Mickey Mouse and Minnie Mouse at the Disneyland Hotel reopening celebration at Disneyland Paris on February 3, 2024. Photo: Kristy Sparow (Getty Images)
The atmosphere at Disney’s corporate offices must feel slightly lighter these days, between Disney World’s recent detente with Florida Gov. Ron DeSantis, and news today that shareholders have voted against billionaire “activist investor” Nelson Peltz’s attempt to snag two seats on the company’s board.
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As io9 previously explained, a behind-the-scenes situation that probably wouldn’t interest the average Disney fan suddenly became more headline-worthy when Peltz gave an interview to the Financial Times in which he complained about diversity in recent Disney Marvel projects, including last year’s The Marvels and the Oscar-winning smash hit Black Panther. “Why do I have to have a Marvel [movie] that’s all women?” the 81-year-old asked. “Not that I have anything against women, but why do I have to do that? Why can’t I have Marvels that are both? Why do I need an all-Black cast?” Not only was this attitude off-putting to fans, it also rubbed high-profile Disney shareholders the wrong way—including Star Wars creator George Lucas, who spoke out against Peltz’ proxy fight.
As the Hollywood Reporter updates, today’s annual shareholder meeting proved to be “a win for the Walt Disney Co. and CEO Bob Iger” as all of the company’s director nominees “have been elected by shareholders, rebuffing the activist investor Nelson Peltz, who had been running a high-profile campaign to put himself and former Disney CFO Jay Rasulo on the company’s board.”
Sources cited by the trade make it sound like the voting wasn’t exactly close, coming out decisively in favor of Team Iger. THR also has a statement from Iger, who sounds ready to put the Peltz situation in Disney’s rear-view mirror as quickly as possible: “I want to thank our shareholders for their trust and confidence in our Board and management. With the distracting proxy contest now behind us, we’re eager to focus 100% of our attention on our most important priorities: growth and value creation for our shareholders and creative excellence for our consumers.”
So-called activist investor Nelson Peltz, who’s aiming to win two Disney board seats, has stirred up some controversy by calling out Disney’s recent era of “woke” strategy through diversifying its slate of films at Marvel Studios.
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The 81-year-old businessman, whose experience is with food companies including Wendy’s and H.J. Heinz as well as having once supported the DeSantis presidential campaign, had a lot to say about The Marvels and Black Pantherin an interview with the Financial Times. “Why do I have to have a Marvel [movie] that’s all women?” Peltz asked the publication. “Not that I have anything against women, but why do I have to do that? Why can’t I have Marvels that are both? Why do I need an all-Black cast?” Side note: Peltz happens to be the father of Nicola Peltz, who played Katara in 2010’s infamously very white Last Airbenderadaptation.
He continued, “People go to watch a movie or a show to be entertained. They don’t go to get a message.” Since he also claimed that he doesn’t have experience in media, it’s interesting to note that Peltz’s Trian Partners is pushing for this vote as part of Ike Perlmutter’s hopes for retaliation against Disney CEO Bob Iger, who terminated him from Marvel Entertainment last year. Variety reported that, “Trian controls roughly $3.5 billion worth of Disney stock, 79% of which is owned by Perlmutter.” This goes back to Perlmutter’s feud with Kevin Feige, who pushed for Black Panther and Captain Marvel. Perlmutter fought against diversity in Marvel’s slate until Iger stepped in to force his hand and allow the films to be made.
Ryan Coogler’s Black Panther, starring the late Chadwick Boseman, was a hit with $1.35 billion at the worldwide box office; it kicked off the Academy Award-winning franchise and brought more inclusivity to the Marvel Cinematic Universe. Proving Perlmutter wrong publicly while revealing the lengths the forner Marvel exec went to in order to stop diverse superhero toys, merch, and movies being made really propelled Feige into the public’s good graces. Recent misses for the studio including The Marvels havecaused some Marvel watchers to wonder if Feige’s position should be called into question. When asked by the Financial Times if it should, Peltz responded, “I’m not ready to say that, but I question his record.”
Disney board member George Lucas recently stood up against Peltz by releasing a statement (reprinted in Variety and elsewhere) to support Bob Iger in rejecting his bid. “Creating magic is not for amateurs,” Lucas said in a shot right at Peltz, who also admitted to the Financial Times he’s been a bit of a bully. (“What sense is being a billionaire if you’re not a bully?” Peltz has been quoted as saying.) Which is such a strange stance to bring into Disney, standing directly against all it represents.
