In the long shadows of Rupert Murdoch, John Malone and Henry Yuen, David Krinsky had a big hand in bringing TV Guide into the interactive age. Krinsky, a partner with the Newport Beach office of downtown L.A.-based law firm O’Melveny & Myers LLP, led a team of attorneys working on behalf of Pasadena-based Gemstar International Group Ltd. in its recent $14 billion acquisition of TV Guide Inc.
The deal, which closed in July and which Krinsky calls the biggest of his career, is part of Gemstar’s bid to create an interactive program guide that could revolutionize the way people watch TV.
Pulling it off wasn’t as easy as a click of a remote. Along with O’Melveny & Myers attorneys Jay Herron and Karen Dreyfus, Krinsky had to bring together two rivals that had previously squared off over who would control program listings in the electronic age.
The team also had to contend with a trio of powerful personalities: media tycoon Murdoch, cable icon Malone and Gemstar’s Yuen, a Chinese-born mathematician, lawyer and shrewd businessman. The supreme, single challenge of the deal was crafting a balance of power, Krinsky said.
“You’ve got three very powerful guys, all of whom in their own right have built empires inside the media and entertainment business, and all of whom view this as an emerging market of enormous importance,” he said. “You have to be very careful and thoughtful about how you put together a company, how that company is going to run and what the rules of the game are.”
To do that, Krinsky and the other negotiators created a four-person office of the chief executive to oversee Gemstar-TV Guide International Inc.
Yuen is chairman and chief executive. Peter C. Boylan III and Joe Kiener, both from TV Guide, serve as co-presidents alongside Gemstar’s Elsie Leung, who also serves as chief financial officer. While Krinsky said it sounds boring, the most intriguing part of the negotiations was the crafting of the company’s by-laws, articles and agreements and how the board and all the committees would work together. Those details were key to getting the power brokers behind the deal to sign off on it.
Patent issues complicated matters. Gemstar holds key patents relating to interactive guides. And Yuen has aggressively gone after anyone he suspects of infringing on them, including Scientific-Atlanta Inc. and San Jose-based video recorder maker TiVo Inc. That has prompted some rivals to label him a patent terrorist. A few years back, Yuen and Gemstar sued TV Guide as well. When the two companies sat down together, settling the lawsuit was one of the sticking points.
“They disagreed vehemently about the nature and extent of their intellectual property positions,” Krinsky said.
The last hurdle was getting federal regulators to OK the deal. As with every acquisition, officials had to make sure the transaction wouldn’t stifle competition. David Beddow of O’Melveny & Myers’ Washington, D.C. office led the team that worked with the Justice Department and the Federal Trade Commission.
“His services were invaluable to this transaction,” Krinsky said.
While the Gemstar-TV Guide deal closed over the summer, the makings of the alliance date back two years ago.
Back then, Murdoch’s News Corp. owned TV Guide. Malone’s Liberty Media Corp. controlled a cable channel that offered scrolling program listings. The two agreed to put them together and launched a $3 billion takeover bid for Gemstar.
But Yuen held out and persuaded his board not to sell, even though the bidders offered a hefty premium. When one of the company’s then-chairmen revolted, Yuen ousted him.
All the while, Gemstar’s share price surged as Wall Street pegged it as a takeover target. With the company’s stock as currency, Yuen went back to Murdoch and Malone and convinced them to sell him TV Guide. Krinsky didn’t have any direct contact with Murdoch or Malone, since all the negotiations were through TV Guide’s counsel at Baker & Botts LLP, he said. But Krinsky, who has worked with Gemstar since 1995, had a lot to say about Yuen.
“He’s as bright and intelligent a client as I’ve ever had, extremely creative, a visionary thinker,” Krinsky said, adding that Yuen’s interdisciplinary skills of scientist, businessman and lawyer are unusual.
Yuen’s empire came into being because he wanted to record a Boston Red Sox game on TV but had trouble programming his VCR. So he created VCR Plus, a device that made setting a VCR as easy as punching in a number. Today, interactive TV is the focus of the company.
“If you attract all those eyeballs to the screen, it becomes a portal through which people make their TV decisions and other things and also has the possibility of being a very powerful advertising mechanism and other spin-offs,” Krinsky said.
As a college student, David Krinsky had a decision to make. Krinsky had worked his way through college and part of law school by playing guitar in restaurants, mostly in the Marina del Rey area. He also played in rock bands and recorded some music. One of the groups, The Emporium of Sound, cut a track called “In the Summer Time,” which Krinsky said received some airplay.
“We were all mini-Mamas and Papas. Very mini: two guys, two girls,” he said.
While the lifestyle that went along with making music was exciting and interesting, Krinsky said it was just too much for him. Krinsky said he always had been interested in law and doesn’t regret his decision. Both of his children have inherited his love of music, he said. Married for 28 years, Krinsky’s wife is active in the Laguna Beach community where they live.
Born and raised in Los Angeles, Krinsky, 52, graduated from USC with a degree in political science in 1969 and a law degree in 1973. In 1970, he earned a master’s degree in political science at Rutgers University in New Jersey, an experience that convinced him that he wanted to settle on the West Coast.
Krinsky joined O’Melveny & Myers in 1994. His areas of emphasis are corporate securities and mergers and acquisitions law. He’s brought in such clients as St. John Knits Inc. and Corinthian Colleges Inc.
“I have been fortunate enough to produce a lot of clients,” he said.
