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Episode: Disney Under Seige | Peltz Strikes Back | 2

Author: Wondery
Duration: 00:34:10

Episode Shownotes

When CEO Bob Iger fails to reassure Wall Street about his plans for Disney’s traditional TV operations, Nelson Peltz seizes the chance to launch a fresh attack on the Magic Kingdom. And this time, he won’t back down.Be the first to know about Wondery’s newest podcasts, curated recommendations, and more!

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Full Transcript

00:00:00 Speaker_05
Wondery Plus subscribers can binge all episodes of Business Wars Disney Under Siege early and ad-free right now. Join Wondery Plus in the Wondery app or on Apple Podcasts.

00:00:19 Speaker_05
It's July 2023, and the most powerful executives in the world of media, finance, and tech are in Idaho for the annual Sun Valley Conference, an invite-only gathering where billionaires mingle, talk trends, and initiate mega-deals.

00:00:34 Speaker_05
And among those attending is Disney CEO Bob Iger. The 72-year-old follows his assistant through the resort hotel. He's wearing a designer pullover while holding a plastic bottle of water. He waves, nods, and smiles at the familiar faces he passes.

00:00:51 Speaker_05
The assistant quickly turns to brief him while they walk. Okay, we got CNBC next. David Faber's interviewing. Likely questions will be latest results, stock price, linear television. Iger nods.

00:01:04 Speaker_05
It's been eight months since he returned to Disney and the honeymoon's over. He might have warded off Nelson Pelt's attempt to stir a shareholder revolt, but the turnaround he promised is yet to happen.

00:01:15 Speaker_05
Disney's stock price has fallen 16% in a year and investors are questioning if Iger's up to the job.

00:01:22 Speaker_05
So he's planning to use an interview with CNBC's show Squawk Box to reassure Wall Street that he's not some old media dinosaur pining for the glory days of broadcast and cable TV. The assistant leads him out of the building.

00:01:38 Speaker_05
On the courtyard, he sees CNBC's setup. Three cameras and two camping chairs arranged so viewers will see the mountains of Idaho in the background.

00:01:47 Speaker_05
Iger greets Faber, raises his arm so a sound engineer can wire him up with a microphone, and settles in for an interview. Cameras roll. Faber checks his notes and looks at Iger.

00:01:58 Speaker_08
Let me ask you about it. We're talking, I guess, ABC, the network, the stations, but then the cable networks as well. Yes. FX, NatGeo. Is it possible you would look to sell them?

00:02:11 Speaker_09
We're going to be expensive. I think if you can, you can interpret what that word means. You know, we're just getting at that work, but we have to be open minded and objective about the future of those businesses.

00:02:21 Speaker_09
meaning that they're not core to Disney? That they may not be core to Disney, yeah.

00:02:25 Speaker_09
Now there's clearly creativity and content that they create that is core to Disney, but the distribution model, the business model that forms the underpinning of that business and that has delivered great profits over the years is definitely broken.

00:02:38 Speaker_09
And we have to call it like it is, and that's part of the transformative work we're doing.

00:02:43 Speaker_08
Right. Well, we've been having this conversation for a very long time. Well, I think what I'm saying is it's time. In terms of the erosion of the linear business, and now it's kind of closer to obsolescence?

00:02:51 Speaker_09
Well, as I said, when I came back, one of the things I discovered was that the disruptive forces that have been preying on that business for a while are greater than I thought. And so it's eye-opening.

00:03:05 Speaker_09
There's a reality to it that we have to come to grips with and we have to come to grips with that now.

00:03:10 Speaker_05
Iger wraps the interview believing he got his message out. He's not got his head in the sand. The business model of linear TV is being destroyed by streaming platforms. But he's going to fix it. It's not just investors who heard the message though.

00:03:26 Speaker_05
People working in Disney's TV operations did too. And they now fear they're going to be sold or laid off. And the message didn't reassure Wall Street either. Over the next few days, Disney stock keeps falling. Before the interview, it traded at $90.

00:03:44 Speaker_05
A few days later, it's down to $86 a share, and that's enough to cause Nelson Peltz's attention to snap back to Disney.

