DIS Shareholders and Stock Info ONLY

[GAN]

I humbly defer to your detailed analysis of Fox's intellectual property values. There's no question this content will create income for years to come and it complements a core strength of DIS since the company was created - story telling.

I'll take this opportunity to expand on my theory of why ABC/ESPN has to go, and never should have been bought to begin with.

What is ABC? Soap operas, news, and prime time programing.

DIS needs to be nowhere near news reporting of any kind, whether it be ABC, CBS, CNN, Fox News, or the Associated Press. News is by nature highly political, and that's a no win for DIS every time. It's part of what has diluted the DIS brand over the past 20 years, and the amount of time and resources diverted to that end aren't worth the candle.

Soap operas and prime time? Not at all compatible with storytelling in the DIS tradition.

ESPN? Sports is certainly show biz nowadays, and has made money, but it has also become more political in the past couple of decades. I don't see that changing, and that's not a good thing for DIS. With the increased costs, it won't be a money maker for much longer.

Oh no... not the "p" word angle! It's sooo tired.....

 

[Mai Ku Tiki]

Not much there honestly.... he donates to political parties.

It's only interesting to someone who thinks that may impact decisions by Iger & Board toward Peltz since TWDC in Florida is being impacted by how the company (& individuals) donates $$. FWIW.

 

[wabbott]

Otherwise, what would happen to the very large and profitable ESPN area at WDW?

A fifth gate. Right now.

 

[RivShore]

A fifth gate. Right now.

Had not thought of that! Sell it now and get to work!! If they move over the construction crew from Tron, it should be done by the year 2121.

 

[GAN]

It's only interesting to someone who thinks that may impact decisions by Iger & Board toward Peltz since TWDC in Florida is being impacted by how the company (& individuals) donates $$. FWIW.

I was hinting that it looks like he donates to both parties -whatever suits his interests(like many millionaires) so there wasn't much there there...

 

[wabbott]

Had not thought of that! Sell it now and get to work!! If they move over the construction crew from Tron, it should be done by the year 2121.

How about a WDW version of Tokyo DisneySea?

 

[wabbott]

Looks like some new info here.

https://finance.yahoo.com/news/investor-peltz-corporate-doctor-pushes-111534971.html


Investor Peltz, corporate doctor, pushes Disney to take bitter pill
Svea Herbst-Bayliss and Dawn Chmielewski
Fri, January 13, 2023 at 5:15 AM CST

NEW YORK (Reuters) - Billionaire activist investor Nelson Peltz often presents himself as a partner with constructive advice for corporations and in 2019 Walt Disney Co Chief Executive Bob Iger was eager to hear his ideas.

But in 2023, Iger, who came out of retirement in November to again lead the media giant after a 66% decline in quarterly profit, does not want Peltz as a Disney director. Still, the fund manager has a compelling case to push for change, with Disney's stock price down 36% over the last 52 weeks.

Weeks of discussion last year ended with Disney denying Peltz's request for a board seat leaving the parties embroiled in what bankers and lawyers say may become one the most expensive and explosive proxy contests in recent history.

Longtime Disney CEO Iger returned late last year to help stanch losses from the fledgeling streaming service Disney+. Three years ago, Iger had invited Peltz to speak to Disney's board about his philosophy, Peltz's firm Trian Fund Management said and a source close to Disney confirmed. At that time Trian did not own Disney stock.

Then Trian amassed a 0.5% stake in Disney last year and Peltz wanted a bigger voice and vote after criticizing capital spending, past acquisitions and a bungled succession plan.

When he requested a board seat, Disney balked and instead offered an "information sharing agreement." This would let Peltz speak with the management team and the board but not have a vote as a director.

Iger and other directors agree Disney needs to cut costs, and many cuts have already been announced. They say they want to continue the dialogue with Peltz but expressed concern that had not made concrete suggestions to address the problems he identified, people familiar with the company's thinking said.

Media analyst Michael Nathanson agreed with Peltz and wrote in a note that "many of Disney's wounds are self-inflicted," but expressed confidence in Iger's ability to "make the difficult decisions" required to improve Disney's long-term profitability.

Peltz and his colleagues mostly negotiate for changes out of the limelight and have been invited by 15 companies, including Unilever Plc and Invesco Ltd, to join the board. Peltz himself has served on 11 boards. At three -- Procter & Gamble, H.J. Heinz and DuPont de Nemours -- Trian waged boardroom battles that went to a vote where all investors got a say on whether Trian should have a seat.

While those three companies worked hard to keep Trian out, their CEOs later lauded the firm's collaborative efforts and insights. Mostly Peltz's medicine worked as Trian said companies where he was on the board outperformed the broader S&P 500 stock index by 9% during his tenure.

For Disney, however, Peltz may be an especially aggravating activist, arriving shortly after Third Point's billionaire founder Daniel Loeb showed up again last year. Disney and Loeb engaged in conversations and the two sides quickly agreed to add media executive Carolyn Everson to the Disney board.

