Disney Under Siege | The ‘Bob’ of It All | 3
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The recent boardroom battles at Disney were intense, to say the least. Plenty of large and powerful personalities competing for their seat at one of the most influential tables in the whole media industry. And although Disney CEO Bob Iger prevailed once again, the House of Mouse is still on shaky ground. For years now, the company's stock has had more ups and downs than a roller coaster at one of their flagship theme parks.

In 2023, the company pledged to cut 8,000 jobs as part of a $7.5 billion cost-cutting effort, which was supercharged by billionaire investor Nelson Peltz and his investment company, Tryon, when Peltz tried to take control of the Disney board. Now, as Bob Iger plans his final retreat from the Magic Kingdom in 2026, the board is tasked with finding his replacement while trying to avoid another Bob Chapek situation.

He was the person ousted from the position of CEO after just two years when the board begged Bob Iger to step back in. Here to unpack the recent news from Disney and beyond, Sean McNulty. He's a reporter at The Ankler where he covers the business of Hollywood. His newsletter, The Wake Up, shares commentary and analysis on the latest topics and trends in the entertainment world. Sean also co-hosts The Ankler podcast where he's covered Disney and its CEO shakeups at length.

And today, Sean's taking us deeper into the fallout of these proxy battles and exploring what a Disney without Bob Iger might look like. All that's coming up.

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Sean McNulty, welcome to Business Wars. Thank you for having me. Tell us a little bit more about Nelson Peltz. Before the Disney battle, he seemed to have a reputation for, I think his critics would say, weaseling himself onto the boards of companies like Cisco, Procter & Gamble, Wendy's, that sort of thing. What were his goals at those previous companies?

Sure. He calls himself a, quote, constructivist, not an activist. You can interpret that as you like personally, but as you said, it's a lot of CPG. So it's a lot of Pepsi, Wendy's, so kind of a consumer facing products. And then Procter & Gamble is a big one. Snapple was a huge one in his evolution there in Heinz. So no background in entertainment per se here, but he would say that

I think he comes in to help these companies probably become more efficient. It's not for the necessarily good of the people, good of the company, but for the good of the stock. So he comes out on the other side of it with a much more valuable stake in the company and increases his wealth. Why did he set his sights on Disney?

This is a good question. And I don't know that I actually really have an answer here other than he's part of a Palm Beach set in Florida there where certainly, you know, but there's a lot of media people down there. Perhaps that was where this originated from. Again, he doesn't have a history of doing this in the entertainment business. So presumably he saw an opportunity. He's looking at stock prices and when companies that have a beleaguered stock price and in 2022, you know,

Disney was falling into this category due to the cost increases from the streaming wars really taking their effect. 2022 was about their peak spending year for streaming there at Disney. So the stock wasn't doing great. They had a CEO battle or contentious part of it, whatever you want to call it, between Bob Chapek and then Bob Iger, which was not going well in 2022. So I think you saw an opportunity there.

To come in at a company where he could get a stock price that was on the lower side of the historical low side of the stock price, get on the board and make a difference and get that stock price up and do what he usually has done at other companies. Why he wanted Disney per se, I don't know that was ever really expressed. Again, that wasn't really his background in corporate America. Well, it seemed like he really wanted to be hands-on here. I mean, he was offered an observer seat on the Disney board in 2023, kind of compromise. Yes.

but he refused to take it. Why? He just wouldn't have enough sort of personal hands-on? What do you think was going on there? I think, look, he's been on many boards throughout the years. All those companies have been named, you know, it's part of his probably ego and image. Like, you know, he does not want to be consulted. He wants to have a seat at the table. You get

people of that ilk and, you know, the hedge fund world, they're not looking to come in and get a phone call with Bob Iger every month. They're looking to get, you know, really have a, I was voted on. They want to say I'm on the Disney board when they're at, you know, the fancy dinners in West Palm beach.

