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Disney CEO Bob Iger vanquishes billionaire foe Nelson Peltz in battle over board

Disney CEO Bob Iger on Wednesday fended off an aggressive challenge by activist investors seeking to take the company in a new direction, averting what would have been a stunning embarrassment for one of Hollywood’s leading executives.

The entertainment conglomerate’s corporate leadership was facing a bold attack from billionaire activist investor Nelson Peltz, who loudly pushed the company to come up with a concrete succession plan and derided efforts to make more diverse movies and shows.

But that crusade fell short, as Disney shareholders approved board members backed by the current company leadership, denying seats for Peltz and his ally Jay Rasulo, a former chief financial officer at Disney.

Iger’s victory comes at a key juncture for a company that has found itself at the center of wider American culture wars as it attempts to navigate dizzying changes in the media landscape, including the rise of streaming, the decline of traditional television and growing competition from social media.

During the pandemic, Disney saw its shares climb to all-time highs amid the belief that streaming revenues would surge — but the stock price sank to fresh lows soon after as the company struggled with how to succeed Iger, who left the company in 2020 and then returned two years later.

Today, Disney’s share price, at about $122, is little changed from where it was some 10 years ago — a fact that earned the ire of so-called activist investors like Peltz who buy up shares of companies on the open market in the hopes of installing board members they believe can make decisions that lead to greater investor returns.

Disney’s challenges are real. The heavily marketed Disney+ streaming platform is not profitable, though Iger has said he expects it will be by the end of this year. Business analysts say Disney’s Marvel and Star Wars franchises have lost steam. ESPN, which Disney has effectively controlled since the 1990s, continues to lose traditional TV viewers in the wake of the cord-cutting revolution.

‘They’re trying to do a lot of things at the same time, rather than focusing on one thing and really nailing it,’ Rich Greenfield, co-founder of the LightShed Partners research group, told CNBC last week.

Disney is also paying almost $9 billion to Comcast for Hulu, which has said it plans to relaunch. NBC News is wholly owned by Comcast.

The latest anti-Iger push was led by Trian Partners, an activist hedge fund run by Peltz, a businessman known for investing in or acquiring companies with the goal of juicing their share prices.

In a January interview on CNBC, Peltz laid out his case for overhauling Disney’s leadership, saying that the company was not being run ‘properly’ and that its board lacked oversight.

“They promised they were going to improve things. I took them at their word,” he said. “Things got worse. The stock went down. Results got worse. So, no more. I can’t continue to give them more opportunities.”

Peltz has also railed against Disney’s efforts to produce more diverse and inclusive entertainment. In a recent interview with the Financial Times, for example, he took aim at Marvel projects that he said were too squarely focused on gender and racial diversity.

‘Why do I have to have a Marvel that’s all women?’ he said. ‘Not that I have anything against women, but why do I have to do that? Why can’t I have Marvels that are both? Why do I need an all-Black cast?’

In the run-up to Wednesday’s vote, Disney’s current directors rejected the plan by Peltz and fellow activist group Blackwells, saying that the billionaire ‘had not actually presented a single strategic idea for Disney’ and that he lacked necessary subject-matter experience.

Iger’s regime received public support from boldfaced names such as Star Wars creator George Lucas; JPMorgan Chase CEO Jamie Dimon; Laurene Powell Jobs, the widow of Apple co-founder Steve Jobs; and Disney family members like Abigail E. Disney.

In recent days, Iger also won the support of key institutional shareholders such as BlackRock and T. Rowe Price.

Peltz nabbed some crucial endorsements of his own, however. ISS, a leading proxy advisory firm, sided with the activists and slammed Disney’s succession planning. The California Public Employees’ Retirement System (CalPERS), one of the largest pension funds in the country, backed Peltz as well.

Iger has long been considered one of the titans of the modern entertainment industry, celebrated for his management acumen and creative chops. In his first run at Disney, he turned the company into a global powerhouse by acquiring marquee brands, such as Pixar, Marvel, Lucasfilm and 21st Century Fox.

But that reputation has been dented in his second stint amid high-profile skirmishes with Peltz, tech mogul Elon Musk and Florida Gov. Ron DeSantis, who waged a legal battle against the company after it publicly criticized his state’s ‘Don’t Say Gay’ law curbing classroom discussions of sex and gender.

Iger attempted to rebut Peltz and woo Wall Street during Disney’s quarterly earnings call in February. He announced a range of eye-catching initiatives, including an investment in the maker of the ‘Fortnite’ game, plans to launch a sports streaming service in 2025, and a feature-length animated sequel to ‘Moana’ due in theaters in November.

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