FASTER FASTER

Many times activist investors push corporations for changes the company may already be considering. But they want management to act faster and more broadly.

Indeed Peltz may be betting the playbook he used at P&G will work at Disney too. This includes updating aging brands, simplifying bureaucracy and bringing along binders of information and data to find new ways of doing things.
With Disney's stock swooning, investors are unhappy and may be ready to back Peltz in a vote, investors and advisers who are not permitted to speak publicly said on Thursday.

Firms including T.Rowe Price, Legal & General Investment Management, Nuveen and Dimensional Fund Advisors are invested in Disney and are invested in P&G as well where they saw shares climb with Peltz on the board.

In his current battle, Peltz may be helped by new U.S. regulations that allow investors to see all director candidates on a so-called universal proxy card. Bankers and lawyers say this process may make it easier for activists like Peltz to win at least one board seat at an election. This is because investors can now pick and choose instead of selecting either all of the activist's choices or the company choices.

"Even though Disney has publicly rebuffed Peltz's agenda, this proxy battle is likely to cause more ripples," said Paul Verna, principal analyst at Insider Intelligence. "In the current climate, with Disney's stock underperforming the market and a slew of unfavorable economic conditions and business dynamics, Peltz may have more leverage to force Disney's hand."

 

[Cfabar1]

I’m trying to figure out Disney’s hard line here. One board seat won’t remake the entire board.

I do find it odd a man this old (who is therefore ineligible without special exemption to be on the board), would be interested in this.

I do worry that Iger kind of went into “Eisner“mode - massive expansion, and overpaying for something with the word Fox in the title. Betting the farm on that idea.

I struggle to see how Disney can function without ABC/ESPN. Media companies are becoming bigger and bigger. I do like the idea of selling off any owned stations. Maybe Scripps or some other firm might be interested in acquiring them.

I see the future of media being content and global scale. I don’t see it being local television affiliates. Could use that money towards the Hulu costs or to pay off debts.

The big things to do are harder to see other than execute better. The parks have really been taking it on their back to appease the streaming needs, but it is clear that the future is streaming. Hulu without Disney/FX/Fox is worth very little. I do think they were green lighting too much too quickly.

 

[Jrb1979]

I’m trying to figure out Disney’s hard line here. One board seat won’t remake the entire board.

I do find it odd a man this old (who is therefore ineligible without special exemption to be on the board), would be interested in this.

I do worry that Iger kind of went into “Eisner“mode - massive expansion, and overpaying for something with the word Fox in the title. Betting the farm on that idea.

I struggle to see how Disney can function without ABC/ESPN. Media companies are becoming bigger and bigger. I do like the idea of selling off any owned stations. Maybe Scripps or some other firm might be interested in acquiring them.

I see the future of media being content and global scale. I don’t see it being local television affiliates. Could use that money towards the Hulu costs or to pay off debts.

The big things to do are harder to see other than execute better. The parks have really been taking it on their back to appease the streaming needs, but it is clear that the future is streaming. Hulu without Disney/FX/Fox is worth very little. I do think they were green lighting too much too quickly.

Since Covid it feels like Disney has lost their way. Panicked by throwing all their eggs into streaming. Neglecting the parks by having no plans to invest in them much after Tron. Now you add this possible take over which would be terrible for the company. It's one disaster after another.

 

[Cfabar1]

I will say, UN popularly, that Disney has lost its way since the death of Frank Wells. We will never see a time as amazing as that early Eisner/Wells era….

Iger did some good things - invested and shepherded the company - made great friends with people like Lucas, Jobs, and others that helped put the company on the right path, and also reinvigorated the parks.

At the same time, it was during his leadership Disney became much more corporate. DVC imposed massive restrictions on resale contracts for example, Disney stopped making non-tentpole movies (movies like Sister Act, The Santa Claus) would never be made today, hand drawn animation was ELIMINATED (sad). A focus on profits became even more aggressive than under the Eisner administration.

And now, we don’t have Roy Disney, we have a corporate raider who I do not trust, as much of a siren song his words may sound like….

 

[RivShore]

How about a WDW version of Tokyo DisneySea?

That is a great idea! from all that I have read and seen, it is a fantastic park and it seems like currently, more of the old creative Disney sits in those Japan parks, which is odd and sad being that it is not owned or managed by Disney.

How about a joint venture to build the park with Oriental Land Co. That way the Disney balance sheet won't have to take the full brunt of the investment, and Disney gets some different expertise from them.

 

[wabbott]

https://www.ash.org.au/market/for-a...ger-probably-agree-streaming-has-to-be-fixed/

For All His Criticisms of Disney, Peltz and Iger Probably Agree: Streaming Has to Be Fixed​

January 14, 2023


“Great news: Nelson Peltz made a slide deck about me,” said no CEO ever. But maybe
Walt Disney’s Bob Iger had mixed feelings about the 35-pager that dropped this past week.