So that was part of it. And secondly, you know, it's without a seat on the board, you don't have an official say. So otherwise you're just a large, you know, stockholder or semi-large stockholder externally, but you have no, you know, official say, and you don't really know what's actually going on in the room. A board is a very official role. You're seeing official numbers where if it's just a phone call, it can be a very broad slate of information that you're getting there. So that's where I see that that was not, he was after. And once you get the eye on the prize, you don't want anything less at that range. Yeah.

Enter Ike Perlmutter. In March 2023, Ike Perlmutter, head of Marvel Entertainment and friend and neighbor of Peltz, was fired. Bob Iger, who had recently been reinstated as CEO, made it seem like Perlmutter was getting let go regardless of his involvement with Peltz in the proxy battle, but Perlmutter had his doubts.

How much of a factor was Peltz in this decision, do you think? The friction between Bob Iger and Ike Perlmutter goes back years. So this is really a culmination of many things throughout the history of Marvel and Disney. Obviously, Iger, you know, was the architect of bringing the Marvel brand into Disney, and that was Ike's brand. It is Ike's brand. So...

They've not seen eye to eye on some matters throughout the 2010s. And I think this was just another log on the fire that probably burned brighter than even Bob Iger probably thought it would get in terms of Nelson becoming a real problem for Disney, in a sense, with his request. This was...

churning for a while, probably. Iger saw a window and probably took it to make his move and get rid of Ike from the company. I wonder how smart that was, though, because then you have Perlmutter, who'd been with Marvel for decades, joining forces with Peltz. And I wonder whether Iger saw that one coming, I

I think Ike and Nelson are well-known associates of each other. I don't think Iker would be caught flat-footed in that regard. Ike was already kind of a thorn in the side of Iker for quite a few years there. Whether he's on the inside or the outside, Ike still held his shares in the company, which is, again, the seat at the table that he had. Again, not a great percentage of the company, but

but significant. But Ike's role at the company, he was, you know, he's the Marvel person, but he was really relegated by the time of his departure to running the comic book side of the business. It was pretty small. It wasn't, you know, he wasn't running Marvel films. He wasn't involved in any of that stuff. So his role there, and he probably had a pretty nice paycheck at Disney as well. And this was a time of austerity at Disney where they're looking for, you know, to cut costs and things like that. So I think that was Iger's opportunity to, I think, you know, excise Ike from the company and,

I was going to team up with

Nelson, I think no matter what, in a sense. So this was not really a matter of like, oh, this will get rid of that situation with Nelson. Yeah. Okay. So at the end of 2023, Peltz tries to buy Disney again. It looks like an act of revenge. What was different in round two? So in February of 2023, Peltz never actually took the seat to a vote to be on the board. He kind of recanted his campaign at a certain point once Iger made larger changes at the company.

namely large cost cutting and layoffs and things along those lines. So he comes back around again, yeah, in the end of 2023. And...

And he's amassed a larger stake in the company. Clearly, this is something he wants. I mean, this is where, again, back to why does he want to do this? Who knows? That's the big mystery here that I don't know that's ever really been answered as to why was he harping on this seemingly. He came back with about, I think, $2.5 billion stake in the company of owning Disney stock at that point, which is much larger than anything he had previously amassed. This is also where...

Iger had just come back in to run the company. So when Pelts came back into the picture, Iger hadn't run the company for about a year and the stock was still not doing great. Again, 2023 was a very painful year at Disney. There were over 7,000 layoffs. There were $7.5 billion in cutbacks. So Wall Street was still not seeing the love on Disney. So we probably looked at the stock and was like, well, it still hadn't really moved much in that sense. The streaming business was still

disarray, quite frankly. Hollywood was not doing great. The strikes were also in process at the time, so there were a lot of clouds around the Hollywood business at that time. So Nelson probably saw another opportunity again with a depressed stock price, the thing he saw a year ago, and an opportunity to come again, have a seat at the table. And it's also good for the Nelson Peltz business. He

He was on CNBC a lot. It gets his name back out there. Try on partners, you know, it was having some trouble, but Unilever had a really not great experience with its efforts at GE. It could use a win and he probably saw this as an opportunity to do so. So don't never neglect the PR factor for anybody in these players and private equity takeovers or in board seed proxy battles.

