Nelson Peltz Pushes for Disney Board Seats

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Billionaire Nelson Peltz, the founder of Trian Partners, has significantly increased his stake in Disney and is gearing up to reignite his campaign for board seats at the renowned US entertainment group.

Following Trian’s decision to call off its battle against Disney earlier this year, Peltz has augmented the firm’s position in Disney, now valued at more than $2.5 billion. The plan is to seek representation on the Disney board, including a seat for Peltz himself, according to sources familiar with the matter.

One source emphasized Trian’s belief that Disney’s shares are undervalued and that the board needs to demonstrate increased focus, alignment, and accountability. While Trian declined to comment, reports of Peltz’s renewed bid for board seats were first disclosed by the Wall Street Journal.

Peltz previously withdrew from the fight against Disney shortly after Bob Iger returned as CEO and the company introduced measures to streamline operations, including workforce reductions and the reinstatement of the suspended dividend. Trian had earlier criticized Disney’s succession planning process, questioned cost inefficiencies in its streaming business, and scrutinized its 2018 acquisition of 21st Century Fox.

Despite Disney’s shares falling by 25 percent since February, Trian has significantly amplified its stake, now owning more than 30 million shares compared to 6.4 million shares in August, as per the sources.

Peltz aims to assist Disney in aligning its overheads and devising a clear strategy for the future, particularly with respect to its streaming operations. Like other major streaming services, Disney has faced pressure to curtail spending on TV and film content, especially considering concerns about the saturation of the streaming market.

Moreover, the company’s direct-to-consumer streaming segment, including Disney+, incurred substantial losses last year, with projections for returning to profitability by 2024. Challenges stemming from underwhelming movie releases and disruptions in the entertainment industry have further compounded Disney’s position.

Amidst questions surrounding Disney’s key assets, including streaming service Hulu and sports network ESPN, Peltz’s perspective remains against the sale of the sports network, as indicated by sources familiar with his views. While uncertainty looms over the future of Hulu, with Disney expected to buy out Comcast’s stake, investor concerns persist regarding potential appraisal costs.

The television business, although still profitable, has encountered setbacks from intensified competition and declining advertising revenues. With Iger’s extended contract and his acknowledged acknowledgment of the challenges ahead, the dynamics within Disney remain in flux.

Should Disney reject Trian’s proposal for board seats, the activist investor could present its candidates for shareholder approval at the company’s annual meeting next spring.