Raider Nelson Peltz had a proxy war with Walt Disney Co. (NYSE: DIS). Had he won, he would have gotten at least two board seats, which would have given him an inside track to steer or eliminate senior management. He lost. Some accounts say he made $300 million in his fight with the Disney board. He said it was closer to $1 billion. No matter how much he made, CEO Bob Iger stayed. Iger was the head of the vast entertainment company from 2005 to 2020 and returned in November 2022.

Bob Iger’s Legacy

Iger was considered a strong chief executive the first time around. He made acquisitions that built the company into an entertainment behemoth. These included Pixar, Marvel, Lucasfilm, and 21st Century Fox. These helped build successful movie franchises and turn Disney’s studios into the perennial market share leader in the United States and a profit machine worldwide. (If You Invested $15,000 in Disney 10 Years Ago, This Is How Much You Would Have Today.)

However, Iger made a colossal mistake when he started the streaming service Disney+. Launched in November 2019, it has lost billions of dollars. One large misjudgment was that it was priced at $6.99 monthly, well below much of what became its competition, notably Amazon Prime Video and Netflix. Even though subscriptions reached over 150 million, it took Disney years to get subscription prices to a level that would be profitable. The price increases may have worked. Disney+ almost broke even in the latest reported quarter.

The stock market did not expect Disney’s money-making machines and theme parks to face inflation, which included labor costs. Chief Financial Officer Hugh Johnston said, “While consumers continue to travel in record numbers, and we are still seeing healthy demand, we are seeing some evidence of a global moderation from peak post-Covid travel.” Disney’s shares dropped the most in over a year, down by almost 10% to $105 apiece.

What Could Have Been

Would Peltz have made a difference in Disney’s theme park results now or in the near future? Obviously not. But Peltz, who has a reputation as a cost cutter, could have made the earnings effect of the trouble at the theme parks less severe by lowering Disney’s overall costs. Iger’s cost-cutting moves have been half-hearted.

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