Yeah, yeah. Okay, so, of course, Peltz is making this second run for Disney, and he's getting a lot of pushback from Disney's board for not understanding the business. But, of course, you know, he's saying, well, look, I have billions of dollars worth of holdings across multiple industries. I understand business, right?

I'm curious, what do you see as the real reason Disney didn't want Pelts on their board? From an outside point of view, I don't see the added value. I mean, if you have a board member at that point, they had a wide variety of people, you know, from the different industries. They didn't need anybody from a business that was not

at entertainment at that point. And Peltz, you know, had this famous manifesto, Restore the Magic, 133 pages of ideas. And a lot of them were, when he came back around the second time, Iger had already done them. And that was the thing. It was, you know, cut spending on streaming, cut down on sequels, you know, fix animation. This is all Iger year one things he was already instituting. So it wasn't like there was fresh ideas here, but Disney has structural issues that I don't know that Nelson Peltz adds any value to.

other than just to maybe be a detriment and quite frankly, divert focus from getting the job done. So I think that's the main thing as to what the thinking was there. Yeah. Well, you mentioned the Restore the Magic campaign from Peltz and his camp, but both sides of this battle were staging campaigns with social media ads, websites, all sorts of industry media blitzes. It makes you wonder how much of a threat did Disney see from Peltz? I mean, this

was, at least in the public space, a rather ugly, nasty-looking battle.

It really escalated there in the first quarter of 2024. Over $65 million was spent cumulatively on both sides, between the two sides being Nelson and Disney on this, which is a lot of money for a board seat proxy fight. I mean, it's a little ridiculous. And the headlines just kept going. It had a little bit of a snowball effect, I think, where maybe they were hoping this would just go away for a little while, and then it was clear that it wasn't, and the media

was really picking up on it. And then you had people like Michael Eisner and Lorene Powell Jobs and Abigail Disney coming out. And then you had shareholder advisory firms like Egan Jones and ISS supporting Nelson. The narrative kept building and this wasn't going to be something that had to go away.

You know, as to why the big spending in the ads, I mean, it just got a bit of a life of its own at some point, and it was going to build to a crescendo with the vote there for the board, which was going to be in April. So they had to take it more serious than they probably wanted to there at Disney. But the other side of it is, you know, if you don't spend the money...

The negative consequence outlies whatever the negative of spending the money to fight it would be, but if for some reason they didn't spend and Nelson's campaign worked...

I think the downside they figured was much larger there. So they figured it was worth, you know, investing the time and money into it. Yeah. Well, ultimately, Peltz lost out again, second time. And Disney's board voted in favor of Bob Iger and the old guard remaining in charge. When he was asked about the result on CNBC, here's what Iger had to say. I remain confident and very optimistic about what we're doing. Right.

And I just didn't think it was necessary to essentially bring Nelson Peltz onto the board, nor did the board feel that, given the fact that he didn't bring any new ideas and he wasn't going to have an impact on the company that we deemed was going to be positive. Anything that was a belief that it could be a distraction. All right, you think that's a fooled story? It's hard for me to think of anything here that...

But a logical answer is to say what value added Nelson Peltz will bring to the table. There's zero industry expertise. And if anything, you have a big personality, which, you know, Disney is a very conservative and quiet company. They do not like people, you know, going out in the press every day and talking about what's going on. I mean, who knows if he was in board meetings, what he would be saying in the public, you know.

That's a loose cannon. I think if anything in that campaign certainly only reinforced that sentiment. So I have a really difficult time thinking about what would be different if he was on the board at this point. I've yet to think of anything in this whole process other than Nelson really wanted it. And yet that's really the mystery here, at least to me.