One one hand, it says that he squandered billions on the 2019 Fox deal; that he botched succession planning; that current streaming costs are bloated; that Disney parks are squeezing visitors and workers; and that Iger’s past pay was “over the top.”

On the other hand, Peltz wants Iger to stay; some of the above stuff can be pinned on departed CEO Bob Chapek; activist interest provides cover for cost cuts; and the 3.6% lift Peltz gave Disney stock on Thursday accrues to Iger’s record.

Unfortunately, Peltz PowerPoint roasts don’t work cumulatively—a couple of dozen more won’t get Disney (ticker: DIS) stock back from its recent $100 to its March 2021 high of $203. That could require a delicate, industrywide shift in spending and pricing. For media stocks to start working again, streaming probably has to become a worse deal for customers.

Peltz, for those unfamiliar with him, is the son of a lower Manhattan food distributor, which helps explain his turnaround taste: His deals include Wendy’s, Heinz, Danone, PepsiCo, and Domino’s Pizza. He snatched Snapple from Quaker Oats in 1997 for $300 million, and flipped it to Cadbury Schweppes three yearsSti later for $1.5 billion. In 2005, he co-founded Trian Partners to buy stakes in bigger companies, including in nongastronomical industries. From 2016 to last year, he bought into Procter & Gamble (PG), muscled his way onto the board, collaborated on streamlining, parted on friendly terms, and sold at a profit.

One Peltz approach is to make a slide deck, show it to management, ask for a board seat, and, based on the response, decide whether to make his slides public. The Disney ones say Trian spoke with Chapek in November and asked for a seat. Chapek was ousted later that month and Trian was turned down, in its telling, “after one short call with management” and “without hearing us out.”

The rest of the deck, titled “Restoring the Magic,” is mostly history, with some important current grievances, but not much by way of a plan.

Among Iger’s many Disney achievements were three acquisitions—Marvel in 2009 for $4 billion, Pixar in 2006 for $7.4 billion, and Lucasfilm in 2012 for $4.1 billion—that spawned a box office run for the ages, and endless merchandise and theme park tie-ins. His more recent purchase of film and television assets from Fox for $53 billion, net of acquired cash and resulting divestitures, is looking less successful.

Peltz argues that Disney’s adjusted show-business earnings should have climbed from $9.4 billion before the Fox deal to $13.3 billion with promised synergies, but have instead fallen to $3.1 billion, or $7.1 billion not counting streaming losses. “Is there a large Fox write-down on the horizon?” his report asks. Debt is up, the dividend is gone, and the stock has stunk. As Peltz puts it, Disney has spent $162 billion since 2018 on deals, content, and capital investments, and the result is a halving of earnings per share.

Only most of this is fair. Disney’s pricey push into streaming was forced by the rise of Netflix (NFLX) and resulting declines in cable television subscriptions. When Netflix’s stock market value overtook Disney’s, it was clear investors valued new streaming customers over cash flows. So Disney responded, and investors cheered. Then rates rose, and investor preference flipped. By then, more companies had piled into streaming, leading to cut-rate pricing and a content war.

Now companies are raising prices, adding commercials, or both, while cutting production budgets, especially since box-office sales haven’t recovered from the pandemic. Peltz writes that Disney took a “ready, fire, aim” approach to streaming, taking it from a niche to the center of content distribution too quickly. Maybe so, but that’s what investors insisted they wanted.

Peltz points out that Netflix, which generates more streaming revenue than Disney, has lower noncontent expenses, resulting in better streaming margins, a sign Disney “lacks cost discipline.” Disney+ will no doubt factor prominently in what Iger has promised will be a “hard look” at costs. But it’s worth recalling that the service has been live for just over three years, whereas Netflix has been streaming since 2007.

I’m with Peltz on parks, where he says Disney is “overearning” to make up for streaming losses. During a family trip to Disney World in August, costs and hassles were way up, and fun seemed down, compared with trips before the pandemic. But part of that judgment is fraught with bias. Saturday Night Live producer Lorne Michaels has said that when people tell him the show peaked in this or that decade, what they’re really saying is that’s when they were young. I don’t want to be one of those cranks who mistakes his kids growing older for the parks going downhill, and pooh-poohs the experience for young families.

Chapek said last year that customer satisfaction scores were still riding high. Since Iger’s return, Disney has gradually reversed some top annoyances—restoring free parking for Disney World hotel guests, for example.

The problem with Disney stock is that although its price has been cut in half, it doesn’t seem egregiously cheap. Free cash flow is pegged at a depressed $4.6 billion this fiscal year ending September. The market value is close to 40 times that figure. Consensus estimates have free cash flow rebounding to $10.1 billion by the fiscal year ending September 2025, which works to a multiple of 18. But the S&P 500 trades at 18 times nearer free cash flow—next year’s consensus.

Ultimately, whether Peltz gets his board seat or not, Disney appears likely to rein in costs. But what it and streaming rivals will need long term is to figure out how to charge more for less, without chasing off subscribers who’ve never had more entertainment choices, or a simpler time switching among them. No easy task.

