He’s B-A-A-A-ACK!
Hollywood is shocked and aghast today. The whole business world has been left reeling by the news.
Nelson Peltz is launching another bid to get on the Walt Disney Company Board of Directors.
Who could have foreseen this?
Well, me for one.
I predicted this was coming several times this past year. #TheDarkHeraldWasRight
Peltz has literally tripled the amount of shares that his Trion Group controls. This makes Nelson Peltz about the fifth biggest stockholder in Disney. Given the price of Disney stock for the last few months it wasn’t exactly backbreaking.
When Peltz made his first bid to get on the board, Iger responded by surrendering to all of his demands completely. Or at least he gave lip service to them. All of the things like reducing the headcount, selling off assets that aren’t core to Disney, and restoring some kind of dividend were things that were going to have to happen anyway, (Iger couldn’t restore the dividend by the way).
However, Bob was determined to protect quite a few things, not core to Disney’s business model that his massive ego was invested in. Shanghai Disneyland is an asset that has no protection under Chinese law, if America and China get into a shooting war, it will be seized. The smart thing is to sell it now while it can still be sold. Iger would rather cut his own children’s throats than sell off Shanghai, to him it’s much the same thing. Iger will protect diversity, equity, and inclusivity programs, plus those that inflict them on Disney to the extent that he possibly can. Disney+ is an unmitigated failure and should be rolled into Hulu as a mere tab. Instead, Hulu is getting rolled into D+ with a view towards ending the Hulu service completely.
Of course, the biggest thing Bob Iger was determined to protect at all costs was his own job. Nelson Peltz had stated during his first campaign that he wasn’t seeking to terminate Iger but simply make sure that he follows the stated goal of retiring at the end of his three-year contract. The problem as Peltz absolutely knew at the time, is that Iger has no intention whatsoever of retiring at all.
Iger’s first retirement wasn’t all that voluntary. The purchase of Fox Studios was a disaster for Disney. At the initial asking price of $35 billion, it was still a very questionable idea, even if Disney+ had met expectations. There was no plan in place to do anything with its assets. Once purchased all productions were shut down, and most of the studio personnel were surplused. Disney has done absolutely nothing with Fox Studios.
At $35 billion it would have been a mistake, at $70 billion it was an unconscionable blunder. Or at least that was the attitude of the institutional investors. Iger got wind of it and decided to make a guy he thought would implement all of his orders like a good lieutenant the new CEO. Unfortunately, Bob Chapek actually wanted to run the company. This is one of the very few mistakes Bob Iger will admit to.
The Disney Board of Directors currently consists entirely of people Bob Iger has nominated. All of them have close personal relationships with Iger or his family members. In effect, there has been no corporate governance at Disney for years. Given how bad the stock price is, Iger had to be concerned about a shareholder shakeup of the BOD. Consequently, he locked in a contract extension well in advance of the next stockholder call.
This has, however, handed Nelson Peltz a very big stick with which to beat Bob Iger. On top of the extension is a codicil guaranteeing Iger’s position within the company as an advisor well past 2030.
Iger has demonstrated he has absolutely no use for anyone who wants his job. All of the best candidates to become CEO of Disney have discovered sooner or later they were unpromotable.
After what happened to Bob Chapek, no decent candidate will go near the job of CEO of the Walt Disney Company so long as Bob Iger is still at the company. It won’t matter if he’s the fucking janitor, he will undermine any CEO just by being in the building. Anyone with any kind of heartburn with a new policy change will run to Bob Iger behind the CEO’s back. And Iger will begin pulling strings because he can’t help himself.
Peltz knows this perfectly well. Bob Iger has put the Walt Disney Company in the position it’s in, he knows that too.
When Nelson Peltz made his first play, it was for a single board seat. A single board seat isn’t going to do any good in that environment and he knew it at the time. I suspect he also knew he wasn’t going to win that first round. This time he’s in a much stronger position and is requesting multiple board seats. The request has been made to the BOD. I’d be surprised if they approved it but unsurprised if they give only Nelson himself a seat. The BOD is in a very bad position for a fight on the floor, although I would find it vastly entertaining.
If they reject him completely there will be a major shakeup on the Disney BOD. I don’t know who he’s proposing yet but I’m really hoping one of them is Ike Perlmutter. That would be hilarious.
Shareholder Call will be on November 8th.