It's that if it wouldn't have made much of a difference if he were allowed on, why risk the ugly battle? Why risk the brand equity, you know, using your own Disney characters in this battle? Good night. I mean, the stakes seemed inordinately high.

If all it was, was he wouldn't bring much to the table. It's not bringing ideas to the table. And then it's a detriment to distraction from the company at a time when they were coming out of crisis mode there. And if you're running a board, you don't want disharmony on the board. Succession was a main thing. So is this person, do you want him really having a say in who the next leader of this company is? It could lead to him asking for more seats on the board. You know, once you start something,

that opens a bigger door. You don't want to open that door on the board. And I, that I think is a wise tactic for Disney to have taken in that sense. So they just let them in, you know, and that means also means somebody has to go. So someone who you presumably you like already. So again, you're, you're maybe even detracting value from your board. So,

I think there are negative consequences to that other than, well, if he's one seat or two seats, you know, which is what they were asking for. Jay Rusulo, the former CFO of Disney was also running. Team Nelson was the two of them. So that's two seats they were kind of looking for there. That's, you know, could be a real detriment. And you're looking to, again, you don't want to have a lot of noise at a company that way. That's another headache that adds no value. You might want to spend the time and the money to really make sure that doesn't happen.

Anyone else sense that maybe some egos may be at play? I'll tell you what, let's take a moment for a short break. Coming up, we're going to take a closer look at the Bob of it all and whether longtime Disney CEO Bob Iger is going to stick it out for another term. Stay with us.

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Hey, welcome back to Business Wars. Our guest is Sean McNulty. He's author of The Wake Up, a newsletter from The Anchor covering Hollywood and the media industry. Sean, we have to talk about Bob versus Bob because this really catalyzed the first proxy battle. Bob Iger decided to step down as CEO of Disney in 2020. Somewhat good timing on his part, whether he knew it or not. What was the industry buzz surrounding that move at the time? Did folks really believe Iger would actually hand over the reins?

There are still a lot of questions we hear from, you know, over four years later to this activity that happened here in February 2020. Of course, pre-COVID, you know, Bob Iger had been at the company, I guess we're talking 16 years or for 15 years at that point. And it happened really fast. And, you know, Bob Iger famously, you know, Succession's been around even before the shapeback era of this.

Had been a problem. We extended his contract numerous times. So all of a sudden to be doing that and then be like, yep, I'm leaving. I'm going to give the keys to Bob Chapek. And, you know, that's thank you very much. You know, it was very abrupt. And everybody's like, what did he just do? But the thing is, he wasn't leaving. He was becoming executive chairman and he wanted to stay in charge of creative things.

So it was this kind of faux thing that was going on and that, yes, he wouldn't be CEO, but he was never leaving the picture at Disney. So that was even more...

baffling in the sense that, you know, how's this all going to work was really the question as well. So on top of that, again, this all happened at the backdrop of COVID and the parks shutting down and movie theaters going dark, you know, so it was just a tremendous amount of chaos going on. And you'd think you'd want a steady hand at that time, not the best time to be transitioning leadership at a global pandemic on the doorstep there. So that even added more to it. I don't know that anybody...

Let's talk about the decision to name Bob Chapek as Iger's successor. I mean, you know, on paper and in some interviews, I mean, Chapek was like the foil to Iger. The two couldn't be more different.

And I wonder, I mean, if you're Bob Chapek, I mean, looking back, you got to be thinking, wow, how fair was that? And how do you see it? I think it's a relationship that turned. I mean, Bob Chapek was there for over 20 years. This wasn't like some guy they brought in off the street who just had come in three or four years ago. So they had worked side by side for, you know, for many, many years and

by all accounts, had a good relationship. Bob was promoted throughout his tenure. He was in home entertainment for his first spell there, moved over, you know, to consumer products, and then moved up to run the theme parks ever since 2015. So until this era, he'd been running theme parks for five years, a rather large business at Disney. So yes, Iger and Chapek knew each other quite well. And then, you know, the good news, you know, Bob Chapek, we're giving you the CEO role, but I'm not leaving. So

That's not really instilling confidence. And typically the CEO role at many companies, including Disney, reports into the board. Iger wanted Chapek to report into him still. So then it's like, well, what's changing here? The compromise they reached was that Chapek would report into the board and into Bob Iger. And reporting into two people is always tenuous at best and often a disaster, which is what it turned out to be. So let's stop down for just a moment because...