 

[wabbott]

https://www.cnbc.com/2023/01/14/a-b...brews-heres-how-the-situation-may-unfold.html

Opinion - Activist Spotlight

A battle between Disney and activist Peltz brews. Here’s how the situation may unfold​

Published Sat, Jan 14 20238:16 AM EST
Kenneth Squire@13DMonitor


Activist investor Nelson Peltz plans to mount a proxy fight for a seat on Disney’s board.
Disney offered Peltz, founding partner of Trian Fund Management, a role as a board observer and asked him to sign a standstill agreement, which Peltz declined. Here are our thoughts on the situation.

Offer of a board observer position​

Sometimes a board observer position can be beneficial, particularly for investors who do not have a lot of board experience and are less likely to be a regular contributor to board discussions. But offering Peltz a position as a board observer is like saying to Whitney Houston, “You can join the band, but you are not allowed to sing.” There is no way that Disney thought for a second that Peltz would accept this offer, and there is no way he should have accepted it.

Why is this happening?​

It is curious as to why Peltz started this proxy fight in the first place and why Disney is resisting it. Peltz acquired his position when Bob Chapek was CEO and likely had a plan to replace him with someone Peltz had already identified. That would have been a great activist plan, but it went awry a week later when Disney announced that it had replaced him with former CEO Bob Iger. Knowing Trian’s history and process, the firm had probably been working on that plan for many months and was waiting for the perfect time to build its position. It is unfortunate that all of Trian’s hard work developing its plan somewhat went to naught, but at that time the firm should have regrouped and developed a different approach taking into account the new circumstances. That plan should not have included opposition to Iger. While Trian says it is not opposing Iger as CEO now, the firm initially opposed him and that made it very hard for the board to agree to a settlement for a board seat for Peltz. Having said that, a strong board with a strong CEO – who is admittedly a short-term CEO – should not have a problem with an experienced shareholder in the room who might have an unpopular opinion. In fact, the board should welcome it.

Trian’s claims​

Trian put out a presentation making its case. In proxy fight presentations, each side uses the facts and data to paint a picture that benefits them and often those claims do not withstand scrutiny. For example, Trian takes issue with Disney’s total shareholder return under Iger: 270% versus 330% for the S&P 500
over the same time. I am not sure how that compares to the industry, but I expect if the industry returns were more favorable to Trian, they would have used those. As the British economist Ronald Coase had said: “If you torture the data long enough, it will confess to anything.” In this case, we can get it to say that Bob Iger was a bad CEO for Disney. Trian also takes issue with Iger’s decision to acquire Fox, and he should – it was a terrible decision in retrospect. But he should also include in that analysis, Iger’s decisions to acquire Pixar, Marvel and Lucasfilm, which have grossed Disney more than $33.8 billion at the global box office, and billions more in merchandise and theme park extensions.

Nelson Peltz as a director​

All this criticism of proxy fight tactics and strategy aside, and regardless of how we torture the data of Peltz’s record as a director, of course he should be on the board of Disney. He is a large shareholder with a strong track record of creating value through operational, strategic and capital allocation decisions. No, Peltz is not going to be the most valuable director when it comes to deciding who should star in the next blockbuster Disney movie or which rides should be built at the entertainment parks – the board relies on management for those insights. But he will be the most prepared and valuable board member when it comes to doing the financial analysis on the various strategic and capital allocation opportunities available to Disney and advising the board on which decisions would be best for shareholders. Peltz also has proven to be a valuable director in helping management teams cut operating costs and improve margins, something Disney could use. And if his past is any indication, at the end of his term he will probably be good friends with Bob Iger.

Chance of winning​

Unfortunately, I think the deck is stacked against Peltz here. It is a herculean effort to get large institutional investors to vote against the board of an iconic company like Disney. That task becomes even harder when the company has just removed its CEO and replaced him with a respected prior CEO and replaced its chairperson. Adding to that, Disney recently settled with another top-tier activist, Third Point, which had a lot of the same suggestions Trian is making. I believe that Institutional Shareholder Services and large institutional shareholders are going to want to give this new team at least a year to work on their plan before supporting more change at the company. And I do not think the universal proxy is going to make that much of a difference in a proxy fight for one director on a unitary board. However, having said that, while I do not own any Disney shares in my fund, my 10 year old and 12 year old have a small amount of shares and when their ballots come in the mail, we will be voting for Nelson.

Ken Squire is the founder and president of 13D Monitor, an institutional research service on shareholder activism, and he is the founder and portfolio manager of the 13D Activist Fund, a mutual fund that invests in a portfolio of activist 13D investments. Squire is also the creator of the AESG™ investment category, an activist investment style focused on improving ESG practices of portfolio companies.

