Caparro to break-up Atari?

June 17th by Stuart Dinsey

The departure earlier this month of CEO Jim Caparro has left Atari watchers expecting major changes - including a possible swoop for the business by his new employer and the break-up of its publishing and distribution operations.

Caparro has left Wall Street watchers suspicious, quitting just seven months into his reign as boss, but a director since 2002.

Only a month ago at E3 he, like chairman Bruno Bonnell, had been talking about a bold new future for Atari.

But Caparro has returned to Entertainment Distribution Company, a company he actually founded in 2003, as CEO on a hugely lucrative package.

EDC itself has just been bought by the giant Glenayre Technologies which signed up Universal Music Group’s manufacturing and distribution in the US and Central Europe as part of Caparro’s return.

All of which means that EDC could now make a move for part or all of Atari.

He has many years’ experience in the music industry and has talked about Atari’s need to re-invent itself, whilst the sales and distribution side has long been expected to be hived off as a separate business, which would then plausibly trade solely with the Infogrames name.

Any move for Atari would be listened to, given a share price languishing well below the sector average at less than $2.5 and more disappointing financial news emerging from its Q4 report earlier this week.

Caparro was passionate about Atari at E3, thus increasing speculation that he has not simply walked away. “There's an opportunity to differentiate ourselves, rather than just being a clone of all the others,” he said. “We are talking about a complete, total transformation of the company, strategically, financially and creatively.”

For his part, Bruno Bonnell is saying little right now. He has taken back the CEO and president role on an interim basis whilst the board says it’s looking for a new permanent replacement to Caparro.

Certainly, the mood is that changes are afoot at Atari and will surely emerge eventually, whilst the company was praised by Wall Street this week for its smart licensing deal with Hasbro.


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