Here's what I'm just throw out the unspoken. This is the elephant in the room, it seems to me. No one really knows why Bob Iger decided that he wanted to walk away when he did. It's still the stuff of speculation, as you were saying earlier.

And then Chapek comes in and Disney is flailing. Do you think Iger saw something coming and in a way threw Chapek under the bus? That's the probably popular narrative, I think, that exists out there. And that's just, you know, it's very external. But if you're looking on paper and looking at what happened in the end of Iger then returning. So he can be the hero in a way.

That's the way it worked out. So one could really make that argument and there's very little evidence you'd have against that. Now, did Chipek screw up a lot of things when he was there? Yeah. So to be fair, he had his own problems as a CEO. I will caveat that, but...

You could definitely paint that narrative. And again, as we said, Iger left, it's February 2020. He saw what was at a park in Shanghai. He saw exactly what was happening overseas. Again, this is all speculation, so to be fair about that, but you could say that fact

Fast forwarded whatever thing he was thinking into that mode and he get to stay around and do what he likes to do is to run the creative work on the movies or read scripts and famously gives notes on every project and all this kind of thing. And then Bob Chapek did not help himself out during his tenure, but he was also set up to fail. But I think we're getting at the heart of something that

perhaps is lost a lot of times when we hear about these proxy wars. So much of it comes down to these human dimensions. And I want to ask you about something you said on the Ankler podcast. You and your co-hosts were talking about the mythologization of CEOs, especially in the media.

Can you break down what you meant by that and share how that shows up in this Bob Iger succession narrative as you see it? 100%. I mean, you know, Bob Iger is seen as and arguably is one of the best CEOs Hollywood has had in its tenure. You remember when he came in in 2005, what that company was? It had just come off a very, very tumultuous period with Michael Eisner, you know, in the battle with the board for three years where I go with COO. He was front row seat to all of that.

And he made massive big bets. I mean, look, Marvel, Star Wars, Pixar, these were not things at the time were like, oh, that, you know, these are major, major multibillion dollar bets that he made that paid off. And the strategy paid off for his first, you know, 10 years of his of his tenure there. The transition to streaming was much bumpier. And that was the kind of the second half of this tenure here.

So there is that cult of Iger when you have your first 10 years is that's not a bad track record. You know, Marvel to Star Wars to Pixar. Yeah. I mean, this was a combination of a lot of factors that worked.

So he seemed like he had the magic sauce, you know, at that point. And once you have it, once you're perceived that way, you want to keep that. The one thing I could never do was land the plane on who's ever going to succeed him. And this is the narrative we're still talking about here as we begin 2025. But, you know, Hollywood has a grand history of this. I mean, go back to Jack Warner, the top of the business at the start of Hollywood here. Moguls and CEOs have defined the mythology behind the scenes.

You can go back to the, you know, the Wars for Paramount with Sumner Redsdale and Barry Diller, which was well-documented on this podcast that, you know, there's been, these are larger than life characters.

Bob is much more reserved than those kinds of things, but he's really the only executive left of that ilk. What is the latest on Bob Iger's succession? I mean, you think he's going to stick around for another term as CEO or maybe as creative director once his contract ends in 2026? If Bob Iger sticks around to 2027, 28, I really can't even imagine the response. I think he's learned the lesson. He can't do what he did last time and stick around in that creative role that you just mentioned. Back to the image part of it.

This is important for him to end his narrative. And if he can't do that, that will forever stick with him and his story. It'll be the guy who built Disney, you know, into its modern self and, you know, acquired Fox, but he couldn't leave the company. He couldn't leave the party. You don't want to be that guy. You know, I mean, he's more painfully aware of that.