 

[wabbott]

https://deadline.com/2023/01/disney...z-activist-investor-plan-bob-iger-1235221450/

Disney Proxy Battle: Who Is Nelson Peltz And Why Does He Want To Be Let Into The Magic Kingdom?By Dade Hayes, Jill Goldsmith
January 14, 2023 8:00am

Nelson Peltz’s broadside against the Walt Disney Co., and the prospect of a rare proxy fight at the media giant, stunned media circles this week — and a flurry of SEC filings over the past few days suggest plenty more fireworks to come.

The activist investor’s demand for a seat on the company’s board and criticism of management have drawn the full attention of a Wall Street already on tenterhooks about how returned CEO Bob Iger will right the ship. The famed exec’s encore run as Disney’s chief already faces a series of challenges, some industrywide, others self-inflicted.

Peltz isn’t quite a household name, at least in the entertainment world (though his actor and entrepreneur children have brought him into the Beckham and Selena Gomez orbit). Even so, he could play a significant role in the company’s direction — certainly if he manages to persuade other shareholders to vote him onto the board.

Activists tend to be brash, outspoken veterans of the Street, with no shortage of confidence that their vision trumps management’s. Perhaps the best-known in media circles is Carl Icahn, who tangled with Time Warner and Lionsgate. Third Point hedge fund chief Daniel Loeb drew fire from George Clooney during a clash with Sony and, more recently, delivered former Disney CEO Bob Chapek a list of demands like spinning off ESPN before eventually retreating. Elliot Management has been known to get personal, demanding the ouster of AT&T chief John Stankey and his former boss, Randall Stephenson, atop a list of grievances.

By comparison, Peltz’s objectives are more straightforward, and he claims to be supportive of current management. He and his investment firm, Trian Partners, are not contesting Iger’s CEO role or the current configuration of the company. Rather, they lament its stumbles and sagging stock price given its potent asset mix, seeing themselves as offering “new perspective to improve performance.”

Trian fired its initial salvo Wednesday in an overview it called “Restore The Magic,” where it announced Peltz would be running for a seat on Disney’s board of directors. His candidacy is in opposition to the company’s proposed slate of directors, which includes new board chairman Mark Parker. Shareholders will vote on directors at the annual meeting, usually held in March. Trian has since put out a stream of follow-up information, including a slide deck and chronicles of its overtures and meetings with various Disney reps. Because it’s germane to Disney’s governance as a public company, the communiqués are filed with the SEC. Trian has been pointing investors to a continuously updated website dedicated to the effort to turn around Disney, RestoreTheMagic.com. In a filing Friday, it said it had received “numerous inquiries and expressions of support from shareholders.”

Disney hasn’t released its proxy filing yet for the latest fiscal year, which ended last October 1. The proxy is where it would set the date for the annual meeting and list its own slate of directors, as well as opposition candidates. The filing will also contain other proposals to be voted on, including from outside shareholders — and Trianon has few. The meeting should be pretty eventful. They usually are: Last year, then-CEO Bob Chapek came out publicly for the first time against Florida’s so-called “Don’t Say Gay” bill, which was signed into law days later.

Trian aside, Iger still faces a host of challenges amid a fast-changing media landscape. Chapek was abruptly ousted in November and the succession question is ongoing. Iger has a two-year contract. Parker, who is also executive chairman at Nike, is now steering the Disney board. He replaced Susan Arnold because, Disney explained, she has reached the 15-year mark as a board member, the maximum stint permitted under company bylaws.

Trian seems to be saying the quiet part out loud. In a CNBC interview, Peltz likened Disney to Communist China, and said its $71.3 billion acquisition of most of 21st Century Fox in 2019 put the company “through the wringer” financially. That massive M&A deal, a cornerstone of the company’s headlong rush into direct-to-consumer streaming, contributed to wiping out the dividend, Peltz maintains, a 57-year fixture relied on by the company’s many retail investors. Disney (and others) scrapped their dividends to conserve cash during the pandemic and hasn’t reinstituted it yet.

A spicy passage in one SEC filing details a full tick-tock from Trian’s point of view. Peltz spoke with Chapek when the executive was still CEO last summer, the filing says, when he launched his critique of the company and made known his desire to sit on the board. Over subsequent months, Chapek’s ouster and a looming deadline for when new board members could be added to the ballot ahead of the shareholders’ vote complicated the dialogue. Just before Christmas, Iger called Peltz to tell him a virtual meeting was being scheduled but that it was unlikely to occur before January 6 “due to Mr. Iger’s plans to sail his yacht off the coast of New Zealand.”

A meeting was finally put on the books for last week.

The Disney episode has followed a familiar playbook for Peltz, whose board activities have earned him considerable attention in financial circles since Trian’s founding in 2005. He is currently non-executive chairman of The Wendy’s Corp. and sits on the boards of Unilever and Madison Square Garden Sports Corp., the parent of the New York Knicks and Rangers. The Brooklyn-born Peltz, 80, is a hockey fan and a friend of MSG chief James Dolan and has a personal investment in MSG. Previous board stints have included Procter & Gamble, HJ Heinz and Sysco. Consumer products, not media, have generally been Peltz’s wheelhouse.

