Disney management is now in the hot seat to correct what has been a dramatic collapse in overall profitability along with abysmal share price performance over the past five years.
Peltz and his team have done an excellent job articulating what has gone wrong at Disney across the entertainment conglomerate’s sprawling operations. This includes a broken creative process that stifles dissenting viewpoints, the subordination of shareholder interests to woke ideological objectives resulting in several box office disasters, a bloated central office, and a series of strategic miscalculations.
Even the crown jewel of Disney—it’s Experiences segment, which includes theme parks, cruise ships, and merchandising—is now at risk thanks to consistently aggressive price hikes and new competition from Universal in Orlando starting next year.
The real losers of the proxy battle may ultimately be all Disney shareholders and perhaps even Iger himself, as the board will not have the benefit of Peltz’s independent perspective and constructive criticisms.
The drama of the proxy battle may be over, but essential questions around Disney as an investment proposition remain unanswered. Is it a turnaround story? Or a sinking ship?
