Disney Investors Regret That CEO Iger Wasn’t Kicked Out

By Douglas A. McIntyre Published May 8, 7:05AM EDT

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Disney Investors Regret That CEO Iger Wasn’t Kicked Out — © Kimberly White / Getty Images

Raider Nelson Peltz had a proxy war with Walt Disney Co. (NYSE: DIS | DIS Price Prediction). 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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About the Author Douglas A. McIntyre →

Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.

McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.

His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.

A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.

TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.

McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.