In the recent proxy fight, Bob Iger emerged victorious. However, Disney’s troubles remain potentially debilitating.
Disney’s CEO Bob Iger emerged victorious from a month-long proxy fight within the company’s board. Disney held its annual shareholder meeting on Wednesday, with shareholder votes coming in until 23:59.
This year’s vote was particularly consequential for Disney, as advisory shareholder Nelson Peltz attempted a coup against Iger. Peltz is the billionaire CEO of Trian Partners, fighting for months to obtain a board seat in Disney.
In the weeks coming to the vote, it became increasingly clear Peltz would fail. Disney’s major shareholders, including BlackRock and George Lucas, all sided with Iger and the current board.
If successful, Peltz intended to bring Disney into a whole new direction. Since the pandemic, Disney has faced several hurdles and is still struggling in a fast-changing entertainment sector.
Disney+, the firm’s flagship streaming service, has yet to turn a profit 4 years after its launch. Its slate of theatrical releases was similarly unsuccessful, with several box office failures in a row.
Peltz argued it was the company’s failing leadership that caused the company to lose ground against the fierce competition. In 2022, Disney went through a chaotic succession battle, with former CEO Bob Chapek ousted in favor of Bob Iger, who was forced to come back from retirement.
Iger’s term is set to expire in 2026. Peltz argued that Iger’s iron fist created a complacent board, unable to guide the company through difficult times. The board, however, did not agree.
Powering ahead
With the fight now over, Disney freed itself of a major distraction. In his latest investor call, Iger promised to make streaming profitable by 2025 thanks to crucial strategic partnerships.
Specifically, Iger plans to integrate ESPN, a sports-streaming service, into Disney+. The company also announced the streaming distribution of Taylor Swift’s “The Ears Tour”, one of the major box office hits of 2023.
The market rewarded Iger for his aggressive strategy, with Disney’s stock rising almost 30% year-to-date. Some analysts believed Peltz’s fight caused the positive stock performance, but yesterday’s 0.67% jump suggests the opposite.
“The market is reacting to how this company is performing, it was not reacting, really, to the activist fight,” Iger said in a CNBC interview.
In any case, Disney’s future, much like that of the entire entertainment sector, remains uncertain.
Every major platform, including Netflix and Disney+, is trying to find a balance between theatrical and streaming releases. Whether they succeed is all up to the future.
