Of Mice And Men

It has not been a banner year so far for the Walt Disney Company.  No theatrical release has clicked, ABC is only now starting to show signs of life as its veteran scripted series are finally returning to their schedule and Disney +’s attempt to put some of the $71B of former Twentieth Century Fox IP to good use resulted in the critically reviled X MEN ’97 animated reboot, which only served to remind its fans how good the live-action movies and FOX Kids Network versions that many binged in anticipation were and how directionless the current keepers of that flame are.

I suppose you could lay some of that blame on the distractions their top brass had, and no, not just from the governor of the state that still houses their largest theme park.  A cadre of disgruntled investors, including a couple of former top Disney executives, have been waging a very public and expensive campaign to find their way back onto the company’s board and hold CEO Bob Iger more accountable for what they have seen as the creative and political missteps that have hampered what they feel should be a far better ROI for their shareholders.  Yesterday morning in Burbank, shortly before high noon Pacific Daylight Time, it at last came to a head, as THE GUARDIAN’s Callum Jones reported:

Disney saw off a boardroom coup on Wednesday, defeating a bid by one of corporate America’s most renowned activist investors to overhaul its management.

The entertainment giant announced at its annual shareholder meeting that it had secured enough votes by a “substantial margin” to defeat a campaign launched by the billionaire Nelson Peltz, who has spent months demanding change at the Magic Kingdom and excoriating its top executives.

Trian kicked off a high-profile proxy battle last year and proposed that Peltz and Jay Rasulo, the group’s former chief financial officer, replace two candidates on its board. Disney has “lost its way over the past decade”, Trian argued, blaming this on “a board that lacks focus, alignment and accountability.”

The blood feud saw its Maginot lines drawn along both economic and political lines, as Jones continued:

Shareholders in the firm voted ahead of its annual meeting. Ahead of the vote Bob Iger, Disney’s veteran CEO, had secured the backing of the company’s founding family and top names including the Star Wars creator George Lucas, the JP Morgan CEO, Jamie Dimon, and Laurene Powell Jobs, the widow of Pixar and Apple CEO Steve Jobs.

Peltz received a late endorsement from Elon Musk, who has become a vocal critic of Disney in recent months after it joined an advertising boycott of his social network X, formerly Twitter.

Not exactly a fair fight.  And not cheap, either, per Jones, (t)he company is estimated to have spent $40m fighting off Peltz.  But the Iger camp did emerge victorious.  Just like they did nearly 20 years ago, when an eerily similar chain of events unfolded, and Iger had top-tier support backing him as well, not the least of which being the namesake of the company’s founder.   Who effectively designed the playbook that Peltz and company copied virtually verbatim and exercised it not once, but twice, in previous showdowns.

As another GUARDIAN scribe, Michael Carlson, chronicled in his obituary of Roy E. Disney in 2009:

In 1984, dissatisfied with the way Walt’s son-in-law, Ron Miller, had allowed the company’s film business to atrophy, he abruptly resigned from the board and organised investors to back a takeover which saw Michael Eisner and Frank Wells installed to run the company. Disney returned to the board, becoming chairman of the animation division. Under his leadership, Disney’s animated films returned to the standard of classics such as Dumbo, Cinderella and Snow White, and enjoyed hits with The Lion King, The Little Mermaid and Aladdin.

Wells died in a helicopter crash in 1994. Over the next decade, Roy again became disenchanted with the company’s direction. Disney worried about the company’s turn away from its roots in animated features and felt himself being marginalised, particularly when Eisner feuded with the directors of Pixar, whose wildly successful animated features were produced in partnership with Disney. When Roy was excluded from a 2003 conference on the animation plans, he and (fellow board member Stanley) Gold resigned from the board and set up a website called SaveDisney.com. In March 2004, 43% of Disney shareholders voted against returning Eisner to the board. 

After another year of corporate feuding, Eisner announced that he would step down as chief executive officer a year early, in September 2005. However, to the shock of Hollywood observers, Eisner’s designated successor, Robert Iger, remained as CEO, perhaps because Roy saw Iger, who had worked his way up through ABC TV, as someone focused on the business, and because Iger acknowledged Roy’s importance to Disney’s future.

Yep.  All of this was yet another reboot, and nowhere near as successful as the original.

Still, Iger found a reason to take a victory lap yesterday, per Jones:  “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,” Iger said in a statement.

But exactly what and how that will happen is very much open to debate.  The best Iger could offer up during the balance of yesterday’s meetings was a vision for an Avatar-themed section of Disneyland and the news that ESPN+ will soon join Hulu as a button on the Disney Plus platform, laying the groundwork for a seamless way for bundled subscribers to navigate between what they’re paying for, as well as a way to goose usage and eyeballs as it pivots more toward ad-supported efforts.

And as CNN’s Oliver Darcy opined, the battle may have been won for now, but the war is anything but over:

Disney’s stock price has surged nearly 50% over the last six months, but the company’s rising value has not deterred Peltz, who has loudly complained about several issues. The 81-year-old has raised concerns Iger could stay on longer than 2026 when his current contract is scheduled to end, voiced displeasure over what he has described as Disney’s “woke” film strategy and said he wants to see the company achieve “Netflix-like margins” (who doesn’t?), among other things.  But criticizing the work of others is often easier than outlining clear proposals of your own.

And if anything, what went down this week is a reminder that Iger is indeed vulnerable, at least according to Darcy:

(F)or Iger, the ugly fight has punctured the notion that he is an unerring and untouchable King of Hollywood. While his actions rarely faced serious scrutiny, that is no longer the case. As one industry insider noted to me, “Iger has lost the aura of invincibility and infallibility.” 

Humility is not a word that comes to mind with Iger at this stage of his career. But this has been a humbling and humiliating experience for him and the board,” the person said. “And one wonders after triumphing over Peltz whether they will learn any lessons from their mistakes or whether they will simply dismiss all of this — as they have before — as a nuisance and distraction.”

So it’s up to Iger and his team to put on their collective thinking caps and find ways to revitalize the company in the manner that Iger did they last time he staved off an attempted boardroom coup.  At that time he made peace with Pixar and helped Apple successfully launch the IPod, which ultimately begat the phone and the pad where so much content is now being consumed (and, at least proprietorially, is being accurately measured).  Rumors continue to persist that ESPN content will be a crucial component and chum to attract folks to the still-overpriced Vision Pro.  Making that content more readily and ubiquitously available will only help that effort.  And it might lay the groundwork for the current leader in the Iger succession derby, ESPN topper Jimmy Pitaro, to eventually take the reins, perhaps in the employ of Tim Cook.

Iger started his lengthy association with ABC, now under its third ownership in that span, nearly a half-century ago when he worked on producing boxing telecasts for ABC’s Wide World Of Sports.  He’s still got a puncher’s chance to make this all work.

Good thing he’s got access to some large gloves.

Until next time…



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