More Good News Bob… Ready?
As bad as November was for Bob Iger, December has been so much worse.
Yesterday the Reedy Creek Improvement District was read into the record, this is now a public document anyone can read. The investigations in Florida are already underway.
Whether the Fed will do anything about a company so thoroughly connected to the Democratic party is another question. I am doubtful but it can do nothing about Florida’s investigations and once those convictions start coming in, it will be facing a credibility problem even the Federal government will find difficult to ignore.
However, Iger’s biggest problem is immediate survival. The odds of that just took another hit. Ancora Holdings Group has joined Nelson Peltz’s campaign.
And has done so with quite the opening broadside.
“Fellow Shareholders,
Ancora is a shareholder of Disney because its brand, entertainment assets and media holdings can underpin sustained value creation for decades to come. We believe Disney is saying the right things about restructuring and transforming the enterprise. Nonetheless, the addition of a shareholder representative or investor-designated directors to the Board can help ensure that these efforts are carried out in the most effective way. In an effort to avert an election contest following a year of distractions and disappointing performance, we hope you join us in encouraging the Board to pursue a viable compromise with Trian Fund Management, L.P. and Nelson Peltz.
A degree of shareholder-driven change is certainly warranted in Disney’s boardroom following an extended period of absentminded governance, ineffective succession planning, polarizing actions and sustained value destruction. Many of Disney’s current directors and executives bear responsibility for lapses that have undermined the Company’s positioning in the exceedingly competitive and ever-changing entertainment world. While it has been argued that challenges largely stem from the tenure of Bob Chapek, the Board was in the driver’s seat before, during and after that time. The upshot is that Disney shareholders have incurred meaningful losses and the Company has dramatically underperformed the S&P 500 Media & Entertainment Index over various periods, including one-year, three-year and five-year horizons.
The Board’s stewardship issues have not only resulted in financial setbacks. By allowing Disney to devote shareholders’ resources to a number of politicized initiatives, the Board has overseen a deterioration of what was once the most unifying brand in the world. The Company is increasingly dividing – rather than delighting – a growing number of consumers. A recent Axios Harris Poll 100 revealed that Disney is now the fifth most polarizing brand in the world (right behind FTX).
Disney’s Board faces a number of pivotal decisions over the next 12 to 24 months as it rebuilds consumer trust and oversees a complex transformation that includes an optimization of the streaming segment, a direct-to-consumer pivot for ESPN, the evolution of the Company’s film studios and a growth plan for parks. The Board will also once again need to engage in critical succession planning. Having a sizable owner in the boardroom to bring the market’s perspective and serve as one of many voices would only benefit shareholders. While this type of director may not always be needed at Disney, we contend it is the right addition at this key moment in time.
In closing, we want to address what looks to be a self-serving publicity stunt on the part of Blackwells Capital LLC. The firm’s principal, Jason Aintabi, recently attacked Mr. Peltz’s efforts at Disney hours before reportedly launching a campaign at The Wendy’s Company, where Mr. Peltz is Chairman and the largest shareholder. We believe the record shows Mr. Aintabi is a publicity-seeking greenmailer with a questionable personal and business history.1 On the other hand, it is widely known that Mr. Peltz is a pioneer in shareholder activism, who has made billions of dollars over many decades for himself, his partners and fellow shareholders in the companies in which he has invested. Mr. Peltz (or a qualified designee) would make a fantastic addition to Disney’s Board.
Thank you for your consideration, and we wish Disney’s leadership the best as it pursues a multi-faceted turnaround of one of the world’s most iconic companies.”
If Bob Iger had just walked away in 2017 when he was supposed to, his legacy as the greatest CEO in the history of the Walt Disney Company would be untouchable. Now there is little question that he will be remembered as the man who destroyed the strongest brand in the world.
