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

[Brian]

Peltz wants to reduce the proposed spend. That’s one of the very few proposals I’m actually able to glean.

Disagreed. My interpretation is that so long as the $60 billion can lead to sufficient ROI, it is both appropriate and necessary to maintain competitive advantage, and they're already late to the party with it.

 

[Andrew C]

It’s Super Bowl Sunday. Jesus Christ.

 

[lazyboy97o]

It’s Super Bowl Sunday. Jesus Christ.

I ain’t falling for that psy-op.

 

[Lilofan]

Shareholders voting to replace board members with someone that is only interested in benefiting himself and does not care about the company at all.

Seemed like the Board isn't the only ones to blame but the bullseye is on them and Iger and not the shareholders.

 

[Lilofan]

It’s Super Bowl Sunday. Jesus Christ.

My team isn't in it.

 

[flynnibus]

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.

No - you said those arguing against peltz. Arguing for and against are not on the same motives. Many are arguing for peltz based on political and moral objections against the current conpany. The inverse can not be drawn against peltz. People are against peltz because of his business strategies and priorities.

The post I was responding to was a claim that Peltz and Rasulo could effectively destroy the company with their two board seats. Assuming a board of 12, they would have to convince several other board members, most of whom are current board members, and/or Iger loyalists, to go along with their allegedly nefarious plans, a highly unlikely proposition.

Boards like to project unity. Which is why even a minority is a problem. Board members are also exposed to critical information that can be weaponized. It’s why even a minority position is critical and not just about who controls votes.

 

[BrianLo]

What is your hypothetical path forward for Disney that doesn’t involve D+ achieving the same numbers as Netflix?

D+ may become profitable soon but can it be sustained?

How is profitability being obtained ?

We know its by cutting costs aka cutting content.

That may not have an immediate affect on subs but long term it will increase churn.

Netflix has won the streaming war.

I want to address your Netflix comparators. What do you think Disney’s goal is and was regarding streaming? Is the only benchmark of success for streaming to be the biggest player?

Netflix already has a market cap higher than the entirety of the Disney company. I personally don’t think it’s healthy for the company to become a streaming performer only and a studio/parks company secondarily. The goal really doesn’t need to be for Disney to scale to Netflix. The goal is to be a secondary moderate choice. That’s where I think Chapek and Iger most differed. Iger under-launched the service and Chapek had sudden visions of being Netflix, with the content spend torrent to follow.

The path forward for D+ is the one they are on. Folding Hulu in eventually - which address the (largely only American problem) of the service not feeling robust enough. Have a moderated amount of high quality content. More than a single Mandalorian show as your keynote for the year, less than milking every IP to death or flooding the service with anything to see what sticks (Netflix).

The way forward is exactly what they are on. Price increases have also contributed towards profitability with a largely stable core subscriber count. Future moderate price increases (like a dollar annually) ensures a good distance from Netflix (that is almost twice the price) - while being able to both increase content spend and also grow profits.

I really think they are on a good pathway and while DTC isn’t a 300 billion buisness for Disney, it can be a very solid 100 billion dollar one along with their other segments holding equal weighting.

The stock should have never been that high. Post Covid hyper inflation of the stock price was not realistic

Precisely. Out of exuberance and stupidity, Chapek leaned into the hyper fixation on subscriber count and basically pied-pipered Wall Street with an absolutely wallop of empty Hot Star subscribers. Disney weathered the Pandemic magnificently better that it ought to have (compared to P&R focused companies like cruise lines)… but we are still paying the price for that misdirect.

 

[UNCgolf]

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?

It seems like a stretch to call Ike Perlmutter and Jay Rasulo outsiders.

 

[Brian]

No - you said those arguing against peltz. Arguing for and against are not on the same motives. Many are arguing for peltz based on political and moral objections against the current conpany. The inverse can not be drawn against peltz. People are against peltz because of his business strategies and priorities.

It works both ways. I'll go ahead and assume bad faith, politically-charged motives for those opposing Peltz since they just assume the same about my (rather unenthusiastic) support for him.

If we want to stop being petulant children who make everything political, and actually consider the arguments being made, we'd see that neither those supporting or opposing Peltz on this forum are doing so because of politics, but because of a desire to see Disney succeed.

 

[Brian]

It seems like a stretch to call Ike Perlmutter and Jay Rasulo outsiders.

Agreed. By 'outsider,' I mean to differentiate between those on the board/working for the company and potentially involved in its current problems, and those who are not.

 

[UNCgolf]

Agreed. By 'outsider,' I mean to differentiate between those on the board/working for the company and potentially involved in its current problems, and those who are not.

