The freshly installed Take-Two Interactive management team has a New Deal for investors, and in a conference call with analysts today laid out its goals for their first 100 days in control.
"The focus of our 100-day plan is to address each of the main issues facing the company," new Take-Two CEO Ben Feder explained. "As we've already said, our overall objective and intentions are to support and enhance Take-Two's creative output, improve margins and bring the company back in line with its peers and to ensure that [the] 2007 pipeline meets expectations and that 2008 is a highly productive year."
To do that, Feder laid out five issues that he and chairman of the board Strauss Zelnick plan to address in the next three months. The first priority is addressing the company's organizational structure, part of which involves simply getting the new management in place.
"It also includes reviewing and addressing the cost structure across the organization which is well underway," Feder said. "Secondary is assessing all business units and developing strategic alternatives for business that are determined to be non-core, unprofitable, and marginal and we're moving as quickly as possible in this regard."
Zelnick would later label the company's distribution business as "non-core," but did note that it is the largest of its kind in North America, it is profitable, and that no decisions have been made about it yet.
The remaining focal issues include "maximizing the value of critical external relationships," instituting a disciplined approach to greenlighting games (and knowing when to pull the plug on a floundering project), and resolving what's left of the company's legal and regulatory woes. Take-Two made one such step this morning with the announcement that it has regained compliance with the NASDAQ stock market's listing requirements.
Zelnick and Feder also discussed 2K Sports, and cast some doubt on achieving the previous management's stated goal of seeing the division reach profitability by the end of 2007. They didn't rule it out, but they did say if it becomes profitable, it won't be by much. Zelnick also brought up the possibility of future grabs for sports-license exclusivity.
"It's challenging to be in the sports business," Zelnick told analysts. "We have to examine all parts of the business. We certainly have to create some more exclusivity than we have now. We don't have enough exclusivity except in baseball. Exclusivity helps drive the business, and frankly, I think the strategy the Company has pursued so far in terms of the game development which is just make the best games in the business is our best hope of building a business. But there are some economic underpinnings in the business that we need to get more comfortable with and we need to act upon and we intend to do so in partnership with our licensors, and I think we will do so successfully and I think we'll build the business."