00:03:55 Speaker_05
Peltz only abandoned his plan to stage a shareholder uprising five months ago, but with no recovery in sight, he's ready to strike again. And this time, he's going to see out the fight to the very end.

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00:06:13 Speaker_05
In the last episode, a sickly Disney brought back former CEO Bob Iger.

00:06:18 Speaker_05
Activist investor Nelson Peltz threatened a proxy fight pushing Disney into billions of dollars of savings, and Iger fired Peltz's close ally Ike Perlmutter, the billionaire who ran Marvel. But Peltz isn't gone.

00:06:32 Speaker_05
His investment fund Tryon Partners is still a major stockholder. And with Iger struggling to fix Disney's problems, he's poised to attack again. This is Episode 2, Peltz Strikes Back. November 19th, 2023.

00:06:54 Speaker_05
The Walt Disney Company's office is in New York City. In an executive meeting room, Try & Partners co-founder Nelson Peltz is face-to-face with Disney CEO Bob Iger.

00:07:05 Speaker_05
It's been four months since the Sun Valley Conference in Idaho, and Disney's still struggling. So Peltz is back, trying to get put on the board of directors. Bob, I want us to work together to refresh the board.

00:07:20 Speaker_05
We bring expertise that Disney can benefit from. You know this. I'm not sure I do. Okay, well let me lay my cards on the table here. Sure. Tryon is now the beneficial owner of approximately 33 million shares in Disney.

00:07:35 Speaker_05
That's more than 3 billion dollars worth. Iger looks a little disturbed by this news. Back at the start of July, Tryon had just around 6.4 million shares. Now, I should point out that 25 million of that stock is Ike Perlmutter's.

00:07:50 Speaker_05
He's entrusted us with managing his stock in the hope that we can revive it. Iger tenses at the mention of Perlmutter, the former Marvel owner who he fired earlier in the year. Are you planning to nominate Ike for the board?

00:08:04 Speaker_05
Oh, no, no, Ike doesn't want that. But I'm glad you mentioned board composition. Tryin' needs representation on that board. As you'd expect, I am primary nominee for our side. We've been through this, Nelson.

00:08:19 Speaker_05
In February, you heard my plan for transformation. You praised it and abandoned your proxy contest in response. I don't see what's changed. Pelt sits forward. There. That in itself is the problem. You don't see it. I do. The problem is nothing's changed.

00:08:37 Speaker_05
Nothing. When I called off the proxy contest, it was because we had confidence in the company's commitment to a substantive long-term turnaround. That commitment remains. Maybe. But our confidence in that commitment doesn't.

00:08:51 Speaker_05
The progress toward a successor CEO is glacial, streaming still unprofitable, and the stock price, it's bumping around at its lowest level for the past nine years. All that underscores why Tryon needs representation on the board.

00:09:06 Speaker_05
Enhanced accountability in the boardroom is what's needed. And what would you bring to the board? The shareholders perspective, that's what. Disney's the largest media business by revenue, but its margins lag behind its closest peers.

00:09:20 Speaker_05
We need to be on the board to address that. I request that you add me to the board plus two independent directors that we both agree on. What if the board brought in other independent directors? Instead of? Instead of you.

00:09:36 Speaker_05
I didn't buy into Disney just to watch from the outside. I can do that for free. Iger crosses his arms. It's clear that if the board rejects Peltz, Disney's facing another fight. Nelson.

00:09:49 Speaker_05
A proxy war will be a major distraction from transforming the company. That's what they all say. Well, I've heard you, and I will take your proposal to the board to consider at its next meeting. And what will you recommend they do?

00:10:04 Speaker_05
Will you recommend they bring me in? Iger pauses for a moment then replies, I'm not sure I can, we'll tell you what the board says.

00:10:14 Speaker_05
Peltz nods, but he can already sense that Disney is dead set against letting him in and a proxy war is the only way forward. After the meeting with Iger, Tryon sends a letter to Disney's board.

00:10:34 Speaker_05
The letter reiterates its request for putting Peltz onto the board along with two independent directors agreed by Tryon and Disney. It also lists the hedge fund's main beefs with Disney's performance.

00:10:46 Speaker_05
The share price decline, shrinking earnings per share, the lack of a clear CEO succession plan, the ongoing streaming losses, and box office disappointments like the recent superhero movie The Marvels. but Disney's board isn't swayed.

