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The Priciest Shareholder Fight Ever Is Headed to Disney's Boardroom screamed the headline in the Wall Street Journal. This is big business at its biggest. "A boardroom brawl at Walt Disney is expected to be the most expensive shareholder fight ever, and a chance for everyday investors to have a big impact," the article went on to state.
There are two activist hedge funds—Nelson Peltz's Trian Fund Management and the smaller Blackwells Capital—that are separately going after Disney to gain spots on its board and challenge the strategy of Chief Executive Bob Iger. This is happening due to Disney's poor stock performance, movie bombs and declining revenues over the past few years.
All parties involved have launched media campaigns in an effort to sway stockholders to support their vision on what Disney needs to do to regain "the magic."
Disney management touts its latest financials, a dividend hike and projects around sports, Fortnite and Taylor Swift urging stockholders to elect its board candidates at the upcoming annual meeting - not directors nominated by activist investors that it says will gum up the works as management "successfully executes a strategic transformation of the company."
"On February 7, 2024, we announced very strong results for the first quarter of FY24 – results that demonstrate we have entered a new era at Disney. Today, the Company is building from a renewed position of strength," the company's letter to shareholders said. "Your Board and management team remain committed to driving meaningful growth and creating sustainable shareholder value long into the future."
"Our strategy is working, as evidenced by our strong financial results and a series of exciting announcements reinforcing the Company's growth trajectory, including new direct-to-consumer plans from ESPN, a transformative collaboration with and investment in Fortnite's Epic Games [of $1.5 billion] and significant upcoming content releases, such as a surprise animated sequel to Moana coming to theaters and Taylor Swift's historic concert film [The Eras Tour], which will stream exclusively on Disney+."
"The stage is now set for significant growth and success," said CEO Bob Iger.
For its part, Trion Fund Management claims they want to "restore the magic" by "developing and implementing an executable plan for the streaming business, commit to a plan that includes a reasonable payback period and return profile for all future investments in the ESPN business, and execute a successful CEO succession process" among other things.
Blackwells meanwhile wants to fix things by getting their three nominees on the board and "help explore a breakup of the company."
Interestingly, in all the propaganda from each side, nothing has been said about returning the company to its core values, the values of its founder, Walt Disney. Nothing has been said about regaining its core audience by doing what it has been famous for doing for generations, being a creative, patriotic, family oriented entertainment company that embraces traditional morals and middle class values and American pride and keeping the hell out of politics.
A while back, John Nolte of Breitbart News said, "Every single one of Disney's problems comes down to its obsessive left-wing political, social, and sexual agenda, which is deliberately aimed at innocent little kids." As a former Disney creative director and VP I recognized that a long time ago. The Walt Disney Company was trusted by its core consumer base to deliver quality entertainment in a magical, fun way devoid of divisive politics and real world problems. Disney took you to the land of fantasy, not culture wars.
The New York Post published back in November, that The Walt Disney Company acknowledged that its left-leaning politics "may have alienated a segment of the population."
"Generally, our revenues and profitability are adversely impacted when our entertainment offerings and products, as well as our methods to make our offerings and products available to consumers, do not achieve sufficient consumer acceptance," the company said in its SEC filing. "Consumers' perceptions of our position on matters of public interest, including our efforts to achieve certain of our environmental and social goals, often differ widely and present risks to our reputation and brands." Yeah, no kidding.
Bob Iger blamed the creative personal for losing sight of what their jobs should be. Iger went on to state that the purpose of their role is to first entertain, rather than to get a message across. That this is news to him is mindboggling. He went on to say that storylines and films that are filled with "positive messages for the world" are a bonus, but shouldn't be the main focus of a film.
The big question for Iger is, just what does he consider "a positive message?" Is pushing transgender and homosexuality acceptance onto children a "positive message?" Is climate change indoctrination a "positive message?" Walt Disney never would have thought so. Following the golden rule, obeying your parents, hard work, a love of country, individual achievement, and learning right from wrong would be some "positive messages" that Walt Disney might have endorsed.
Acknowledging a mistake and doing something to change it are two different things. The fact may be that Iger and other upper management at Disney might just be too progressively obsessed to make that change. Their progressive agenda is at complete odds with what the Walt Disney Company was all about, and what made it so successful for decades.
Innovation, creativity, traditional family structure, good over evil, and patriotism are all part of what made the Disney Studios (and later, The Disney Company) so popular and beloved to generations of Americans. The "magic" element is really not all that magical. When you think about it, it's pretty basic. Bring honest, clean, nonpolitical entertainment to Americans of all ages. Stay out of the culture wars. Be innovative with the creativity and avoid progressive woke messaging.
Cutting big deals, acquiring major assets, and creative restructuring of business models are fine, but it doesn't mean a thing to the general public. Bring back Walt Disney's legacy of clean cut American family entertainment and you'll bring back the profits. Can't any side of this proxy fight see this? Doesn't anyone at that business level understand? Or are they too invested in their personal leftist ideology to do what's best for the company?
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