On March 4, a long-awaited comprehensive document was unleashed in the ongoing proxy battle between Bob Iger’s Walt Disney Company and Nelson Peltz’s Trian Partners.
Nelson Peltz via David Rubenstein YouTube
As we’ve noted in the past here in our research of how Peltz, for whom this is not his first corporate rodeo, goes about his process of explaining to voting shareholders how he sees things and why he and his group are a good choice to fix a company’s problems, the issuance of what is known as a “White Paper”—a comprehensive report on the subject company’s past, present, and their two alternative futures—with Trian’s help and without.
This is a 132-page epic document and of course I’m not going to attempt to delve into the details in this relatively short and, I hope, palatable article. I very, very strongly encourage you to read it for yourself.
He Who Remains (Jonathan Majors) in Marvel Studios’ LOKI, exclusively on Disney+. Photo by Chuck Zlotnick. ©Marvel Studios 2021. All Rights Reserved.
But while our videos and other resources will go further with this and the continuing conflict, I’d like to make some general statements about this amazing document that I hope may encourage you, whether or not you’re a stockholder who gets to vote (using the infamous Blue or White cards) in the shareholder election, to read it because despite the length and complexity, it is cogent, understandable, and frankly better than 99% of the best-seller novels you may have in your Kindle as alternatives.
It is damning. It is comprehensive. And it is VERY VERY focused on the fact that the Board (not wokeness, not creative executivess except that they’re unsupervised by the board, not all the rest of the DEI/ESG controversial baggage we KNOW exists) is to blame for the poor performance. It is, in short, brilliant. But then we expected that.
Bob Iger via New York Times Events YouTube
ANYONE could look at the numbers and facts presented and see what’s wrong at Disney. THIS goes further and explains (a) why and (b) whose FAULT it is. It not only says Trian’s board candidates can do better than those on the board they’d replace and advise those remaining, it completely impeaches Bob Iger’s ability to make ANY case for his side because it shows how his experience, guidance, and management has been so completely flawed and has caused the rot.
“It isn’t personal, it is just business” may be the tone, but the FACTS presented are VERY personal indeed. Basically the summary of this entire document is as follows:”The Emperor Has NO Clothes And He’s Costing You Money.”
Bradley Cooper and Bob Iger attend the Guardians of the Galaxy Vol. 3 Premiere at the Dolby Theatre in Hollywood CA on Thursday, April 27, 2023.
(Photo: Alex J. Berliner/ABImages)
And do you know another brilliant thing about this–well TWO brilliant things?
1. It is what we call in the book/fiction business a “page turner”–it draws the reader in and keeps grabbing them and never beats any dead horses or allows ennui to set in. It is a story you are compelled to follow to the end.
2. IF, as I’ve surmised, both sides realize (as evidenced by their solicitations) that the big investors have all made their bets and voted their appropriate colored cards by now, and therefore that the “audience” for any appeal at this point is the small investor–millions of moms & pops, local brokers. small fund or pension managers, etc. etc. who, in aggregate, hold the deciding balance of votes in their hands, well, this on-the-one-hand highly technical document is still enormously readable and accessible without a finance degree or much Wall St. or corporate experience. It is clear, it is readable, and it makes its case no matter WHO you are (and along the way it MIGHT suggest to some of the bigger players that they should swap to blue or look ridiculous/unprofessional/stupid if they do not.)
Nelson Peltz via David Rubenstein YouTube
It is very clear from the strategic use of quotes from Bob Iger and the Disney statements that if this change does NOT happen, things will continue the way they have–in the red. You are left with no other conclusion to draw. In short, vote blue or sell your stock and take your losses, because in the words of the old over-used adage, doing the same thing (or letting, if not encouraging, Bob to do it) and expecting positive change is….insanity.
No rational human being who can read and comprehend English can draw any other conclusion from this. And while this is partly due to great, disciplined, comprehensive, and convincing argument and storytelling…well, it sure helps when the story is so clearly, unequivocally, and utterly TRUE.
Bob Iger | 2019 Disney Legends Awards Ceremony | D23 EXPO 2019. Photo Credit: nagi usano from Tokyo, Japan, CC BY-SA 2.0 <https://creativecommons.org/licenses/by-sa/2.0>, via Wikimedia Commons
Oh, and the “red” in my title above? It is, of course, red ink. Gushers of red ink. The bottom line being that’s the color that reflects Disney’s present…and potentially the future, too, if things do not change.
So enjoy our upcoming and ongoing coverage, but if you REALLY want to understand how deep, longstanding, and destructive of the Disney we all have loved the management of the current CEO and Board have been, go ahead and give that link a click and pull up a comfy chair and a cup (or glass) of your favorite beverage and dive right in.
I think you will be glad you did.
Nelson Peltz via CNBC Television YouTube
A GLOSSARY OF TERMS IN THE WHITE PAPER that will help you read it knowledgeably. Although these are fairly common, sometimes the abbreviations leave non-pro’s a bit overwhelmed, so here are the most important ones:
EPS: Earnings Per Share (how much they make per share of stock–obvious, right? Right)
TSR: Total Shareholder Return (a measure of how much you make as an investor calculated by taking the change in share price, throwing in any total dividends, and then dividing it by the share price at the beginning of the period of your investment)
FCF: Free Cash Flow (a measure of company health that reconciles company income by adjusting for non-cash expenses, changes in working capital, and capital expenses)
And lastly, not a financial term but one related to streaming, DTC: Direct to Consumer (selling your product/programs via your own system like Disney+ versus being a “wholesaler” and licensing that content via Netflix or Amazon or the like.)
Bob Iger via New York Times Events YouTube
