Metro-Goldwyn-Mayer studios, outvoted the forces of Millionaire Canadian Contractor Joseph Tomlinson, Loew’s biggest (5%) and unhappiest stockholder. By 3,449,446 ballots to 519,435, shareholders gave President Joseph R. Vogel a solid grip on his board of directors by increasing its membership from 13 to 19. Then they voted in nine management nominees to fill ten empty seats (including four recent resignations). The tenth seat fell to the management’s critics, who put all their cumulative votes behind Veteran Movie Executive Sam Briskin, 60, onetime production chief for Columbia and RKO. Final count: 13 directors for Vogel, six for his critics.

One notable byproduct of Vogel’s victory was his apparent defeat of two mighty Wall Street investment houses−Lehman Bros, and Lazard Freres−who are dissatisfied with Loew’s management (TIME, Nov. 12). Lehman and Lazard figured to control about 3,000,000 of the 5,336,777 shares outstanding. Yet last week they voted only 150,000 shares for the rebel cause. A Lehman-Lazard spokesman contended that the two firms can still control approximately 3,000,000 shares. But they do not appear to want to lead a proxy fight themselves, nor do they support Tomlinson’s bid to power. Actually, the bankers aimed only to joggle Loew’s management by placing more real movie pros on the board; in this case their choice was Briskin.

It will take harried President Vogel more than a friendly board to put Loew’s tangled affairs back in order. Despite many economies, he admitted that Loew’s last quarter, ending Aug. 31, “was very bad.” Wall Street buzzes that the company had to borrow $5,000,000 recently to meet payrolls, that its moviemaking operations are losing $1,000,000 a month, and that Loew’s may be forced to pass its usual 25¢ cash dividend this quarter. Said Millionaire Tomlinson, who sees his $5,000,000 investment in Loew’s growing slimmer and slimmer: “I may have made mistakes. But my biggest mistake was to buy into this company.”