00:11:04 Speaker_05
The following week, Iger informs Peltz that the board saw no reason to make him a director, but offered to let him make a presentation to the board on his ideas for change.

00:11:13 Speaker_05
Peltz declined, saying there's no point if the board isn't willing to consider appointing him to the board. So on November 30th, 2023, Tryon notifies Disney that it intends to nominate Peltz for election to the board of directors.

00:11:29 Speaker_05
It's the starting gun on a five-month election campaign that will culminate with a shareholders vote in April. And if Peltz wins, it'll be a sure sign that investors have lost confidence in Eiger and the current Disney board.

00:11:44 Speaker_05
But Disney is already raising its defenses. in tandem with its decision to rebuff Peltz's advances. The board has approved new bylaws making it harder for outside parties like Tryon to nominate candidates for the board.

00:11:58 Speaker_05
The board's also approved a cash dividend for stockholders. It's a payout that should help make stockholders feel warmer to the company's leadership.

00:12:08 Speaker_05
The Disney board also announces it has already won the support of Value Act Capital, a San Francisco investment fund that has a sizable stake in Disney. But Peltz has friends, too.

00:12:20 Speaker_05
The Ohio hedge fund Ancora Holdings throws its weight behind the 81-year-old activist investor. Then, Tryon reveals its second nominee for the Disney board, Jay Russullo, Disney's former chief financial officer.

00:12:34 Speaker_05
Russullo resigned from Disney in 2015 after missing out on a promotion to chief operating officer. And his inside knowledge of Disney Helps makes the Peltz ticket more credible.

00:12:47 Speaker_05
But Peltz must do more than convince institutional investors to back Tryon's alternative nominees. He must also win the votes of retail investors, the non-professional investors who own more than a third of Disney's stock.

00:13:06 Speaker_05
January 11th, 2024, Orlando, Florida. At Disney's Hollywood Studios at the Walt Disney World Resort, Nelson Peltz is blending in. He's wearing a hat with Mickey Mouse ears and carrying two balloons.

00:13:20 Speaker_05
A Tryon executive raises his smartphone to capture the moment. Say cheese. Cheese.

00:13:27 Speaker_05
Peltz and his team are here for an off-site, and they want to experience the park just as most people do and get an on-the-ground sense of how Disney's prized parks are performing. That, and some handy publicity photos.

00:13:40 Speaker_05
Peltz looks back at the Walt Disney Presents Museum they've just visited, and points a finger. Now that! That was terrific, just terrific! It really brings it home. One of his team looks over. It brings home what?

00:13:55 Speaker_05
How much top-level IP this company sat on. Star Wars, Marvel, Indiana Jones, Toy Story, Aliens. The list goes on and on. It's mind-blowing.

00:14:05 Speaker_05
How can they have the greatest collection of IP in the world and still be struggling to match Netflix on profitability? We should make a point of that. Netflix's margins are 15 to 20 percent. We should press Disney to match that. At least.

00:14:20 Speaker_05
Let's check out the Magic Kingdom next. I'll look at how to get there. As the executive checks the park map, Peltz and the others watch as smiling employees entertain and serve the park's delighted guests. One executive leans towards Peltz.

00:14:35 Speaker_05
I know we said there needs to be more capital spending to freshen up the park, but you gotta credit the operation. Employees here really do smile all the time. It's probably because none of them own any Disney stock.

00:14:50 Speaker_05
But while the group laughs, one Tryon executive speaks up. Actually, a lot may own shares. There's an employee stock purchase plan. Well, then I am shocked that they're still smiling. The executive checking the map looks up.

00:15:07 Speaker_05
Okay, it looks like we can either take a Disney bus or a mini van service to Magic Kingdom. Ready to go? Lead the way.

00:15:16 Speaker_05
With that, Peltz and his team set off towards the Magic Kingdom and its replica of Disney's world-famous Cinderella Castle, the place they're metaphorically laying siege to.

00:15:27 Speaker_05
But they all know that in corporate America the odds are stacked against those trying to stoke stockholder rebellions. Big institutional investors default to supporting the directors nominated by the existing leadership.