Lucas continued, “When I sold Lucasfilm just over a decade ago, I was delighted to become a Disney shareholder because of my longtime admiration for its iconic brand and Bob Iger’s leadership.” He added, “When Bob recently returned to the company during a difficult time, I was relieved. No one knows Disney better. I remain a significant shareholder because I have full faith and confidence in the power of Disney and Bob’s track record of driving long-term value. I have voted all of my shares for Disney’s 12 directors and urge other shareholders to do the same.”
Peltz aims to add more board seats for his hedge fund firm through his Disney bid and support the agenda that Ike Perlmutter, his silent third party partner, has advocated for during his Disney tenure. The Hollywood Reporter disclosed that Perlmutter had this up his sleeve as soon as he was terminated, as he immediately pledged his stakes in Disney to Peltz. Before Iger came back Peltz had attempted a proxy battle with the company as a result of its losses, but was held off by his return. With this seat bid he hopes for round two in having more direct influence on the company board.
Disney is facing a proxy fight as Nelson Peltz’s activist firm Trian Fund Management pushes for a seat on its board.
Peltz spoke on CNBC’s “Squawk on the Street” on Thursday, making his case for the fight his firm has picked with Disney, raising issues with Disney’s $71 billion acquisition of Fox in 2019 and how the company has eroded shareholder value in recent years.
“Fox hurt this company. Fox took the dividend away. Fox turned what was once a pristine balance sheet into a mess,” Peltz said Thursday.
On Thursday, the activist firm filed a preliminary proxy statement looking to put Peltz on Disney’s board.
To preempt what could be a messy proxy battle and opposing Trian, Disney on Wednesday announced that Mark Parker, the executive chairman of Nike, would become the new chairman of the board. Disney’s board will now have 11 members.
The activist firm said it owns about 9.4 million shares valued at approximately $900 million, which it first accumulated a few months ago. Trian said Wednesday it believes Disney “lost its way resulting in a rapid deterioration in its financial performance.”
Peltz also said he wants to be on the board so he can get access to internal numbers and tell other members if they’re missing out on opportunities.
“I don’t need to overwhelm them,” Peltz told CNBC. “I don’t need more than one person on the board.”
Trian called out what it viewed as poor corporate governance on Disney’s part, including failed succession planning, “over-the-top” compensation practices and Disney’s lack of engagement with Trian in recent months.
In public filings Thursday, Trian listed its numerous meetings with Disney and its board members, beginning with then-CEO Bob Chapek, Peltz and their wives over lunch in July. Meetings and correspondence between Trian and Disney ramped up in frequency in November, according to the filing.
Peltz on Thursday said he only had a meeting with Disney’s board that spanned about 45 minutes, but he never heard a response from them. A Disney representative didn’t immediately respond to comment.
Peltz also noted that Disney was open to making him a board observer, allowing him to sit in on meetings and give advice on operations, but without voting privileges.
“I don’t need to overwhelm them. I just need to speak reasonably to these people and explain to them where they went wrong or what opportunities they’re missing,” Peltz said Thursday, noting companies other where he’s sat on the board.
People close to Disney told CNBC’s David Faber they disputed Peltz’s version, saying instead the company offered him the opportunity to enter into an information-sharing pact under a nondisclosure agreement, along with opportunities to meet with management and the board each quarter. Disney did not offer him the ability to sit in on board meetings, the people added.
In November, Bob Iger made a surprising return to Disney’s helm, ousting Chapek – whom Iger chose as his successor – following a poor earnings report. Trian has said it doesn’t want to replace Iger, but rather work with him to ensure a successful CEO transition within the next two years.
Parker will take over as chairman from Susan Arnold, and will be tasked to lead succession planning, according to Disney’s announcement on Wednesday.
In Thursday’s filing, Trian also called out Disney’s streaming strategy, saying it is “struggling with profitability, despite reaching similar revenues as Netflix and having a significant IP advantage.” The firm also criticized what it believes is Disney’s lack of cost discipline and overearning at its theme parks business to subsidize streaming losses.
Disney’s stock had a rough 2022, coming out of the early days of the pandemic, when theme parks and movie theaters were shut down. However, as subscriber growth for streaming slowed and investors raised questions about profitability, while cord-cutting ramped up, most media stocks fell last year.
On Thursday, Peltz said Disney either needs to get out of the streaming business, or buy Hulu. “They must buy Hulu, that unfortunately means the company will have a debt load going forward for several years,” Peltz said.
While Disney+ is the company’s main play in streaming, Disney also owns two-thirds of Hulu and has an option to buy the remaining stake from Comcast as early as January 2024.
Last year, Disney also announced it would proceed with cost-cutting measures, including a hiring freeze that Iger has upheld.
–CNBC’s David Faber contributed to this report.
Watch on CNBC’s full interview with Nelson Peltz on PRO:
Disclosure: Comcast is the parent company of NBCUniversal, which owns CNBC.