Look, I'm not saying anything new. This was valid in 2020. What happened there, that was bundled about as badly as you could do of a power transfer, whether that was A, I mean, picking the wrong person or, you know, that's debatable, but clearly, you know, it didn't work out. B, sticking around in that role, which was a disaster. You can't be the boss and leave. He kept his office. He didn't even leave the CEO office that he had. Yeah.

What kind of message does that send to... It doesn't just send to Bob Chapek. It sends to the staff. It sends to everybody else. It's like, is this guy still working here? I mean, think about it. If your boss said they were leaving...

And then you saw them every day on the lot. It's like, well, I thought you left the company. And it's so he's, you know, learned that lesson of it. So I don't see him staying around any other when he's leaving. He has to be out. But then if not, if not Iger, then who? I mean, Wall Street Journal was that they were talking about. Wall Street Journal article had something on the possibility of the CEO of EA, Andrew Wilson, former Morgan Stanley CEO, James Gorman, although that's, you know, in

entertainment, former Morgan Stanley CEO. But I think Gorman's also joining Disney's board. So I guess the bigger question is, what does Disney without Bob Iger look like when you squint real hard? If you ask my colleague Richard Rushfield at The Anchor, he will tell you that...

The big plan for Iger is to make a deal with Apple. But that's out there, the ether. I have my own questions about that. But Iger's been, back to the mythology about Iger, he's a dealmaker. That was really the definition of his tenure were four major deals, Pixar, Marvel, Star Wars, and Fox. If he can pull off this one last deal to...

you know, seal Disney's future under a larger, you know, tech company when the tech companies are taking over Hollywood and, you know, what's the match? That is one theory that's out there. They recently just announced that the decision won't even be made until essentially he has one year left at the company. Now that is raising a lot of eyebrows because that leaves, you know, a good 14 month window there for,

Maybe there's a deal that's going to go on to Chino. Why aren't they naming a CEO in that time? Well, that leaves a large window to get another kind of deal done for Disney. Maybe they won't have a CEO that time is a, you know, certainly a thought that's out there in the town. We're going to talk about Disney's next act as this episode of Business Wars continues. But first, another break. When we come back, we'll dive deeper into the future of Disney and some other legacy media studios. Stick around.

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and be faster from idea to outcome. Go to Miro.com to find out how. That's M-I-R-O.com. Welcome back. Sean McNulty hosts the Ankler podcast, where he and his co-hosts break down the latest media industry trends and topics to make sense of the news. Let's talk numbers here, Sean. We know that Disney had their quarterly earnings call recently. What stood out to you the most about how things are going?

This was a good quarter. This is the end of their fiscal year, 2024. A lot of things have turned around. They're at a streaming business profit of $253 million, which is up from a loss of $150 million a year ago at this time. It's even from a loss of about $20 million back in the second quarter. So

Iger had made a promise that streaming would be profitable by this quarter, and it was, and it will be going forward. Price hikes are a big narrative here at Disney and as to what's turned this around as they've been charging more. That has gotten to them this place where, you know, this business is no longer a sinkhole. This has a future, you know, that is a big accomplishment to be lauded.

It is offsetting the decline in the linear business, which is stark. I mean, you look at the annual rate of decline due to cord cutting for the cable business, it's losing about 7% of their subscribers a year. Other than that, the movie business did very, very well. Again, movies, as my colleague at The Anchor says, it's a business of hits and they had, you know, the two biggest this year in Inside Out 2.0.

and Deadpool and Wolverine. Alien was another big hit for them. So last year was a disaster with the Haunted Mansion and Indiana Jones. Theme parks are doing, you know, okay. Kind of flat-ish at this point. And ESPN is a real big question in terms of, you know, transitioning that business off of the cable TV bundle into a direct-to-consumer world, which will be happening in, you know, about a year from now in August, September of 2025.