Trian owns a stake worth nearly $1 billion in Disney, but given the media company’s size, that means the position is only about half of one percent. While that modest stake and Peltz’s relative lack of media experience have put off some Wall Streeters, Trian’s counter is that they are seeking only one board seat and that Peltz’s consumer experience is a match for Disney’s considerable footprint across theme parks and merchandise.

Shares in Disney, which have touched an eight-year low in recent weeks and badly underperformed the S&P 500 and many media peers, initially responded well to Peltz stirring the pot, rising more than 3% on Thursday. On Friday, though, they slipped a fraction of a point to close at $99.40.

Iger already had his work cut out for him given the uncertainty in the theatrical movie business, the negative momentum of the pay-TV business, and other headwinds. While he has moved quickly to undo some of Chapek’s moves, he is also the one who put Chapek in charge in the first place. It’s a decision many observers both inside and outside the Burbank company still can’t square with Iger’s storied run as CEO from 2006 to 2020.

Wall Street analyst Michael Nathanson, who maintains a “buy” rating on Disney shares, wrote a note to clients Thursday to express support for Peltz’s intervention, though he hopes Iger will be allowed to execute his plans.

“While we think Trian is correct to identify these issues, we believe that given the change in leadership, the company will quickly move to drive better profitability,” he wrote.

“In our view, Disney’s underperformance relative to the S&P 500 is a combination of macro concerns (like slowing consumer spending and advertising slowdowns), pandemic fallout from park closures, post-pandemic structural headwinds like accelerated cord-cutting and lower box office attendance. The few self-inflicted moves also include the acquisition of 21st Century Fox, increasing the Disney+ TAM [total available market] in late 2020 (which forced the company to spend more on broader content offerings), and the decision to continue stepping up for cricket rights in India and nonprimary sports at ESPN.”

Nathanson pronounced himself “optimistic” overall that Iger will make “the difficult decisions that are consistent with Trian’s objectives.” Disney’s profitability over the long term, as a result, “will be higher now than under prior leadership.”

Disney hasn’t faced such shareholder dissent since the early aughts. Former Walt Disney directors Roy E. Disney and Stanley Gold raised hell at the 2004 annual meeting in a bitter fight to oust then-CEO Michael Eisner. Shareholders at that meeting delivered a shocking 45% no-confidence vote against Eisner, who was stripped of the chairman’s title. Disney and Gold also threatened a proxy fight to seat an opposition slate of directors at the next annual meeting but backed down. Iger, an ABC and Disney lifer, eventually emerged from the tumult to become the company’s CEO.

 

[Cfabar1]

I had not realized (though it has been mentioned) until reading the CNBC article distilled it so clearly, that Peltz had started this mess under Chapek. He may feel like he “has to” continue this now. It is very odd to say “I disagree with everything the CEO did, but I support his 2 year stint”.

 

[wabbott]

I had not realized (though it has been mentioned) until reading the CNBC article distilled it so clearly, that Peltz had started this mess under Chapek. He may feel like he “has to” continue this now. It is very odd to say “I disagree with everything the CEO did, but I support his 2 year stint”.

Used to, they called folks like Peltz "corporate raiders" or "greenmailers." Remember the "greed is good" speech in Wall Street?

"Altogether, these guys sitting up there own a total of less than 3% and where does Mr. Cromwell put his million dollar salary? Certainly not in Teldar stock, he owns less than 1%. You own Teldar Paper, the stockholders, and you are being royally screwed by these bureaucrats with their steak lunches, golf and hunting trips, corporate jets, and golden parachutes! Teldar Paper has 33 different vice presidents each earning over $200,000 a year. I spent two months analyzing what these guys did and I still can't figure it out."

Not a whole lot different from what Peltz is saying. Peltz looks for a company that has a valuable brand but is not being efficiently run, puts money up, tries to figure out where is the waste and inefficiency, and if successful, sells the stock at a higher price.

Greed Is Good (1987) HD

 

[Jcruise86]

Here's an interesting look at the castle intrigue at Disney surrounding the upcoming shareholder vote:

As long a I'm here, I'd like Iger (Chapek 1.0) to be replaced ASAP. He's supposed to find his replacement to take his place within 22 months, but his history is to find someone who is not as good, and then the board goes with him and his "awesome experience, "youthful energy," and "superb communication skills" that were born when he was a local TV weatherman.

Iger's overpayment for Fox may have been the worst mistake in Disney history, and the Iger/Chapek descent into the Disney+ streaming money pit may have been the second worst blunder in Disney history.

 

[RivShore]

Iger's overpayment for Fox may have been the worst mistake in Disney history, and the Iger/Chapek descent into the Disney+ streaming money pit may have been the second worst blunder in Disney history.