I think there's a solid argument that Jay Rasulo is a major part of their current problems, especially regarding the parks.

They may not be so far behind in capacity etc. if someone other than him had been in charge a decade+ ago.

 

[Brian]

I think there's a solid argument that Jay Rasulo is a major part of their current problems, especially regarding the parks.

They may not be so far behind in capacity etc. if someone other than him had been in charge a decade+ ago.

Perhaps, but if he were the only one with the investment philosophy (or lack thereof), the problem would have been resolved within a few years of his departure. This $60 billion investment is a long time coming, something Peltz points out as part of his campaign.

Iger was CEO while Rasulo was P&R chairman, and later promoted to CFO. Surely Iger, at minimum, was satisfied with Rasulo's philosophy.

 

[Trauma]

I want to address your Netflix comparators. What do you think Disney’s goal is and was regarding streaming? Is the only benchmark of success for streaming to be the biggest player?

Netflix already has a market cap higher than the entirety of the Disney company. I personally don’t think it’s healthy for the company to become a streaming performer only and a studio/parks company secondarily. The goal really doesn’t need to be for Disney to scale to Netflix. The goal is to be a secondary moderate choice. That’s where I think Chapek and Iger most differed. Iger under-launched the service and Chapek had sudden visions of being Netflix, with the content spend torrent to follow.

The path forward for D+ is the one they are on. Folding Hulu in eventually - which address the (largely only American problem) of the service not feeling robust enough. Have a moderated amount of high quality content. More than a single Mandalorian show as your keynote for the year, less than milking every IP to death or flooding the service with anything to see what sticks (Netflix).

The way forward is exactly what they are on. Price increases have also contributed towards profitability with a largely stable core subscriber count. Future moderate price increases (like a dollar annually) ensures a good distance from Netflix (that is almost twice the price) - while being able to both increase content spend and also grow profits.

I really think they are on a good pathway and while DTC isn’t a 300 billion buisness for Disney, it can be a very solid 100 billion dollar one along with their other segments holding equal weighting.




Precisely. Out of exuberance and stupidity, Chapek leaned into the hyper fixation on subscriber count and basically pied-pipered Wall Street with an absolutely wallop of empty Hot Star subscribers. Disney weathered the Pandemic magnificently better that it ought to have (compared to P&R focused companies like cruise lines)… but we are still paying the price for that misdirect.

Well my problem with your thinking is simple. If D+ is to be a secondary moderate choice shouldn’t its pricing match that title ?

D+ is approaching profitability with price increases. The price is basically the same as Netflix now.

So long term will people be willing to pay the same for a secondary streaming service that they are for Netflix?

 

[UNCgolf]

Perhaps, but if he were the only one with the investment philosophy (or lack thereof), the problem would have been resolved within a few years of his departure. This $60 billion investment is a long time coming, something Peltz points out as part of his campaign.

Iger was CEO while Rasulo was P&R chairman, and later promoted to CFO. Surely Iger, at minimum, was satisfied with Rasulo's philosophy.

I agree that Iger was fine with Rasulo's decisions, which is one of the many reasons I'd like a new CEO.

But I don't see how bringing someone in who has a similar philosophy would be at all helpful -- especially since it's probably an even worse one. Iger at least seemed to accept they actually did need more capacity etc. once Rasulo was gone.

 

[Animaniac93-98]

If I may (and I don’t actually hold either opinion very strongly for the record), what makes Universal immune from the criticism?

USF is a shell of its former self. Almost everything original has been destroyed. It’s arguably now the park in the sorriest state of rot, since former holders Epcot and DHS have maybe slightly taken half steps ahead. At the very least I suspect less of those parks are going to need replacing in an immediate window.

Universal is all in on the IP trend, something felt most tied to WDW’s decline. Even as a value proposition, Universal has essentially gone from ‘the deal’ to more pricing parity.

Is it just more affinity for WDW? Is it just enough shiny objects from new investment to sufficiently distract for the loss? Is it less history or appreciation for Universal at baseline so it is less prone to nostalgic bias? Is it simply a lower benchmark for Uni?

I actually think I had more childhood affinity for Universal ironically enough and notice more of what USF isn’t these days. I still like it well enough.

USF is the worst Universal park I've been to. Both Singapore and Japan are better (Japan is the best single gate).

I first visited in 2003. That was an in between time where Jaws, Back to the Future and Earthquake were still there, but Kongfrontation, Hitchcock and Hanna Barbara had closed. Today, Mummy and ET are the only rides I really care about.