Not a lot of details yet, but that is a big endeavor for Iger to pull off here. So there's a lot of good signs that there's stability. The stock price is back to almost where it was where Nelson Peltz sold at after his campaign failed for a board seat.

So there's some stock growth going on, not to the heights that it once had, but it's no longer in the basement than the 80s. It's probably more right up toward about 110, 115. Well, but despite all the profitability that Disney's happy to talk about, there have been lots of layoffs in the entertainment industry. A few months back, we had your ankler colleague Elaine Lowe on the show to talk about the ones impacting TV. And Disney wasn't spared here. And in 2023, they pledged to cut nearly 8000 jobs and they seem to be following through with it.

Is that part of what's contributing to the bottom line profits here that they're just basically cutting down on expense? And that's...

That's making them look better to Wall Street. It's definitely been part of the success. Again, a lot of the growth here, you're talking year over year, right? So even the cuts were last year, you know, you're seeing the effects of it this year. So your comps are a lot better this year on an appearance level. So they just, again, consolidated their TV studio business further this summer. So this is, again, summer of 2024 here.

still figuring out the TV studio business. When they bought Fox, they inherited massive, massive TV assets and they've

really kept a lot of them organizationally intact, where you had a lot of divisions doing kind of the same thing of developing and producing and pitching TV shows around town. And they never really integrated that. So they finally did that this summer, which again, resulted in some more layoffs. They had layoffs at Pixar back at the top of the summer. So yeah, this is still ongoing here. This isn't over, even though the massive part of those numbers you mentioned of

7,500, 8,000 people were, you know, during last year, 2023, this is still in effect this year. And that's, it's not great for morale really. So this will be an ongoing narrative going on at the company for sure. So let's step back then from Disney for just a moment. If you look at the pyramid right now in, in Hollywood, how does Disney compare with its rival studios? Who's at the top of the pyramid, that sort of thing.

If we're including the streaming-only companies, Netflix is certainly arguably at the top in that sense of the entertainment business. Disney is a much more sprawling company in terms of its assets and its brands, but Netflix is making great strides, throwing up an immense amount of profit at this point. From a market cap point of view, their stock is a year through the roof at this point. So that probably gives them an advantage in that sense, but Disney has succeeded in

in becoming a global player in streaming. And that's really the question of Hollywood right now is who's going to, you know, kind of make the leap is a big, you know, a big term of all these companies. You got Paramount, you got Warner Brothers Discovery, you have, of course, Amazon, Apple, Disney, Netflix. The thinking is there's about three or four of these brands and businesses that make it, you know, at this point. Disney is amongst those brands that are in

150 countries with Disney+, so it's very large scale there. Netflix, of course, is the bigger one. Amazon has also succeeded in becoming a global company in that route. So those are probably your top three right there. And I'd say Disney is probably one or two in that list. Yeah. And below those two or three at the top, we've seen the merger of Paramount Global and Skydance this year. A few years back, we had the Warner Discovery merger. And

And still we have some legacy studios that are continuing to struggle. I guess it makes you wonder how media consolidation affects the health of these companies and, and,

And I wonder what the consolidation of studios that we've seen already, how that's going to affect the industry long term. What do you think? The general consensus among most people, including myself, is, you know, the next 18 to 24 months will have a pretty large scale rate of change still ahead. And this is coming off of a very busy time. As you said, Warner Bros. Discovery was only about two and a half years ago that that happened.

Uh, as you mentioned, Paramount had a very large and public auction this year, essentially. And that's going to close probably somewhere in the spring of next year. And they've already pledged to cut, you know, or to find cost savings of $1.5 billion, you know, from Paramount. So there's gonna be some major changes there. Uh,

The main questions at this point, I mean, World Barber's Discovery is probably your biggest X factor at this point that everybody's looking at. When you say the biggest X factor, what do you mean? Biggest X factor for deal-making, something's going to happen with this company in that sense. You think so? That is the general consensus. They have a business that is shrinking. They don't have a broadcast TV network, which hurts them significantly.

