What no one seems able to answer is the exact relationship these days between Mark Rachesky of MHR Fund Management and Carl Icahn. The two men had a mentor / protégé relationship for some time when Rachesky was Icahn’s chief investment officer from 1990 to 1996. Now hedge fund meister Rachesky has owned Lions Gate common stock for over 5 years. But he and Icahn both started buying up Lions Gate stock separately but simultaneously, and with a frenzy, in the past months: Icahn now owns over 17.7%, Rachesky about 19.8%. Coincidence? For months now Lions Gate has rebuffed Carl Icahn’s efforts to nab a seat on the board despite the moolah he has poured into the company’s bottoming stock. That’s because the company thinks of Icahn as the proverbial Barbarian At The Gate, the guy who masquerades as a shareholder activist when he’s really a corporate raider, the father who wants Lions Gate as a showbiz future for his son. Icahn, on the other hand, sees a mismanaged mini-major not fully exploiting its potential (like that huge library) to get its share price out of the doghouse. As for Rachesky, he’s been very careful not to outwardly take a similarly combative role as Icahn regarding Lions Gate management. But the question still remains whether he’s quietly in cahoots with Carl; together they could control the future of Lions Gate. So, by keeping out a Barbarian At The Gate, did Lions Gate just let a Fox In The Hen House? There also may be a 3rd act to this shadow play. Michael A. Steinberg’s Steinberg Asset Management also has a very large position in Lionsgate now. So does Gordy Crawford’s Capital Research Global Investors which has held its nearly 10% for a long time. (Now, Crawford has almost always been supportive of the managements of the media companies in which he invests. But Gordy was thinking of siding with Icahn during the Yahoo mess.) The official Lions Gate news release, which came in this morning while I was out of the office, notes that Rachesky will support management’s slate of Board of Directors nominees at the upcoming annual shareholders meeting in September:

SANTA MONICA, CA, and VANCOUVER, BC, July 9, 2009 — Lionsgate (NYSE: LGF), the leading next generation studio, announced today that it will name Dr. Mark H. Rachesky to its slate of Board of Directors nominees to be voted on at the Company’s Annual Shareholders Meeting later this year. Dr. Rachesky is co-founder and President of MHR Fund Management LLC, which is Lionsgate’s largest shareholder and holds approximately 19.8% of the Company’s common stock. MHR has been a major Lionsgate shareholder for more than five years. The Company will announce the remainder of its Board slate in the near future.

“Dr. Rachesky is an investor who shares our vision for continued growth and diversification,” said Lionsgate co-Chairman and Chief Executive Officer Jon Feltheimer and Vice Chairman Michael Burns. “He brings a strong independent voice to our board as well as leadership in the wireless and digital media space that will be invaluable to our continuing evolution as a next generation studio.”

“I look forward to joining the Lionsgate Board of Directors and assisting management in its mission to continue building shareholder value,” said Dr. Rachesky.

MHR Fund Management will support management’s slate of Board of Directors nominees at the upcoming Annual Shareholders Meeting.