00:15:41 Speaker_05
Incumbent boards of directors are able to introduce measures that tip the scales in their favor. But Peltz has faced these hurdles and cleared them before. He also knows that Disney isn't like most public companies.

00:15:55 Speaker_05
At Disney, one share equals one vote, and many of the stockholders are retail investors.

00:16:02 Speaker_05
They're the employees in the park, the families here on vacation, and ordinary folks who dabble in the stock markets, usually by investing in consumer brands they're familiar with.

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00:18:51 Speaker_05
It's January 18th, 2024, and the campaign to win the votes of Disney stockholders is gathering speed, and it's getting personal. Disney's come out swinging.

00:19:02 Speaker_05
It's painting Nelson Peltz's challenge to its board as motivated by revenge, thanks to the involvement of former Disney executives Ike Perlmutter and Jay Russullo.

00:19:12 Speaker_05
But the company's main line of attack is to highlight Peltz's own lack of experience in media and technology.

00:19:19 Speaker_05
But this morning, Peltz is about to respond in kind, and he's using an appearance on CNBC's Squawk Box to question Disney CEO Bob Iger's supersized compensation package. Last year, he got paid $31.5 million, okay? Earnings were down.

00:19:37 Speaker_05
They missed everything. The stock was down. Everything went bad. And he got $31.5 million. You know, I don't understand what this board is doing. I don't know what they're there for other than as friends of Bob. You know, that is what this is all about.

00:19:54 Speaker_05
They are friends with Bob. It is a hand-picked group of directors who are not doing their jobs." But Peltz is no longer the only activist investor stirring up trouble at Disney.

00:20:06 Speaker_05
In the wake of his decision to mount a proxy war, another New York investment fund, Blackwell's Capital, has entered the fray. It's hoping to get traction by offering a middle way between the current board and Peltz's vision.

00:20:20 Speaker_05
It wants to freshen up the board, but stick with the company's existing strategy. So it's now a three-way fight and with just 76 days into the annual shareholder meeting, there's no time to waste.

00:20:33 Speaker_05
They all need to convince shareholders to back their candidates. Disney wastes no time in deploying its army of famous characters to campaign for the existing board. And leading the attack is Donald Duck's Viennese uncle, Professor Ludwig von Drake.

00:20:51 Speaker_01
Friends, relatives, and esteemed chairman, you're probably wondering what we're all doing here today. Now, let's begin.

00:20:57 Speaker_06
Whoa, Professor Ludwig von Drake, slow down there. On April 3rd, the Walt Disney Company will be hosting its annual meeting of shareholders, and we need you to all vote for your board.

00:21:09 Speaker_06
Remember, it's important you vote only for Disney's 12 nominees using the white proxy card. Do not vote for the Tryon Group or Blackwell's nominees. We thank you for supporting Disney.

00:21:21 Speaker_05
In the weeks that follow, Disney deploys more of its high-profile IP and its literature about the fight, including Marvel superhero Iron Man and Moana, the Polynesian Disney princess.

00:21:34 Speaker_05
It also gets Hollywood's elite to pledge support, including Star Wars creator George Lucas and Walt Disney's heirs. But Peltz isn't completely without high-profile backup. February 2024, Los Angeles.

00:21:53 Speaker_05
Outside the Regency Bruin Theater, press photographers jostle for position along the carpet that leads inside the venue.

00:22:00 Speaker_05
Tonight, the theater is hosting the premiere of an indie movie called Lola, and Nelson Peltz is there to see it, but not as a billionaire financier, but as a father.

00:22:10 Speaker_05
And that's because his daughter, Nicola Peltz Beckham, is the film's star, scriptwriter and director.

00:22:17 Speaker_05
But as Peltz walks towards the entrance, it's not him that's exciting the photographers, but the taller man walking by his side, billionaire Elon Musk. The South African tycoon wraps an arm around Peltz and turns to the cameras.

00:22:36 Speaker_05
The two billionaires grin as the cameras flash. They're united against a common foe, Disney. While Peltz has been trying to force his way onto Disney's boardroom, Musk has been lobbing insults at the company and its CEO for months.

00:22:52 Speaker_05
The bad blood between Musk and Bob Iger began a few months earlier when Musk endorsed an anti-Semitic conspiracy theory on his social media platform, X.

