Trian and Bob Iger Fighting Again After Nelson Peltz Called The Disney Plan “Spaghetti-Against-the-wall”

Published: February 16, 2024

It seems that the Walt Disney Board and Nelson Peltz are bickering again. This time, the Trian group sent out a letter to Walt Disney shareholders questioning Disney CEO Bob Iger’s recent announcements and “plan.” Ultimately, saying the company is still not doing well, their forward-looking plans are not fully formed, and it was just a “spaghetti-against-the-wall” tactic to razzle dazzle shareholders. 

Disney, of course, responded with a letter of their own. 

It started yesterday after Trian sent a letter out to shareholders and posted the same letter on their website.

In the letter, the investor group discusses Bob Iger’s plans for 2023, which included “a plan to ‘succeed at succession,’ reignite the Company’s creative engine, and achieve profitability in the streaming business.

Then they bring up that not much has changed in the past year, saying, “Disney’s stock price is lower now than a year ago; its streaming business lost another $1.7 billion; 2024 earnings per share estimates are down nearly 20%; two of Disney’s last five movies have failed to turn a profit; and the Board has still not identified a successor for Mr. Iger.

The letter goes on to say:

“With the stock waning and Disney facing another proxy contest, Disney appears to again be trying to distract shareholders with what we see as a fanciful tale, claiming it has “turned the corner and entered a new era.” And with that, Disney announced a slew of new promises and ideas — most still in the process of being developed — hoping that shareholders would just believe all was well and improving.

In the letter, Trian calls out the new $1.5 billion investment into Epic Games and Fortnite as well as the sports streaming collaboration with Warner Bros. Discovery and Fox

This time, Disney’s spaghetti-against-the-wall “plan” includes a $1.5 billion-dollar strategic investment that, according to Disney’s own Chief Financial Officer, lacks a product roadmap or expected return targets, and a sports streaming venture that likely confused consumers, surprised important content partners and competes with the Company’s own services.

But frenetic activity, in the face of a proxy contest is not a substitute for a well-considered corporate strategy. Nor is throwing spaghetti at the wall going to feed shareholders who have been starved of returns for so long.

(You can read the entire letter here.)

In response, the Walt Disney Company put out yet another statement arguing that the current leadership is the best choice for delivering in the future. 

Delivering ambitious growth plans requires leadership with a deep understanding of the company’s current strengths and assets,” the letter said. “Disney’s board has the range of talent, skill sets, experiences, and professional backgrounds that are particularly relevant to the company’s business and strategic objectives.”

With Bob Iger at the helm, alongside the Board of Directors and senior leaders, the company is intensely focused on building for the future,” the Disney letter said. Illustrated with an array of color photographs and graphics with key financial stats, the letter went on to say that the company’s strategic plan is “already delivering results.

However, it was the current board and Bob Iger who put the company in this place to begin with. They keep talking about their new plan bringing results, but they ran it into the ground first. If they could drive the stock up when their backs were against the wall, why didn’t they do it before?  But I digress. 

So, the battle continues and will continue until the Annual Shareholder meeting on April 3, 2024.

What do you think? Comment and let us know!

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