The battle over the future of Disney just got serious.
Here's the deal: There's been a long-simmering feud between Disney's CEO, Bob Iger, and an activist investor named Nelson Peltz, who's been angling for a seat on the media conglomerate's board.
On Thursday, Peltz said he would once again nominate himself and Jay Rasulo, a former Disney chief financial officer, for election to Disney's board — just weeks after Disney turned down Peltz's bid for a board seat.
The feud has deep roots, but it's intensifying now because Peltz and his Trian Fund Management are unhappy with Iger's leadership. Over the past few years, Disney's back has been on the ropes as it struggles to confront the tectonic shifts in the media industry. It's had a surprising number of box-office flops; viewership for movies and linear television if falling; and Disney, like most other companies, has yet to turn a profit from its streaming business.
Peltz is hungry for a turnaround.
"As Disney's largest active shareholder, we can no longer sit idly by as the incumbent directors and their hand-picked replacements stand in the way of necessary change, and peers and competitors continue to outperform," Peltz said in a statement. "Shareholder-led board refreshment ... is long overdue."
Trian contends that the current board is "too closely connected to a long-tenured CEO and too disconnected from shareholders' interests."
Disney said it would review the proposal, while defending its board as "experienced, diverse, and highly qualified."
Big picture
When Bob Iger returned for a second stint as CEO, shareholders cheered it as the second coming of ... well, Bob Iger — the man who made Disney into the modern super-mega media titan with control of some of the most lucrative IP in entertainment history.
But hopes that Iger could snap his fingers and Mary Poppins his way out of the mess Disney found itself in during the pandemic were always a little too sanguine. Iger himself told employees last month that the Great Return has been harder than he expected.
"I knew that there were a myriad of challenges…I must say there were many more of them than I expected," he said.
Disney+, the company's streaming platform, has hemorrhaged cash as the company struggles to transition to the age of streaming. While Disney has said it expects its streaming segment to start generating profit by the end of next year, it lost streaming subscribers in the US and Canada last quarter. Viewership is also down at ESPN, Disney's former cash cow.
Iger told employees that he has spent a lot of time "fixing things." But now, he wants to transition into a "building" phase.
He'd better build fast, because it seems the Peltz proxy battle isn't going away anytime soon.
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