00:23:02 Speaker_05
In response, dozens of major companies stopped buying advertising on X, and Disney was one of them. With X's revenues collapsing, Musk apologized and called his post the dumbest thing he's ever shared online.

00:23:18 Speaker_05
But Musk also began publicly criticizing the advertisers who abandoned X, and Disney became his favorite punching bag.

00:23:27 Speaker_05
He's called for Iger to be fired, backed Peltz's campaign to shake up Disney's board and described the company's track record in delivering for shareholders as brutal.

00:23:38 Speaker_05
But while Peltz and Disney's enlisting of big-name backers in this fight gets attention, the real battle is being fought below the media radar in the form of a barrage of direct mail, emails and phone calls to shareholders.

00:23:58 Speaker_05
It's March 2024, and Disney's annual shareholders meeting is less than two weeks away. In Princeton, New Jersey, corporate governance consultant Douglas Chia checks the text that just pinged on his phone. He raises his eyebrows.

00:24:13 Speaker_05
It's a text from Tryon's proxy solicitors, who are leading the effort to contact Disney shareholders and convince them to vote for Peltz and Jay Russullo.

00:24:23 Speaker_05
he has no idea how Tryon got his cell phone number or why the company is so keen to talk to him. After all, he only owns around 200 Disney shares. Out of curiosity, he decides to call the number that texted him.

00:24:38 Speaker_05
He reaches a call center operator who starts in on her pitch, explaining that voting for Tryon's nominees could make a big difference to the value of his stock and about restoring the magic at Disney.

00:24:51 Speaker_05
Chia decides not to mention that he already sent in his ballot several weeks ago. Then, Chia presses her for specifics.

00:25:00 Speaker_05
She claims Peltz has experience turning around Heinz and P&G when he served on their boards, and that because he bought his Disney shares, he has real skin in the game.

00:25:11 Speaker_05
But when Chia again presses her for specifics of how he'll turn around parks and cruises and make so-called magic, the call center operator fumbles, saying Peltz has got to get onto the board first.

00:25:24 Speaker_05
But Disney and Tryon aren't just cold-calling stockholders in a final push to win the support of the last undecided. Disney's creating attack videos too, warning shareholders of the dangers of voting pelts.

00:25:38 Speaker_04
What's the harm of letting activist investor Nelson Peltz or Jay Razulo have a seat on Disney's board? The answer is simple.

00:25:46 Speaker_04
If they succeed, Disney could suffer the same fate as other great companies that Peltz has previously infiltrated, such as GE and DuPont. Nelson Peltz has a long history of attacking companies to the ultimate detriment of shareholder value.

00:25:59 Speaker_04
His quest also seems more about vanity than a belief in Disney. The choice is clear. Vote Disney.

00:26:07 Speaker_05
Disney's also taking its stop pelts message on the road. Bob Iger and other senior Disney executives spend the last few days of the campaign touring the nation to meet with major investors to convince them that the company's strategy is right.

00:26:22 Speaker_05
Iger also uses the opportunity to highlight the signs of recovery, including how Disney's stock price has risen 35% since the proxy contest started, a development that's undermining Peltz's main line of attack.

00:26:36 Speaker_05
As the contest enters its final days, the Disney camp is growing confident. By their calculations, Tryin's second nominee, Jay Russullo, is not going to amass enough support to get a seat on the board.

00:26:49 Speaker_05
Blackwell's alternative challenge is also going nowhere. All that's left is to stop Nelson Peltz himself. But Peltz is about to spring a surprise that will put Disney on the back foot.

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00:28:47 Speaker_05
It's late March 2024, and in Palm Beach, Florida, Nelson Peltz sits at an outside table on the terrace of an Italian restaurant.

00:28:55 Speaker_05
He's wearing a navy blue polo shirt and a zip-up jumper, and he's having lunch with a journalist from the Financial Times. He finishes his burrata while trying to distance himself from his corporate troublemaker image.

00:29:08 Speaker_05
You know, people think we spend all our time starting proxy fights, but that's not that true. Disney's only the fourth proxy fight in Tryon's history. So you don't see yourself as an activist investor? No, no, no.

