at The Walt Disney Company
Trian’s Case for Change at Disney
Despite being one of the most advantaged global consumer entertainment companies, Disney’s Total Shareholder Return has materially underperformed the S&P 5001:
Source: FactSet as of 1/10/23. (1) Total Shareholder Return (“TSR”) defined as the total return an investor would receive if they purchased one share of stock on the first day of the measured period, inclusive of share price appreciation and dividends paid. We highlight the S&P 500 here only as a widely recognized index, however, for various reasons the performance of the index and that of the securities mentioned above may not be comparable. One cannot invest directly in an index.
Disney’s financial performance has been disappointing post-21st Century Fox deal.
Source: SEC filings. Note: (1) EPS Defined as Earnings Per Share.
Despite Disney’s share price peaking in 2021, it trades near its 8-Year low.
Source: FactSet as of 1/10/23.
Trian believes that Disney is a company in crisis and faces many challenges that weigh on the Company’s investment prospects. We believe that these challenges are primarily self-inflicted and need to be addressed:
Failed succession planning
Minimal shareholder engagement
Strategy & Operations
Flawed DTC strategy
Lack of cost discipline
Using Parks to subsidize streaming losses
Deteriorating returns on incremental investments
Questionable M&A judgement (Fox, Sky)
Increased leverage, eliminating 50+ yr dividend
To create sustainable, long-term value at Disney by working WITH Bob Iger & the Board. Trian recognizes that Disney is undergoing a lot of change quickly and is NOT trying to create additional instability. Trian is:
NOT looking to replace Bob Iger
FOR ensuring successful CEO succession within 2 years
NOT advocating for a break-up of Disney
FOR reinvigorating the Disney “flywheel”
NOT advocating to increase financial leverage
FOR orderly deleveraging
NOT seeking to cut costs that impact product quality or customer experience
FOR driving efficiencies and additional profits
NOT advocating for aggressive price increases at the expense of customers
FOR ensuring customers can get real value across all business lines
NOT advocating for a permanent dividend cut
FOR reinstating the dividend by FY 2025
Read the latest news, letters, press releases, presentations and SEC filings.
Nelson Peltz brings an ownership mentality and track record of long-term value creation.
“…[S]uccession was the failure of Mr. Iger’s first reign. He famously delayed his retirement four times while driving around town with a license-plate frame asking if there was life after Disney. Then he anointed Bob Chapek and watched him flop. Now he’s back to clean up a mess of his own making.”– Ben Cohen (WSJ Columnist; December 1, 2022)
Bob Iger Is Back at Disney to Fix His One Big Failure: Succession
“From day one, Nelson has been a focused, collaborative member of P&G’s Board. Working in concert, Nelson and the Board have constructively provided perspective and expertise to help me and P&G’s senior leaders navigate a challenging external environment and maintain long-term competitive advantage for the benefit of many stakeholders. I’m grateful for his service and the collaborative partnership we’ve developed over the past few years and wish Nelson and the Trian team the best in future endeavors.”– David S. Taylor (Former Chairman of the Board, President and CEO of The Procter & Gamble Company from 2015 – 2022; August 5, 2021)
P&G Press Release
“Keeping [Bob Iger] on point is going to require a stronger board… The worry is that Iger will drag his feet again, and no one is around to hurry him along. Eight out of 11 directors – excluding Iger – were appointed during Iger’s first term as the company’s leader… A refresh gives Disney its best shot at finally finding the next big cheese to take over the House of Mouse.”– Jennifer Saba (Reuters Breakingviews Reporter; December 6, 2022)
Disney’s board needs some magic
“I was personally really happy to welcome [Nelson] on the board, and I have not been disappointed and I think neither has the rest of the board. He is constructive, he is very insightful and of course brings a lot of analytical firepower… I have a lot of respect for his points of view…”– Nils Anderson (Chair of Unilever from 2019 – Present; December 10, 2022)
Unilever Investor Event 2022