Unsure who to vote for regarding the Walt Disney Co. Board

[Casper Gutman]

I agree, but if the accusation that those favoring Peltz are doing so just because of politics (a claim made by two different members) is good enough to stick, so is my claim. I'm glad we can both agree they're both ridiculous propositions.

When someone who supposedly loves something aggressively advocates for a course of action that history and almost every knowledgeable expert says will irreparably damage the thing, it’s logical to seek out an ulterior motive. That’s not the case when folks are frantically trying to avert negative consequences for the thing they love.

 

[monothingie]

The entire industry has been rocked by unprecedented changes since the days the stock was overinflated. Paramount is dead. WB is dying. Their is no “new normal” in sight.

They were dead companies walking long before reality came back into the picture. Everyone knew that.

 

[Brian]

When someone who supposedly loves something aggressively advocates for a course of action that history and almost every knowledgeable expert says will irreparably damage the thing, it’s logical to seek out an ulterior motive. That’s not the case when folks are frantically trying to avert negative consequences for the thing they love.

I'd argue that leaving in place the "old guard" of people who are responsible for Disney's demise, and unable to accommodate the shifting market forces, is antithetical to maintaining the thing they love. In other words, Bob and his cronies have had their chance, and they have failed. Peltz and Rasulo bring new perspective and ideas to the table which may help avert Disney going the way of Paramount and WB, which you (in another post) claim are on the verge of collapse.

 

[Animaniac93-98]

As you know, I agree with you about the decline at the Disney resorts, but with all due respect to a good poster, I don’t think we’ve come anywhere close to seeing what “down the drain” really looks like.

I think DLP in the early 2010s is the worst physical shape I've ever seen a Disney resort in. Certainly the room I had in the unrenovated section of Newport Bay Club in 2014 was the most run down Disney hotel room I've ever had. I'd say at this point certain MK attractions look as bad now, but I've said plenty on that park specifically over the years.

But I also feel that many of the changes to the parks have made them worse too, despite the investment spent.

I guess a true worst case scenario would be like what happened to Six Flags. Huge price increases in the face of a sharp decline in upkeep, staffing and just about anything in the park.

In some ways, we're already there. But yes, things could still be worse, even if that's cold comfort atm.

That certain things still exist for us to enjoy is a minor miracle.

 

[Casper Gutman]

I'd argue that leaving in place the "old guard" of people who are responsible for Disney's demise, and unable to accommodate the shifting market forces, is antithetical to maintaining the thing they love. In other words, Bob and his cronies have had their chance, and they have failed. Peltz and Rasulo bring new perspective and ideas to the table which may help avert Disney going the way of Paramount and WB, which you (in another post) claim are on the verge of collapse.

This is the game you always play.

Tell me, with specifics, about Peltz’s, Perlmutter’s, and Rasulo’s “new perspective.” Not hand-waving and vagueness - actual specifics based on their past behavior. These guys are not “new.” We know them. In particular, tell me about how you think Perlmutter would try to shape Disney.

 

[Brian]

This is the game you always play.

Tell me, with specifics, about Peltz’s, Perlmutter’s, and Rasulo’s “new perspective.” Not hand-waving and vagueness - actual specifics based on their past behavior. These guys are not “new.” We know them. In particular, tell me about how you think Perlmutter would try to shape Disney.

I guess I have to do the work for you.

From their filing:

If elected, Nelson Peltz and Jay Rasulo will seek to work diligently and collaboratively with the other Disney directors and management to:

• Initiate a Board-led review of the Company’s creative processes and structure so that Disney can once again claim its #1 position at the box office while consistently delivering industry-leading content and Disney hallmarks;
• Insist that management finally develop and implement an executable plan for the streaming business in order to achieve Netflix-like levels of profitability;
• Have the leadership team commit to a detailed plan that includes a reasonable payback period and return profile for all future investments in the direct-to-consumer ESPN business;
• Press management to disclose the expected returns on the $60 billion of announced investments in the Parks and Experiences business;
• Align pay and performance for the Company’s senior leaders by tying compensation to clear, measurable and ambitious goals; and
• Finally execute a successful CEO succession process, while cultivating a deep bench of capable, next-generation leaders.

Here is their perspective:

• The Company’s creative engine has stalled. For the first time in nearly a decade, Disney has lost its position as the highest-grossing movie studio.7 Disney’s last five films have collectively cost over $1 billion to produce, and yet two of those films have lost money, and another barely eked out a profit.8 Disney’s reputation as the world’s preeminent entertainment company – and the flywheel that drives its business – is at risk.
• Disney+, the emerging streaming business, has been poorly managed. Since the service was launched in 2019, Disney+ has failed to achieve profitability in any fiscal year. And while Netflix generates attractive profits, margins and cash flow from its streaming service, success at Disney+ has been elusive. Today, Netflix generates approximately 21 cents of profit for every dollar of revenue; in its 2023 fiscal year, Disney lost approximately 14 cents for every dollar of streaming revenue.9 In total, the streaming businesses have cost the Company more than $14 billion in operating losses over the last six years.10
• ESPN is challenged and lacks a clear strategy. ESPN is one of the most respected brands in sports media, but the once-lucrative business has suffered as cord-cutting has accelerated and sports rights costs have dramatically increased. ESPN has continued to shed subscribers, and investments into the direct-to-consumer app appear to lack clear return targets and payback is uncertain. Operating income for Disney’s Sports segment, which includes ESPN, dramatically declined in 2023.11
• Prices have gone up in the Parks even as investment has been deferred. Disney’s parks have long been a crown jewel of the Company and remain an important part of its future. But even though admission prices have increased by more than 35% over the last ten years,12 Disney recently revealed the need to invest a whopping $60 billion into its parks and cruise lines over the next ten years, seemingly to catch up for delayed or deferred investment.13 Disney has failed to answer how it plans to compete with Universal’s new attractions, why it has not kept pace with development, how and where this money will be spent, or what returns shareholders can expect to earn on this massive investment.

Now go ahead and tell me what the current board, which has overseen Disney's slump (putting it mildly), plans to do. As you say: not hand-waving and vagueness - actual specifics based on their past behavior. These guys are not “new.” We know them.

 

[mikejs78]

On the other hand, should they wish to do things to benefit the company, as they are obliged to do per their fiduciary duty to the shareholders, I'm confident they would be able to secure the necessary support of their fellow board members.

To suggest that two board members are capable of garnering the support necessary to "destroy" the company is purely hyperbolic.

Peltz and Rasulo bring new perspective and ideas to the table which may help avert Disney going the way of Paramount and WB, which you (in another post) claim are on the verge of collapse.

That goes against everything Peltz has done throughout his career with one exception. He has no fiduciary responsibility to benefit the company. The only fiduciary responsibility they have is to benefit shareholders. And if that means selling Disney for parts, that satisfies that requirement.

I'm looking not at what Peltz says, but what he has done - his past results. Company after company he has gone on boards, mounted pressure campaigns on the other board members, which has resulted in decisions that are great for short-term shareholder value, but destructive to the companies long term. The one exception is Snapple, but that was more than a quarter century ago.

 

[Brian]

That goes against everything Peltz has done throughout his career with one exception. He has no fiduciary responsibility to benefit the company. The only fiduciary responsibility they have is to benefit shareholders. And if that means selling Disney for parts, that satisfies that requirement.

If we are to believe that Disney is unsalvageable by anyone living today, as the member I responded to suggests (edit: the parks at least), then why is selling the company in parts such a bad thing? That's the best shot of maintaining anything close to the "old Disney" and could actually turn out very well for the parks at least, if done right.

I'm looking not at what Peltz says, but what he has done - his past results. Company after company he has gone on boards, mounted pressure campaigns on the other board members, which has resulted in decisions that are great for short-term shareholder value, but destructive to the companies long term. The one exception is Snapple, but that was more than a quarter century ago.

Disney is not Snapple, Mondeliz, Wendy's, Pepsi, or any of the other companies Trian has invested in. You cannot run Disney, an entertainment company, like you do food service or retail companies, which account for most of the companies they have invested in. They're vastly different businesses requiring different approaches.

In the absence of evidence as to how he would handle being on the board of an entertainment company, we are left to rely upon his public statements.

 

[peter11435]

.

In the absence of evidence as to how he would handle being on the board of an entertainment company, we are left to rely upon his public statements.

Or… we don’t risk everything trusting the word of a businessman with a bad track record. Even his prior track record with Disney should show that he’s only interested in one thing.

There are other options

 

[BrianLo]

What does Iger/Damaro care?

It's the same ice cream, just a different flavor.

Iger certainly cares about his legacy. He has unequivocally tangled his legacy into Disney now. He was trying to set himself up to leave on a high note and instead fled in a panic. Since the political aspirations seems to have simmered out, his legacy is the health of Disney company and his perceived ability to save it.

D’amaro seems to care more about being liked by parks fandom. I don’t think Iger cares so much about this. Being liked by parks fandom is coincidentally usually good for the parks.

The current corporate raiders don’t care about any of that. Their legacy isn’t Disney. Their fandom isn’t Disney fans. They are stepping stones for money.

You can very correctly surmise all of them have misguided principles, but only the first two actually can align with the long term health of the Disney company.

 

[Brian]

There are other options

For me, I see either maintaining the failed status quo with the board who oversaw Disney's decline, leading to Disney slipping further and further into trouble, or giving outsiders a chance to fix it.

What other options do you see?

 

[Casper Gutman]

I guess I have to do the work for you.

From their filing:



Here is their perspective:



Now go ahead and tell me what the current board, which has overseen Disney's slump (putting it mildly), plans to do. As you say: not hand-waving and vagueness - actual specifics based on their past behavior. These guys are not “new.” We know them.

This is very specifically not what I requested. As you well know, this is PR boilerplate completely devoid of meaningful specifics designed to dupe the credulous or the willing. It is also completely at odds with a lifetime of behavior from the three men involved. I ask again, based on the PAST BEHAVIOR of these three men and particularly Perlmutter, what specific measures do you think they will undertake if they get what they want?