I hated the big money spent on Fox but am slowly coming around to a contrarian view. So, before we can conclude that it was the worst mistake in history, we have to look at what would have happened if they did not spend that money:

If Comcast bought it instead, all that Fox IP it would have created a much more formidable competitor that could have damaged Disney for decades to come. They are a direct competitor in movies, TV, streaming, and parks and this would have handed them valuable IP to fuel all those operations. It would have handed a controlling stake in Hulu, at the time the second largest streamer, it would have handed them a good chunk of Marvel IP, busting apart a universe Disney really wanted full control over, they would have had control over Avatar, again something Disney is heavily invested in and who's future would now be in a competitors control. Gaining all that control and related IP may have been worth the risk. Only time will tell.

As for streaming, the alternative would have been sticking with Netflix and I don't think they wanted to to feed that beast anymore and have their family shows and movies showing up alongside Dahmer and worse. Yes, D+ became way too much of a money pit but the entire industry went down that road so the problem is not unique. I always thought keeping it focused and selling it to families for the library access made the most sense, hey family x, you used to spend a $100 a year on 4 or 5 Disney DVD's, now you can get access to thousands of hours for that same annual cost. Some kind of shakeout is coming soon to the streaming industry but I think its safe to say D+ will one of the ones left standing. Again, way too soon to deem the 2nd largest streamer in the world a failure.

And blaming just the Fox buy for a damaged balance sheet is ignoring that "little" pandemic we had and all the investments in D+.

 

[wabbott]

Some new perspective here.

https://www.ft.com/content/2fe0f5b3-28e8-4163-a5f7-f0f2af3ed0e4

Disney activist Nelson Peltz faces questions over Trian’s record The veteran investor has to convince other shareholders that he deserves a seat on the board Nelson Peltz is set to take on Disney, after his bitter campaign at Procter & Gamble in 2017. He has directorships at fast-food group Wendy’s and consumer goods maker Unilever

Ortenca Aliaj, Adrienne Klasa, James Fontanella-Khan and Sara Germano
1/13/2023

At the start of this week, Nelson Peltz attended the birthday of his daughter Nicola Peltz Beckham in Los Angeles, a star-studded affair in which the activist investor was pictured rubbing shoulders with the former Disney actress Selena Gomez. It was not his only date with the Hollywood elite. On Tuesday, Peltz addressed Disney executives including chief executive Bob Iger with a plan to reshape the entertainment group, reinstate its dividend and repair what he describes as a “broken” succession plan.

Peltz is set to take on Disney in the most high-profile proxy battle in years as he seeks shareholder support for a board seat. The co-founder of Trian Fund Management has been on a media blitz, comparing the company to communist China in a television interview with CNBC, setting the tone for a protracted and bitter fight.

Proxy battles are costly affairs with both sides spending millions of dollars to win shareholder support. They also tend to involve aggressive media campaigns and lots of mud slinging.

Peltz is no ingenu. This will be his fourth proxy battle since he founded Trian in 2005 with his son-in-law and chief investment officer Ed Garden and the company’s president, Peter May. The 80-year-old investor, who has built a reputation for overhauling consumer goods businesses, can be a ruthless opponent, say people who know him. “He always starts by crushing management and humiliating them publicly as he did today on CNBC. Then he usually gets what he wants — in this case, a seat at the table,” said a second person who has worked with Peltz.

“Finally, he becomes friends with them.” Cast members sit on a ride at Disneyland in Hong Kong Hong Kong’s Disneyland: Peltz compared Disney to communist China in a television interview with CNBC © Anthony Wallace/AFP via Getty Images

That was the case for Peltz’s first boardroom tussle against HJ Heinz in 2006. The activist sought five seats on the company’s board after it rejected his turnround plan, claiming its chief executive William Johnson had mismanaged the company. Peltz eventually won two board seats, including one for himself, and said at the time that he and Johnson would “smoke the peace pipe” and learn to work together. He remained a director until 2013 when the business was bought by Berkshire Hathaway and 3G Capital for $28bn, a significant uplift for investors.

Former Heinz board members would later vouch for Peltz in other proxy fights, including his bitter campaign at Procter & Gamble. The 2017 battle has become the stuff of legend on Wall Street. Peltz claims the US consumer goods group spent more than $100mn to keep him off the board in what he has called “the dumbest thing” he has ever been involved in.

The activist emerged victorious and his tenure on P&G’s board has largely been viewed as a success, with the company’s share price increasing more than 50 per cent. But it has helped crown Peltz as a consumer goods whizz, a label that is unhelpful for the Disney fight. “[He] is a genius when it comes to consumer companies, but whenever he ventures out his record isn’t as stellar,” a person close to the investor said.

The Brooklyn-born investor faced a setback at DuPont in 2015 when the company managed to fend off his boardroom challenge, winning support from three of its largest shareholders and retail investors. The chemical goods group had offered Trian a board seat, but said Peltz himself could not be the nominee, citing a lack of scientific expertise. Peltz faces similar challenges at Disney, which has seized on his lack of experience in the media business. “It’s just about him and his ego,” said one person close to the company.

