Earlier this year, Disney fought off a proxy campaign by activist investor Nelson Peltz, who had acquired a large stake of over 30 million shares in the Walt Disney Company through his firm Trian Partners. He had wanted a seat on the board of directors, along with many other demands that Disney reinstate the dividend to stockholders, cut costs and return the magic to the company. He was unhappy with how much Disney paid for 20th Century Fox and how Disney’s succession plan to find the next CEO was “broken”, plus he has previously attacked cost inefficiencies in the streaming business.

According to the Wall Street Journal, Nelson Peltz has been taking advantage of the low stock price of the Walt Disney Company. He has managed to secure himself over $2.5 billion of Disney stock, which he wants to use to get himself on the board of directors, along with others from his company. A source stated that “Trian believes it’s now time to have a seat at the table” and that Disney’s shares are “significantly undervalued” and the board needs to be “more focused, aligned and accountable”.

Should Disney deny his request to join the board of directors, Trian could nominate directors that would be voted on at Disney’s next annual meeting, which is taking place next spring. The window for shareholder nominations runs from December 5th 2023 through January 4th 2023.

Since Disney fired former CEO Bob Chapek last year, resulting in the return of Bob Iger, Disney’s stock has continued to plummet in value and the company has been making changes to realign the company, including taking a major reassessment of its streaming business. This has resulted in some major cost-cutting, including laying off 7000 employees, and spreading out release dates for existing content.  Currently, the company is looking to potentially sell assets including part of ESPN, Star India and even some of its linear television channels. It is also looking to step back from the culture war, including pulling back from many lawsuits in Florida.

Nelsen is 81 years old and is a non-executive chairman of Wendy’s Company, Sysco, and The Madison Square Garden Company. He is also a former director of H.J. Heinz Company, Mondelēz International, and Ingersoll Rand. One of his daughters is the actress, Nicola Peltz, who previously starred in the Hulu/Star Original series, “Welcome To Chippendales” and is married to David & Victoria Beckham’s son, Romeo.

The Trian group is well known for encouraging major changes at the companies it buys large stakes in, to sell or break up underperforming divisions and to improve efficiency. This could indicate why Disney is being proactive in trying to organise its existing assets, especially in the linear business, which is declining. It’s likely that some of the moves could be underway to show they are already attempting to do many of the things Trian wants.

When Nelson Peltz originally tried to get onto the board, Disney responded by saying that it constantly refreshed its board with new members who have industry experience, and they argued that Peltz didn’t understand the media industry. While Peltz isn’t a fan of streaming, many within the industry see Disney as one of the only natural threats and competitors to Netflix, in terms of scope, especially once the purchase of Comcast’s stake in Hulu is completed and that content is added within Disney+.

Ultimately, this push by Nelson Peltz will be putting more pressure on Disney to get its act together, by taking a serious look at where the company is failing right now and making changes.  Many have already begun or taken place, by a company the size of Disney can’t just turn on a dime, it takes a long time to straighten the ship.

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Roger Palmer

Roger has been a Disney fan since he was a kid and this interest has grown over the years. He has visited Disney Parks around the globe and has a vast collection of Disney movies and collectibles. He is the owner of What's On Disney Plus & DisKingdom. Email: Roger@WhatsOnDisneyPlus.com Twitter: Twitter.com/RogPalmerUK Facebook: Facebook.com/rogpalmeruk

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