PS: It should also be noted that this bit: “Press management to disclose the expected returns on the $60 billion of announced investments in the Parks and Experiences business,” should strike fear into the hearts of any park fan. It’s a declaration that they will exacerbate the worst instincts of current management, the ROI obsession that is one of the main cause of the decline of the parks.

 

[peter11435]

For me, I see either maintaining the failed status quo with the board who oversaw Disney's decline, leading to Disney slipping further and further into trouble, or giving outsiders a chance to fix it.

What other options do you see?

We need a board and leadership that can get things back on track precisely to prevent people like Peltz from being able to gain control. The current board is weak like a weakened immune system that allows virus’s like Peltz to get in and attack.

People who support Peltz just because they don’t like the status quo would have likely supported Saul Steinberg too.

 

[Lilofan]

We need a board and leadership that can get things back on track precisely to prevent people like Peltz from being able to gain control.

People who support Peltz just because they don’t like the status quo would have likely supported Saul Steinberg too.

Stockholders voting to replace a board member(s)?

 

[mikejs78]

That's the best shot of maintaining anything close to the "old Disney" and could actually turn out very well for the parks at least, if done right.

It's rather myopic to think that breaking up the company will be anything but a disaster for parks fans. The goal of breaking it up will be to milk every last dime out of it, not to restore the Disney magic. Very few companies do well after being sold for parts, and the license issues alone may destroy the parks in the long run.

You cannot run Disney, an entertainment company, like you do food service or retail companies, which account for most of the companies they have invested in. They're vastly different businesses requiring different approaches.

In the absence of evidence as to how he would handle being on the board of an entertainment company, we are left to rely upon his public statements.

Look who is behind this: Ike Perlmutter. He does have experience at an entertainment company. And look what he did to Marvel pre-Disney? Selling off rights to the highest bidder, being stingy with costs to the extreme, gauging everything on what could sell the most toys....

Remember, Peltz started this whole thing initially because he was *upset* that Chapek was gone.

 

[mikejs78]

Stockholders voting to replace a board member(s)?

Yes, but someone who has a track record of actually caring about Disney or building successful companies.

 

[Casper Gutman]

If we are to believe that Disney is unsalvageable by anyone living today, as the member I responded to suggests (edit: the parks at least), then why is selling the company in parts such a bad thing? That's the best shot of maintaining anything close to the "old Disney" and could actually turn out very well for the parks at least, if done right.


Disney is not Snapple, Mondeliz, Wendy's, Pepsi, or any of the other companies Trian has invested in. You cannot run Disney, an entertainment company, like you do food service or retail companies, which account for most of the companies they have invested in. They're vastly different businesses requiring different approaches.

In the absence of evidence as to how he would handle being on the board of an entertainment company, we are left to rely upon his public statements.

“See, Disney begins with a D. We don’t have ANY IDEA what he’d do at a business starting with a D. We’ve only seen him at businesses starting with S, M, W, and P.”

The idea that Peltz would change his entire lifetime philosophy because this is an ENTERTAINMENT company is laughably absurd. Surely such a distinction would mean the world to a corporate raider who sees companies as assets to be sold.

By the way, Perlmutter spent much of his life at an ENTERTAINMENT company - the one he’s currently trying to rejoin. That seems like pretty relevant experience - how’d he behave?

 

[Brian]

This is very specifically not what I requested. As you well know, this is PR boilerplate completely devoid of meaningful specifics designed to dupe the credulous or the willing. It is also completely at odds with a lifetime of behavior from the three men involved. I ask again, based on the PAST BEHAVIOR of these three men and particularly Perlmutter, what specific measures do you think they will undertake if they get what they want?

Is it your position that they are lying in an SEC filing? In other words, a crime?

Also, I'm still waiting to hear from you what the current board plans to do differently if they are reelected to their posts after years of complacency and failures on their watch, leading to Disney becoming a laughingstock. At least Trian had the decency to lay out what they think is going wrong and outline what they wish to do about it. If you take Disney at their word, things have never been better.

PS: It should also be noted that this bit: “Press management to disclose the expected returns on the $60 billion of announced investments in the Parks and Experiences business,” should strike fear into the hearts of any park fan. It’s a declaration that they will exacerbate the worst instincts of current management, the ROI obsession that is one of the main cause of the decline of the parks.

Say it 'aint so! A prospective board member wanting to make sure that a 60 BILLION DOLLAR investment generates good ROI.

 

[Lilofan]

Yes, but someone who has a track record of actually caring about Disney or building successful companies.

Shortly before he got fired Chapek held meetings with shareholders at Four Seasons WDW where he wined and dined them. Nothing but the best resort at WDW for accommodations and service. Keep them happy.

 

[Casper Gutman]

Is it your position that they are lying in an SEC filing? In other words, a crime?

Oh my! Far be it from me to suggest any executive might engage in deceptive spin! Surely such a heinous crime would be instantly prosecuted to the fullest extent of the law, regardless of the wealth and power of the perpetrators. This is why history teaches us corporate raiders only behave with the highest ethical standards.