Too Big To Succeed: Disney’s Future Will Be As Three Separate Companies

The Walt Disney Company has their hands in a little bit of everything. The company is just so vast that it’s virtually impossible to find one person who could take over for Disney CEO Bob Iger. No one has the right kind of experience.

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About a year ago, Iger came to this same realization and, in an attempt to streamline the company, divided it into three separate divisions: Disney Entertainment, Disney Parks, and ESPN. It would allow each division to have its own head, but the downside was that neither of them would gain enough experience to ever take over for Iger.

But now, the Walt Disney Company finds itself in the middle of not one but two proxy battles for seats on its Board of Directors, and one of those battles could end with Disney being broken up into three separate companies, each being publically traded.

Nelson Peltz and his Trian Capital were the first to launch a proxy battle. Peltz is seeking two seats on Disney’s Board, including one for himself.

But another investor has filed a proxy statement with the SEC, urging fellow investors to elect its three candidates for the Disney Board. But unlike Peltz, Blackwells Capital has offered a plan to fix the Walt Disney Company.

Blackwells said in its filing:

The purpose of our campaign is simple: we want to ensure that Disney has the right collection of minds around the boardroom table, working constructively together to make decisions that will benefit ALL shareholders for decades to come. Disney may simply be too complex for any one successor to Mr. Iger to manage holistically, and Blackwells believes that it is the responsibility of the Board to oversee these types of analyses in the ordinary course.

Blackwells nominated Jessica Schell, Craig Hatkoff, and Leah Solivan to the Disney Board. Schell is a longtime executive at Disney’s rival, Warner Bros Home Entertainment, Solivan is the founder of Task Rabbit and an expert in AR and VR, and Hatkoff is a New York real estate executive.

While Blackwells did not formally discuss what its three companies would be, its nominations to the Board hint at the three entities. Blackwells did say that it wanted Disney to spin off its “real estate” holdings into one of the companies. That would be Hatkoff’s area of expertise. The Walt Disney Company owns thousands of acres of property at Walt Disney World and the Disneyland Resort but has never looked at its theme parks as “real estate.”

Schell would be brought into Disney Entertainment to help with streaming profits and Disney’s new streaming service bundle of Hulu, Disney Plus, and ESPN Plus. Solivan might bring Disney’s streaming platforms into the virtual world as Bob Iger has done with Apple but on a larger scale.

Peltz’s Trian and Blackwells agree that Disney must immediately increase revenue to boost Disney stock and appease a hungry Wall Street. But Blackwells does not find itself in as strong a position as Trian. Blackwells only owns $15 million in Disney, while Trian owns $3 billion or 1.8 percent of the company.

This will come to a head on April 3 at Disney’s Annual Shareholders meeting.

What do you think of Blackwells’ plan to fix Disney? Let us know in the comments.