Disney Under Siege | The ‘Bob’ of It All | 3
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Deep Dive
Why did Nelson Peltz target Disney for a proxy battle?
Nelson Peltz saw an opportunity with Disney's beleaguered stock price in 2022, driven by high spending on streaming and internal CEO conflicts between Bob Chapek and Bob Iger. He aimed to increase his wealth by boosting the stock price, as he had done with other companies like Procter & Gamble and Wendy's.
What were the key reasons Disney resisted Nelson Peltz joining their board?
Disney resisted Peltz because he lacked entertainment industry expertise and didn't offer new ideas. Many of his proposals, like cutting streaming spending and reducing sequels, were already being implemented by Bob Iger. Additionally, his large personality and potential for public statements were seen as a distraction during a critical time for the company.
How did Bob Iger's return as CEO impact Disney's strategy in 2023?
Bob Iger's return in 2023 led to significant cost-cutting measures, including 7,000 layoffs and $7.5 billion in cutbacks. He focused on stabilizing Disney's streaming business, which had been losing money, and addressed structural issues within the company. His leadership also helped fend off Nelson Peltz's proxy battle.
What was the outcome of Nelson Peltz's second attempt to join Disney's board?
Nelson Peltz's second attempt to join Disney's board failed in 2024. Despite amassing a $2.5 billion stake in the company and gaining support from shareholder advisory firms, Disney's board voted to keep the old guard in place, citing Peltz's lack of value-added ideas and potential for distraction.
What challenges did Bob Chapek face as Disney's CEO?
Bob Chapek faced challenges due to the COVID-19 pandemic, which shut down Disney parks and theaters. He also struggled with internal conflicts, as Bob Iger remained involved in creative decisions, creating confusion about leadership. Chapek's tenure was marked by missteps, including public relations issues and a lack of clear direction, leading to his ousting after just two years.
What is the current state of Disney's streaming business?
Disney's streaming business turned a profit of $253 million in Q4 2024, up from a $150 million loss the previous year. This turnaround was driven by price hikes and cost-cutting measures. However, the linear TV business continues to decline, losing 7% of subscribers annually due to cord-cutting.
What is the speculation around Bob Iger's potential deal with Apple?
There is speculation that Bob Iger's final act as Disney CEO could involve a major deal with Apple, potentially merging Disney with a larger tech company. This aligns with Iger's reputation as a dealmaker, having orchestrated acquisitions of Pixar, Marvel, Star Wars, and Fox during his tenure.
How does Disney compare to its rivals in the streaming industry?
Disney is among the top global streaming players, with Disney+ available in 150 countries. Netflix leads in profitability and market cap, while Amazon has also succeeded globally. Disney's streaming business is now profitable, but it faces challenges from declining linear TV revenues and the need to transition ESPN to a direct-to-consumer model.
What is the future of media consolidation in Hollywood?
Media consolidation is expected to continue, with companies like Warner Bros. Discovery and Paramount Global undergoing significant changes. The next 18-24 months may see further mergers or acquisitions as studios struggle with declining cable revenues and the need to scale globally in streaming.
What lessons has Bob Iger learned from his previous succession attempts?
Bob Iger has learned that sticking around in a creative role after stepping down as CEO creates confusion and undermines his successor. He is now focused on a clean exit when his contract ends in 2026, aiming to avoid the mistakes of his previous transition, which left Bob Chapek set up to fail.
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