Disney Meets an Enemy

By Douglas A. McIntyre Published Dec 15, 9:25AM EST

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Disney Meets an Enemy — © Valerie Loiseleux / iStock Unreleased via Getty Images

Aged corporate raider Nelson Peltz wants two Walt Disney Co. (NYSE: DIS | DIS Price Prediction) board of directors seats. One is for him, and the other is for former Disney CFO Jay Rasulo. Peltz is an old hand at attacking boards at companies he considers mismanaged, including Heinz and Procter & Gamble.

Peltz believes current CEO Bob Iger, who was CEO once before, has wrecked Disney and driven its stock down 37% in the past two years, while the S&P 500 gained 2%. The stock might be even lower without Peltz at the gate of Disney with a plan to improve its financial prospects.

Peltz sees in Disney what many other investors do. It has some of the best brands in the world but has run them badly. Its streaming video business, led by Disney+, has a remarkable 160 million subscribers, but it has lost billions of dollars in a sector controlled by Netflix and Amazon. Powerful competition, including Apple+, will make the business even more competitive.

Disney’s studios have had a string of disappointing movies. These include, according to Variety, “The Marvels,” “Indiana Jones and the Dial of Destiny” and “The Haunted Mansion.” (See which are the 50 best Disney movies of all time.)

Disney’s legacy businesses are also in trouble. ABC, which gets most of its money from the traditional advertising business, operates in a sector dominated by Google, Facebook and Amazon. ESPN is trapped because cable companies are less willing to pay large fees for its content.

Disney’s theme parks remain the anchor to its success. But it has raised ticket prices recently, and there is anxiety that this will reduce the number of visitors.

Nelson Peltz has not publicly stated his plans for Disney if he gets board seats. Undoubtedly, he will push for Disney to auction off its weakest businesses. And, as is usually part of the playbook to increase the share price, many people will be laid off.

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.