Disney's Strategic Initiatives and Shareholder Support Solidify Position Amid Activist Investor Challenge

Disney's strategic moves under CEO Bob Iger thwart Nelson Peltz, securing shareholder support and launching new ventures.

By Alex P. Chase

4/3, 21:31 EDT
Walt Disney Company

Key Takeaway

  • Bob Iger's strategic initiatives, including cost-cutting and new ventures in sports-streaming, solidify Disney's position against activist investor Nelson Peltz.
  • Disney shareholders back Iger, with a significant vote against Peltz's director bid, showing strong support for current leadership and strategy.
  • Disney announces major moves like a $1.5 billion investment in Epic Games and a sports streaming venture with Fox and Warner, adapting to digital shifts.

Strategic Initiatives

Bob Iger, CEO of Disney, launched a series of strategic initiatives aimed at setting Disney's businesses on a steady footing and countering the campaign of activist investor Nelson Peltz. These initiatives included cost-cutting measures, new ventures in sports-streaming, and exploring the sale of some TV networks. Colin Ruegsegger, a senior analyst with proxy adviser Glass Lewis, noted that Disney's actions addressed investor concerns effectively, demonstrating a proactive approach to the company's challenges. The initiatives were part of a broader strategy to rejuvenate Disney's various divisions, including entertainment, experiences, and sports, with each division developing plans to reinvent or bolster their businesses.

Shareholder Support

In a significant corporate showdown, Disney shareholders voted to elect the company's entire slate of 12 board nominees, rejecting Peltz's bid to become a director. This victory for Iger underscored the effectiveness of Disney's strategic initiatives and the support from high-profile endorsements, including descendants of Walt Disney, George Lucas, Michael Eisner, and Jamie Dimon. Despite Peltz receiving 31% of votes cast, indicating some investor frustrations, the majority support for Disney's board nominees highlighted confidence in the company's direction under Iger's leadership.

Strategic Review and Partnerships

Disney engaged in a strategic review of its TV networks and explored significant partnerships and investments. This included reigniting discussions about adding some channels to its venture with Hearst and taking a $1.5 billion equity stake in Epic Games to launch a Disney-themed universe in "Fortnite." Additionally, Disney announced a sequel to "Moana" and a leadership shake-up in its live-action movie studio. These moves were part of Disney's efforts to adapt to changing industry dynamics, particularly the shift towards streaming and digital entertainment.

Sports Streaming Venture

Disney, along with Fox and Warner, announced a venture to bundle live sports content, marking a significant shift in the sports media industry. This venture aims to cover high costs and keep leagues on board while addressing the decline of traditional cable packages. The planned service, expected to launch in the fall, will carry 14 networks and feature a wide range of sports. The collaboration between these media giants represents a strategic response to the challenges of transitioning sports broadcasting to the streaming economy.

Management Quotes

  • Bob Iger, CEO of Disney:

    "We’re eager to focus 100% of our attention on our most important priorities: growth and value creation for our shareholders and creative excellence for our consumers."

Street Views

  • Colin Ruegsegger, Glass Lewis (Neutral on Disney):

    "Iger and the board took an appropriately sober assessment of the company’s failings, and launched a series of initiatives that seemed to address the things that all investors were concerned about... It was evident that they were picking up steam."