Disney Needs A Shakeup at the Top
Disney CEO Bob Iger made a pitch to investors in his most recent public letter earlier this week to support two of Disney’s Board members - Michael B.G. Froman and Maria Elena Lagomasino - over two prospective Board members nominated by activist investor Trian Group (those two being Train founder Nelson Pelz and former Disney CFO Jay Rasulo). I prefer Pelz and Rasulo to Froman and Lagomasino purely from an experience standpoint. Pelz has turned around numerous consumer companies and Rasulo’s experience speaks for itself, whereas Froman and Lagomasino lack industry experience and seem to be two warm bodies that are capable of voting “yes”. You be the judge:
Further, I have an issue with Disney’s $3 billion 2024 share buyback at a time when ESPN clearly needs to acquire sports content. Disney/ESPN has been in bed with the UFC (TKO), majority-owned by Endeavor (EDR) since 2017. Why not acquire TKO when it is the UFC that single-handedly built ESPN+? TKO and EDR are undervalued in my view and Iger chooses to write letters to taking action.
I do like the management shakeup announced earlier this week when Disney decided to combine its studio with the acquired 20th Century studio. More focus on story and less on pushing DEI politics is what’s required from Disney screenwriters and directors.
If there was ever a company that could benefit from a tax-free spinoff it would be Disney. Parks and Content don’t need to be part of the same legal entity as the Content business will never receive a full valuation multiple until it is a pure play, separately-traded entity.
With a little luck Pelz will find his way on the Board. With further luck Ari Emanuel will find himself in Iger’s seat in the not too distant future.