Carl Icahn vs. Lions Gate: Will it be a battle to the death?

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It would be easy to just write off the nasty ongoing battle between Wall Street speculator Carl Icahn and Lions Gate chieftains Jon Feltheimer and Michael Burns as yet another example of hand-to-hand combat in the Hollywood shark tank, where it’s almost impossible to really say which one of the rapacious sharks holds the higher moral ground. But the prolonged series of skirmishes, which has been ably documented by my colleague Claudia Eller -- who weighed in with another compelling dispatch Tuesday -- really boils down to a simple enough question: Is Lions Gate a well-run company?

For years, Lions Gate was a feisty maverick indie, living off of savvy critically beloved acquisitions -- the 2005 drama ‘Crash’ ended up winning the Oscar for best picture -- Tyler Perry films and gruesome horror series like ‘Saw’ and ‘Hostel.’ But Feltheimer and Burns felt the need to grow the company. They made a series of costly acquisitions, notably a $250-million purchase of TV Guide and a risky launch of a new pay-TV arm. They also bought Mandate Pictures, which allowed the top brass to install Mandate chief Joe Drake as president of Lions Gate’s motion picture group.

Drake’s mandate (no pun intended) was to begin bankrolling studio-like, mass-appeal films and launch lucrative new franchises instead of always scrambling to find new low-budget movie acquisitions. I’m not so sure I’d want to see Lions Gate run by Icahn, who seems to be something of a soulless cost-cutter. But when you look at the film side of Lions Gate’s business, it’s hard to say that Drake’s strategy has paid off.

In fact, Lions Gate has been struggling so mightily that it’s been more than a year since the studio released a non-Tyler Perry-produced film that was a sizable hit. That was ‘The Haunting in Connecticut,’ released in March 2009, which grossed $55.3 million in the U.S., a decent hit for Lions Gate, though chump change for a film at a bigger studio. And, of course, ‘Haunting in Connecticut’ was an acquisition, as is ‘Kick-Ass,’ the Matthew Vaughn film about a comic-book fan who becomes a real-life superhero that’s due out next week and is considered the studio’s hottest commercial property. (We’ll have to wait till this summer to see if ‘Killers,’ the studio’s most highly touted in-house production, has the makings of a hit.)

Icahn also says that Lions Gate’s overhead is too high. And you can’t help but wonder if he doesn’t have a point, starting right at the top. After all, after Feltheimer and Burns brought in Drake to run the film division, they literally kicked themselves upstairs to sumptuous, glass-enclosed new digs on the top floor of Lions Gate’s Santa Monica headquarters. The company now has four top executives -- Feltheimer, Burns, Drake and co-chief operating officer Steve Beeks -- all pulling down CEO-style salaries while Drake has come close to quadrupling the size of the studio’s film production division.

So far, Lions Gate doesn’t have much to show for all this lavish spending. A haircut would definitely be in order. Lions Gate is not built to compete with the Big Six studios -- it doesn’t have the resources or the library -- so it has to carve out its niche by being more nimble, more opportunistic and better built to cash in on trends before the Big Six even know they’re happening.

To use a baseball analogy, in many ways Lions Gate has always resembled the Oakland A’s, a small-market baseball team who, unable to compete with the teams with deeper pockets, flourished for years by signing and developing talent that had been undervalued and ignored by the bigger clubs. Once everyone else caught up with the A’s shrewd talent evaluation techniques, they lost their competitive edge. Lions Gate is in the same boat. They were way ahead of the other studios in exploiting the horror genre and. through Tyler Perry, serving a lucrative niche African American audience.

But now they’ve lost that competitive edge and -- so far -- haven’t found a viable new strategy for reclaiming it. Maybe Drake’s ramped-up production assembly line will do the trick, but if I were a Lions Gate stock holder, I’d feel a lot more comfortable if the studio weren’t trying to go toe-to-toe with the Big Six. It’s tough to beat the big boys at their own game.