Gun Fight at the M-G-M Corral

Ever since stubborn old Nicholas ("The General") Schenck was eased aside as boss of Loew's Inc. in 1955, the world's biggest moviemaker has teetered on the brink of open corporate warfare (TIME, Nov. 12, 1956). The prize: control of Loew's $220.6 million in assets, including Metro-Goldwyn-Mayer studios. Last week the battle was joined, and the cannonading could be heard from Manhattan to Hollywood. President Joseph R. Vogel, Loew's third boss in two years, called a special stockholders' meeting for Sept. 12, charged that a dissident group on Loew's 13-man board was demoralizing management. He demanded the removal of two directors, and asked stockholders to increase the board to 19 to give him a working majority. Vogel's opponents, in turn, call him incompetent, argue that he should be ousted instead.

Split Board. Vogel's avowed enemies are onetime TV Producer (Dragnet) Stanley Meyer and Joseph Tomlinson, a millionaire Canadian contractor and biggest (5%) individual Loew stockholder; both have long been dissatisfied with the operation of the company. Last year, with M-G-M showing a $3,000,000 loss on movie production, the threat of a proxy war was stemmed only by a deal that split Loew's board. At the February meeting Vogel was allowed to choose six directors, the Tomlinson-Meyer group another six, with a neutral member in New York Herald Tribune President and Editor Ogden R. Reid.

Since then President Vogel has done his best to get Loew's back on the track. He planned to release 36 "worthy" pictures in 1957-58 v. only 18 in 1956, and made a succession of deals with Hollywood's independent producers to put M-G-M on a competitive par with its more alert rivals. But for Tomlinson and Meyer it was evidently a case of too little too late; Loew's estimates that its profits for the third quarter of fiscal 1957 will total exactly 1-c-. At a board meeting a fortnight ago, charged Vogel, the recommendations of an independent management survey were used to suggest that he should be removed from the presidency. The consultant, said Vogel, was Cleveland's Robert Heller Associates, and its report actually approved of his management, but noted that he obviously needed a working majority to succeed.

L.B. Rides Again? Last week, presumably weary of the boardroom battle, neutral Director Reid resigned his umpire's job. With him went two other directors. General Dynamics' President Frank Pace Jr. and Manhattan Attorney George A. Brownell,* both of whom have voted with President Vogel. Appealing to his stockholders for help, embattled President Vogel warned that the dissidents planned to put Contractor Tomlinson in as Loew's chairman, with TV Man Meyer as president. He also charged, as a final shot, that the man behind it all was none other than longtime M-G-M Mogul Louis B. Mayer, the aging (72) lion trainer who retired six years ago, but whose cream-colored, leather-paneled office is still kept vacant. Along with his two allies, said President Vogel, Old L.B. is "actively attempting to seize control."

In Manhattan at week's end neither Tomlinson nor Meyer would comment on President Vogel's charges. As for Louis B. Mayer, he denied everything. "Vogel?" he glowered. "I don't know what he's talking about." About the only interested parties who have said nothing publicly throughout the fight were Investment Bankers Lehman Bros, and Lazard Freres & Co.. who control about 20% of Loew's 5,336,777 shares outstanding. Their votes will probably decide any proxy fight.

* Distant cousin to Attorney General Herbert Brownell Jr.

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