I don't have the same level of nostalgia or reverence for the park. By design, it was a park made of disposable, geographically based facades and large boxes to make it easier to change the attractions every 10 years. It's Telling now that they want to move away from that kind of design philosophy. "Ride the Movies" was their slogan from day one.

I think IoA is the best park in Orlando, and Volcano Bay the best waterpark. The onsite hotels are cheaper than Disney, and so are the APs and most multi-day tickets. The resort is more walkable than WDW and I don't spend as much time on buses. It's also closer to the airport, SeaWorld and OCCC.

Epic Universe is an exciting blank slate that doesn't have the baggage of what was there before, and whatever flaws it may have at opening, can only grow from there.

If USF was a stand alone park, I would skip it, but the growth and additions to the resort as a whole have benefitted me. Most of my time spent at UOR is outside of that park, and will remain so after Epic opens.

 

[Brian]

I agree that Iger was fine with Rasulo's decisions, which is one of the many reasons I'd like a new CEO.

But I don't see how bringing someone in who has a similar philosophy would be at all helpful -- especially since it's probably an even worse one. Iger at least seemed to accept they actually did need more capacity etc. once Rasulo was gone.

Iger changed his mind - I'm confident Rasulo is capable of doing the same. Let's not forget it's been nearly 10 years since he left Disney, and a lot has changed both internally and externally.

By joining onto Peltz's campaign, I would assume he, at minimum, tolerates Peltz's position that investment in the parks (including the $60 billion) is necessary to stay competitive, if not agreeing with it.

 

[BrianLo]

Disagreed. My interpretation is that so long as the $60 billion can lead to sufficient ROI, it is both appropriate and necessary to maintain competitive advantage, and they're already late to the party with it.

Then that isn’t an actual strategy either? If they aren’t going to change a single thing, what are they adding?

Peltz has no knowledge of parks and Rasulo is whom he’s hitched himself to in terms of judging what they push for parks.

He has no knowledge of movies… so goes out and hitches himself to perlmutter for guidance? It’s laughable, Peltz has already shown all the incompetence we needed to see.

For the record I think every valuable maneuver Peltz was after that wasn’t damaging to long term shareholders, Iger has enacted in response. The value of the corporate raiders at the doorstep has now been realized.

We’ll agree to disagree. You don’t use language like that (whooping) to suggest their suggested 60 billion isn’t enough. If nothing else Peltz is not advocating for them to spend even more…

 

[mikejs78]

Disagreed. My interpretation is that so long as the $60 billion can lead to sufficient ROI, it is both appropriate and necessary to maintain competitive advantage, and they're already late to the party with it.

That's laugjable. You have to look at the whole statement and understand exactly what Peltz is saying. The statement they make on ROI for the parks is about a high single digit increase to operating income. Not revenue, not gross profit, but operating income.

Operating income is not the metric you use when talking about expansion and growth of the business. You typically focus on revenue growth (sometimes at a loss at first) or gross profit increase, as the gross profit is directly related to the cost of the service. Once you establish those, then you typically optimize to grow operating income.

The typical way to achieve operating income growth is a) to charge more, or b) to cut expenses. Focusing on operating income is right out of the Rasulo/Perlmutter playbook. I guarantee that using that metric will result in investments in pure profit plays - more DVC/hotels, up charges, more things like Genie+ and ILL.

That's the type of investment that they will be looking at. Not new attractions, transportation methods, etc - but things that can directly generate high returns at low costs.

 

[Sirwalterraleigh]

Exactly. Perlmutter was Chapek's mentor, turned him into the cost cutting / value engineering person he was. He also lobbied for Chapek to be the next CEO, and used his large # of shares as influence. It is also understood that he lobbied against both Stages and Meyer for the CEO positions.


Perlmutter is also backing Peltz and Russulo with his stock - and is the one responsible for pushing the proxy fight. Peltz would not have nearly enough stock without Perlmutter's shares.

Christ…Bob quit on newsdump with he was scared

A trained circus dog would have been ceo…Chapek just happened to be there.

You didn’t notice the “I’ll quit…but I’ll just be hanging around?”
Best move since Jay Leno.

Anyway…there was no successor because Bob didn’t want it. Period. The history is written. All that stuff about board proxy is silly. Bob controls the board.

Throwing Peltz and Rasulo out the window…the real problem remains.

After last weeks antics…and last years TERRIBLE business receipts…it’s time to let the truth have its day

 

[Sirwalterraleigh]

It’s Super Bowl Sunday. Jesus Christ.

So if people talk about it tomorrow…that gonna change something?

Who’s playing anyway?