Blockbuster’s Antioco Agrees to Stay On

Two days after losing his board seat in a proxy battle with billionaire investor Carl Icahn, embattled Blockbuster Inc. Chief Executive John Antioco on Friday chose to remain at the helm of the video rental chain.

In a conciliatory move blessed by Icahn, Blockbuster’s board voted to create a new seat for Antioco, who will also remain chairman. Antioco had threatened to quit altogether as chief of the ailing company if he lost this week’s vote.

Although critical of some of Antioco’s expensive initiatives to revamp Blockbuster, Icahn has said he wanted Antioco to remain for continuity. Another reason is that Blockbuster could be on the hook for about $54 million in severance if Antioco left.

On Friday, Antioco, who has run the Dallas-based company since 1997, pledged to collaborate with the new board.

“I look forward to working with the board and our management team to maximize our many strengths and growth opportunities,” Antioco said.

Icahn did not return calls seeking comment.

The decision came in a late afternoon conference call after the official vote was tallied from Wednesday’s meeting in Dallas.

Only 51.8% of eligible shareholders voted -- a relatively low turnout.

Blockbuster would not confirm the exact percentage that Icahn’s slate received, but preliminary results showed 77% of the shares voted were cast for Icahn and his two candidates, former music executive Strauss Zelnick and former Warner Bros. executive Edward Bleier.

Blockbuster has eight board seats, three controlled by Icahn’s group.

Icahn’s victory was the latest twist in the company’s recent troubles. Under attack by mass merchandisers such as Wal-Mart Stores Inc. that sell low-priced DVDs, and by online rental companies such as Netflix Inc., Blockbuster has seen its fortunes decline in the last decade.

As Blockbuster’s largest stockholder, Icahn has questioned some of Antioco’s decisions to address the company’s troubles, such as spending millions to launch an online business.

He also has criticized Antioco’s multimillion-dollar bonuses, and suggested the company may have to be sold if it isn’t turned around soon.

Blockbuster’s stock price fell 12 cents to $10.15 a share on the New York Stock Exchange.