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The Sharks Are Circling as Iger Looks for a Way Out

Peltz/Perlmutter team up for Disney Changes
Disney CEO Bob Iger. Credit: Village Global Flickr.

“Keep your friends close and your enemies closer.” It’s the quintessential advice from The Godfather. This advice holds true in most walks of life, but none more so than in the business world. You must always know what your competitors are up to and when they may be coming after you. This is a lesson that Disney CEO Bob Iger either forgot or hubris told him to ignore simply. For whatever reason, Iger chose to ignore Vito Corleone, and it is now coming back to bite him.

Time for Iger to fix Disney

Bob Iger has a lot on his mind. Credit: Gage Skidmore, Flickr/ Disney

Related: He’s Back! Billionaire Investor Wants a Seat at the Disney Table

Earlier this year, billionaire investor Nelson Peltz tried to gain a seat on the Walt Disney Company’s Board of Directors. Eventually, he gave up his proxy battle when Iger decided to eliminate 7,000 employees and save the company more than $5.5 billion in the process. But Peltz was looking for Disney to return the dividend to shareholders. Iger was successfully able to defuse that situation earlier this year, but now Peltz is back, and he owns even more of the Walt Disney Company, and he now has more ammunition to work with.

During the layoffs, Iger decided to purge the Disney Company of anything and anyone that former CEO Bob Chapek laid hands on. Iger eliminated the entire meta division from the company, Chapek’s brainchild. But Iger also decided to fire Marvel Chairman Isaac Perlmutter. It was Perlmutter who sold Marvel to Disney in 2009. Part of that deal gave him $2.4 billion in Disney stock.

But now he’s back and formed an alliance with Peltz. The Wall Street Journal reports that Perlmutter reached a deal with Peltz’s Trian Fund Management, giving it control and voting power over his shares.

Perlmutter told the Journal:

While I was a Disney employee, I was not comfortable publicly stating my views on the company and its performance. As someone with a large economic interest in Disney’s success, I can no longer watch the business underachieve its great potential.

When Peltz launched his proxy battle earlier his year, he owned more than nine million Disney shares. Today, with Perlmutter’s share, Peltz and Trian now control 33 million company shares.

bob iger ruining disney

Credit: Disney

Trian is expected to ask for multiple seats on Disney’s Board of Directors, and Perlmutter said that he plans on encouraging Disney to accept Trian’s nominees. The nomination window for new Board members doesn’t open until December.

Peltz sought drastic changes to Disney last time, and this fight will be no different. Bob Iger was able to reorganize the company and save billions last time, but Peltz wants more now. According to reports, he not only wants the seats on Disney’s Board but also a clear succession plan for when Iger’s contract is up at the end of 2026.

Iger's announcement leaves Wall Street wonder where he's getting the money

Disney CEO Bob Iger Credit: Disney

Trian is also famous for stripping companies of their underperforming assets, and the Walt Disney Company has plenty of those. Iger has been public about his desire to eliminate the company’s over-the-air television networks like ABC, National Geographic, and Disney Junior. One of Peltz’s demands may be to accept the $10 billion offer Disney received for ABC. Disney must also decide what to do with ESPN. The network is still a moneymaker for Disney, but it is not ready to be taken to a streaming-only platform.

Perhaps a board seat will satisfy activist investor Nelson Peltz this time around, but Disney executives better prepare themselves for a significant shakeup now that he has more power. If Disney shares continue to fall, it will only further empower Peltz and Perlmutter to continue their fight for the future of the Walt Disney Co.

We will continue to update this story at Disney Fanatic.

About Rick

Rick is an avid Disney fan. He first went to Disney World in 1986 with his parents and has been hooked ever since. Rick is married to another Disney fan and is in the process of turning his two children into fans as well. When he is not creating new Disney adventures, he loves to watch the New York Yankees and hang out with his dog, Buster. In the fall, you will catch him cheering for his beloved NY Giants.

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