Their profits from the cable business continually shrink it to a large degree, quarter over quarter and year over year. And there's no real solve here for that. They essentially combined one company which had a core cable business with another company that was a core cable business. And that business is in secular decline.

So they need to find an answer. They have not grown revenue since this deal happened in 2022. So it's becoming a smaller company. The revenues are going down. Something has to give here. They've been trying to get back to that global stage. They are the slowest to get there. They still have a ways to go. They have another two years before they're really going to be anywhere near considered a global streaming service. So there's just a lot of things at play there.

That a lot of people just think that something has to happen here. And we're waiting to see what that might be. You know, it seems like streaming has been the focus for a lot of these media companies. I mean, so much of the focus right now, so much of the talk. And I'm curious how much longer that's going to be the thing or whether we're going to see another shift, another investment focus for some of these media companies. What do you think?

Again, you got to follow the consumer and the technology. And this is, you know, yes, it is moving to streaming. It's increasingly moving to streaming. The cord cutting has gotten this bad. Everybody knows this, but nobody has any answers. So streaming, they have to make work. The cable TV bundle was the greatest business model ever created in entertainment. And it's not going to be repeated. I mean, as good as streaming is going to get, it's never going to be that model where you had over 100 million people in America

paying you a monthly fee for things they did not watch. So that streaming is a la carte. They're trying to rebundle this. And that's kind of what you're to answer your question. What the plan is here is to rebundle, but you're never going to have that. The reason the cable bundle worked because that was the only way to get it. Now it's streaming. It's like, you're not going to put that back in the bottle. So that is a bit of a problem, but the math is starting to work on streaming. And that's what we're seeing right now here is 2024 is ending out.

is that you are finally seeing again the profit at Disney, WBD had a profit in Q3 as well, even Paramount turned a little bit of a profit. I mean, the profits that the cable business throws off of these companies, you're talking, you know, $2 billion, $3 billion a quarter. So streaming is not doing anywhere near that, and that's what it has to get to. Will it get there? That's, you know, the million, the billion dollar question in Hollywood at this point. You know, we've come a long way from where we started here. You know, we were talking about a proxy war. Yeah.

It seems old fashioned, right? Yeah, it does, doesn't it? But I don't know. But this is the point though. What does Nelson Peltz know about anything we just talked about? He has zero experience in any of these things I'm talking about. So again, value added. Why would you want this person on the board? There's nothing going to happen here that he's going to affect, be able to give you any leg up in any of this kind of thing. So again, I am with Bob Iger when he's like, we saw no value in this and I have to agree with him.

Well, then again, Nelson Peltz might have given a few other billionaires some ideas. I wonder if we're not going to see, if we've seen the end of the proxy wars when it comes to Disney. What do you think? It's a good question. I think no one looked at Nelson Peltz of that set and said, yeah, I want my image to be like that. I don't think anybody really sat there. Nelson loves that spotlight. Some people in this world do not want to have anything to do with it. You know, he's talked about Paramount and Larry Ellison. You still haven't seen him talking about this Paramount deal, even though he bought the company. Yeah.

He is, you know, it's David Ellison. He's the face of this, his son, you know, so they're bearing points of view on that. So I don't think at this point, and Disney stock prices also rebounded. So if Disney comes back down, there's a quote from Nelson Peltz just this month here in November. He said, if the stock goes back to the 80s, you guys, I'll be back. I promise. So maybe we have not heard the last of Nelson Peltz at Disney.

Sean McNulty is the host of the Ankler podcast and author of The Wake Up, an online newsletter covering the business of Hollywood. You can subscribe and check out the podcast at theankler.com. Sean, thanks so much for joining us on Business Wars. It's been great to talk with you. Really enjoyed it. Coming up on Business Wars, the holidays are in full swing. So we're finding out how consumers are shopping this season and the impact social media sites like TikTok have had on holiday gifting habits. Don't miss it.

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