Disney Shareholders Reelect Full Board

To a victory now for the head of Disney in this very high profile proxy war. It's like boardroom drama that feels straight out of the show's succession. You had Bob Iger winning enough votes in a board meeting today, big deal board meeting, to beat back this really aggressive challenge against the board of directors. The challenge put in place by the guy you see here, Nelson Peltz. He's this billionaire activist investor. He's been critical of Disney for a whole bunch of things, including losing money, including not having, in his view, a good enough succession plan for CEO. (00:32) But all of this, this victory late today, just this afternoon, it means that Iger has avoided what would've been a really embarrassing loss. Still, he's under pressure to solve some of the problems he's been facing since 2022 when he came back to Disney, even after his, quote, unquote, "short-lived retirement", replacing his hand-picked successor. Chloe Melas is joining us now. It's good to see you again.

Good to see you too.

So listen, talk us through it because Nelson Peltz, obviously not successful in trying to infiltrate Disney's board, if you will, but there was a lot of money spent. This was expensive. Talk us through the dynamics at play and where this goes.

So Nelson Peltz, he's this activist investor. And this is not the first time that he has tried to secure board seats because he has not been happy with how Bob Iger has been running Disney. He feels like the stock is down, viewership is down on the streaming platforms. And that he wanted to put himself and another individual who actually used to work at Disney on that board. Well, obviously not successful. And during this time, both sides spent a total of $70 million on this proxy war, even Disney putting out this political ad-style video in order to try to convince people that, "No, we don't want Nelson Peltz. We don't want that." Now, obviously they were successful. And Bob Iger was having all of these closed-door meetings. (01:48) And some of the people that came out and supported him, Star Wars' creator, George Lucas. You had Jamie Dimon. You also had Lorraine Jobs, the widow of Steve Jobs. You had all these individuals that rallied around Iger, but then you obviously had some people that were supporting Peltz as well. But obviously, it didn't just get him ... The support wasn't enough to get him those board seats.

But some of the things that Peltz and his allies raise, they're real challenges for Disney. What's the plan on that front?

Well, first of all, one of the things that Peltz has brought up is that what is the succession plan for Bob Iger? Bob Iger, he left Disney. He came back to Disney. But he can't run it forever. And he has said, "I am leaving Disney at the end of 2026." Nelson Peltz's attitude is, "Well, what's the plan for a successor? I don't see you having a clear plan. And because of that, stocks have been down. And also, what's the deal with viewership?" Disney+, the streaming platform, has not been profitable. Although Bob Iger has said it will be profitable by the end of 2024, he is bullish on that. Now, also, business analysts have said that Disney's Marvel and Star Wars franchises, that they have lost steam. Nelson Peltz also said, "Why is Disney leaning so heavily into diversity? Why are there these all-female casts?" And he said other very upsetting comments that upset a lot of people. (03:07) And then obviously, ESPN numbers have been down. Traditional viewing of television is on the decline, right? People aren't necessarily sitting on their couch and turning on cable TV. But all the cord cutting that's been going on. And so that is something else that Peltz has said, "Look, how are you going to help get people watching streaming? How are you going to raise the numbers here?" And so this has been ... In some respects, some of the things that Peltz has mentioned are understandably concerning for shareholders. What is the succession plan? (03:37) But now you see in the statement, the board members are clearly breathing a sigh of relief. They said, "Look, this is a big distraction. We're going to focus on the work, focus on getting our numbers up, our profits up. And that this has been an unfortunate proxy war that has cost us tens of millions of dollars." And the other thing I just want to point out though is that at one point, there were rumblings that Iger was going to sell ABC News for profit or to cut the losses and to help build some profit for himself. And obviously, he didn't do that. And he has doubled down and said that ABC News is here to stay.

Yeah. He's walked that back for sure in a story that's just getting so much attention. Chloe Melas, we're glad to have you covering all of it for us. Thank you.