As usual with him, you know, there’s always some kernel of truth, and there’s always some level of ********.” Some Disney shareholders also think Peltz is not the right person to join the board. “In our view should someone with half a per cent position who has held the shares for three months, should they get a board seat?” said Dev Chakrabarti, chief investment officer for concentrated global growth at AllianceBernstein, a top-20 investor.

“His record in the consumer space is overall good,” Chakrabarti said, “but we don’t view him as a media operator.” Peltz has rejected the idea that he is just a consumer goods guy, pointing to previous investments in Lionsgate, Time Warner and Comcast, though he was not a board director at any of these companies. Peltz has at times come under pressure from his own investors over Trian’s performance, which has been mixed. The fund ended 2022 down 10 per cent, according to people who have seen the numbers, compared with a 19 per cent decline in the S&P 500.

Trian’s biggest failure has been at General Electric, which one investor described as a “disaster”. Trian amassed a $2.5bn stake in the industrials group in October 2015 when its shares were trading at about $25. It predicted that GE’s stock price would almost double by the end of 2017 as it pushed for cost reductions and share buybacks. Three years later, however, Trian’s stake was worth about a quarter of its original value and dragged heavily on returns.

Should Peltz be successful in gaining a board seat at Disney, he would add to his current directorships at fast-food group Wendy’s, consumer goods maker Unilever and Madison Square Garden Sports, the holding company for the New York Knicks and Rangers sports teams, in which he has a personal stake.* A longtime hockey fan and friend of MSG owner James Dolan, Peltz would have an unusual perch into both the media and team-level operations in the world of sport.

All told, Peltz is widely considered to be a fairly constructive activist investor, according to people who have found themselves on the other side of the negotiating table. “We had some huge fights in the past but ultimately he’s focused on improving things and is reasonable behind closed doors,” said a person who had in the past advised a company targeted by Peltz.

“He wants to be listened to and taken seriously, he’s not arrogant at all.” Trian’s website is full of testimonials from former boardroom adversaries. Johnson, the former CEO of HJ Heinz, who fought against having Peltz on the board later said he had been impressed by the investor. For his part, Peltz says he wants to roll up his sleeves and help Disney. “My background is not staring at a Bloomberg screen,” he told the Financial Times. “My background is running businesses.”

*This article has been amended to clarify that Peltz no longer has a board seat at Janus Henderson

 

[wabbott]

https://variety.com/2023/film/box-o...tone-nears-spider-man-no-way-home-1235489978/

Jan 15, 2023 9:39am PT
‘Avatar: The Way of Water’ Sails to $1.89 Billion Globally, Nearing ‘Spider-Man: No Way Home’ on All-Time Box Office Charts
By Rebecca Rubin

James Cameron’s sci-fi blockbuster “Avatar: The Way of Water” is close to overtaking another box office behemoth, “Spider-Man: No Way Home,” on the all-time charts.

As of Sunday, “The Way of Water” has grossed $1.893 billion globally, standing as the seventh-highest grossing movie in history. With those ticket sales, Disney and 20th Century’s futuristic sequel is roughly $22 million away from beating Sony’s latest Spidey adventure and its mighty $1.91 billion global haul. “Avatar 2” should cross that threshold to become the sixth-biggest movie ever in the coming days.

By way of ticket sales, “The Way of Water” has generated $563 million in North America and $1.3 billion internationally after five weeks of release. It’s the 13th highest-grossing movie at the domestic box office, passing “The Lion King” ($543.6 million), “The Dark Knight” ($535 million) and “Rogue One: A Star Wars Story” ($533.5 million).

Overseas, the movie ranks as the fifth-highest grossing release ever, behind only the original “Avatar,” “Avengers:
Endgame,” “Titanic” and “Avengers: Infinity War.” Yet, it’s tantalizingly close to dethroning “Infinity War,” which remains in fourth place with $1.370 billion.

Outside of North America, the top-grossing territories include China ($211.8 million), France ($120.5 million), Germany ($106.9 million) and Korea ($92.7 million). Not every market is re-connecting with the Na’vi. The follow-up isn’t playing in Russia, where the original grossed $116 million, and it’s floundering in Japan with $26 million, a huge drop from the first film, which generated $176 million in the country.

At this pace, “Avatar 2” is close to crossing $2 billion worldwide, a nearly impossible benchmark in COVID times. Even “No Way Home” fell just shy of that particular milestone; the superhero sequel didn’t play in China, which is a major market for Marvel movies. Only five movies in history — “Avatar,” “Avengers: Endgame,” “Titanic,” “Star Wars: The Force Awakens” and “Avengers: Infinity War” — have surpassed $2 billion. When “The Way of Water” joins the club, Cameron will have directed two of the six biggest movies of all time.

The long-delayed sequel to 2009’s “Avatar” has thrived in theaters since opening in December with $134 million in North America and $435 million globally. It cost roughly $460 million to make and market, resulting in one of the most expensive films ever.