Bob Iger Stands Victorious Over Nelson Peltz: What It Means for Disney
Probably the most advertised proxy fight in entertainment history, the Bob Iger / Disney board vs. activist investor Nelson Peltz and his Trian Partners firm standoff came to a resolution on Wednesday, when the company announced that its shareholders had voted in favor of keeping the current board, with a “substantial” margin.
This was the culmination of a months-long campaign by Peltz, who was seeking two seats on the Disney board, one for him and one for former CFO Jay Rasulo, and who was backed by his peer and disgraced Marvel head Ike Perlmutter, who was fired from Disney last year amid a round of cost-cutting layoffs.
Though it had been dismissed for a long time as a minor nuisance to Bob Iger’s position as Emperor of All Things Disney, Peltz’s case gained some momentum in recent weeks when it enlisted the backing of some influential advisory firms and powerful investors. However, DealBook reported on Thursday that 75% of Disney’s shareholders voted to keep the current board and thus not include Peltz and/or Rasulo. Blackwells Capital was also seeking a board seat, but their case was much weaker and not as reported.
So what was happening here, essentially? Peltz said to have been very upset about the direction Disney has been heading into for the past few years, and it mostly comes down to the share price, which has gone down from $200 at the height of the pandemic and the Streaming Wars in late 2020, to $120 this week. But he failed to make a case for what should change exactly, and what he said (e.g., bring the costs down) is something Bob Iger has been trying to implement ever since he got back.
The company is currently in the middle of a massive restructuring as it tries to forget Bob Chapek was ever there. They laid off thousands of people last year, but also pledged to go back to the major franchises, with new installments of Moana, Toy Story, Frozen, Zootopia, and Star Wars in the works. They will be buying the remaining third of Hulu from Universal this year, and the plan is to eventually fold it into Disney Plus. Starting this month Hulu is already available as a tier on the service for an extra cost.
So why were all of these powerful firms backing Peltz and standing against Bob Iger? The thought here is that this was ultimately a referendum on Iger as a leader and a major criticism of his botched succession plan. Iger left the company in 2020, when he was succeeded as CEO by Bob Chapek. But Chapek’s reign was filled with one PR disaster after another, from a Scarlett Johansson fight over Black Widow money to a major pushback against Disney’s stance on Florida’s Don’t Say Gay Bill. Chapek also refocused the entire company to the streaming business, releasing three Pixar films on Disney Plus in a row, for instance.
Had Iger lost, it would have been a major black eye for him. The most important job for him to do in his second tenure, after returning in late 2022, is to find a successor. His current contract is up in 2026 and he should appoint one within the next 12 months so they can shadow him on the job until then. Iger’s role is one of the most complicated positions in Hollywood due to Disney’s size and reach. They who sit on the throne must be proficient in everything from sports business to parks and even understand the political meaning of Disney’s brand.
The current thought is that the successor will come within the company and will not be an outsider. Four people have been reported to be in the running, the four sub-heads of the Disney Empire: Jimmy Pitaro from ESPN, Josh D’Amaro from Disney Parks, Dana Walden from the TV division, and Alan Bergman head of the entertainment division. Of course, the problem here is that none of them know anything about each other’s areas of expertise, which is why whoever is picked should be groomed as soon as possible and presented as the new face of Disney before Iger departs again.
Despite winning the fight over Peltz, Bob Iger heard the message loud and clear. Everything hinges on his succession plans, and he should not lose sight of the focus on restructuring the company is undergoing at the moment. What this means for Disney is very simple: they should keep doing what they’re doing, but be aware that activist investors are ready to jump whenever they make any mistake.
Miguel Fernández is a Spanish student that has movies as his second passion in life. His favorite movie of all time is The Lord of the Rings, but he is also a huge Star Wars fan. However, fantasy movies are not his only cup of tea, as authors like Scorsese, Fincher, Kubrick or Hitchcock have been an obsession for him since he started to understand the language of filmmaking. He is that guy who will watch a black and white movie, just because it is in black and white.