00:29:21 Speaker_05
I invest in companies that are good companies, but they're just sort of missing the mark a little bit. You know, the whole thing with Disney's stupid. Okay, I'm not trying to fire Bob Iger. I want to help Bob Iger.

00:29:33 Speaker_05
The waiter appears and delivers the main course, snapper covered with a rich sauce with sauteed spinach. The journalist decides it's time to talk Disney.

00:29:43 Speaker_05
Well, now Disney says you haven't presented a single strategic idea during the two years you spent campaigning for a board seat. Peltz looks put out.

00:29:51 Speaker_05
They also say we know nothing about movies and we don't claim to, but I don't think they know about movies either. They've had five big losers in a row. But Bob Igers acknowledged that.

00:30:04 Speaker_05
He said Disney got too focused on messaging over quality storytelling. Exactly. People go to watch a movie to be entertained. They don't go to get a message. The waiter reappears to clear their plates and notices Peltz abandoned his meal halfway through.

00:30:21 Speaker_05
Was everything okay? I wasn't that crazy about it. Peltz gets back to talking movies, homing in on the Marvels, the female-fronted superhero movie which was released five months ago and has become one of the biggest flops in movie history.

00:30:36 Speaker_05
Why do we have to have a Marvel movie that's all women? Not that I have anything against women, but why do we have to do that? Why can't we have Marvels that are both? Why do we need an all-black cast? Do you think you'll win the proxy fight?

00:30:50 Speaker_05
Iger's attracted some influential supporters. We just got endorsed by Institutional Shareholder Services, ISS. They're the largest and most influential proxy advisor. Lots of institutional investors follow their advice. I think we're on track.

00:31:10 Speaker_05
During the next few days, the scramble for votes reaches fever pitch. Peltz wins backing from investment bank Neuberger Berman. Disney gains the support of former CEO Michael Eisner.

00:31:23 Speaker_05
Peltz claims the backing of the California Public Employees Retirement Fund, New York City Retirement Systems sides with Disney.

00:31:31 Speaker_05
Peltz and Disney also step up their attempts to woo the three most important voters in the contest, the big three index funds, BlackRock, State Street, and Vanguard. Together, they control 16% of Disney's stock.

00:31:46 Speaker_05
and their votes have the power to flip the result. But with a contest this close, neither side is willing to leave anything to chance. And they keep pouring millions of dollars into trying to reach every stockholder and win their votes.

00:32:07 Speaker_05
Late March, Phoenix, Arizona. In a suburban home in Levine, a Disney stockholder sits at his laptop working when his thoughts are interrupted by the thud of today's mail being delivered through the front door.

00:32:21 Speaker_05
The stockholder gets up and heads to the front door to scoop up the mail. As he suspected, it's more literature about Disney. Pleas for votes from Tryon, Disney, and Blackwells. Ever since this proxy fight began, the letters and leaflets keep coming.

00:32:38 Speaker_05
The stockholder casts the letters to one side and returns to his laptop. He does a Google search and the search engine spits out sponsored results paid for by Disney that urge him to vote for the existing board. He scrolls past them.

00:32:52 Speaker_05
An email lands in his inbox. It's Tryon touting its support from ISS. He sighs again. But he won't have to put up with this election much longer.

00:33:08 Speaker_05
It's April 3rd, 2024, and after three long months of campaigning, Disney's annual shareholder meeting is underway. And by the time it's finished, Peltz will know if his battle to get onto the Disney board has paid off.

00:33:24 Speaker_05
In years gone by, Disney's shareholder meetings were spectacular. Held in packed stadiums, they felt more like a music festival than a corporate gathering. COVID ended all that. These days, Disney's stockholder meeting is a webcast.

00:33:39 Speaker_05
Even so, there's still a buzz around this year's event. On X, Elon Musk taps out a message to his followers. Nelson Peltz should definitely be on the Disney board.

00:33:50 Speaker_05
He would help reform the company, improve the quality of product, and generally serve in the best interest of shareholders. This would significantly improve Disney's share price.

00:34:00 Speaker_05
But Peltz isn't browsing X. Instead, he's preparing to deliver his final appeal for stockholders' votes. He's feeling confident. He feels his visits to the big three index funds went well. ISS's backing will have given him a boost too.

00:34:17 Speaker_05
He's sure he can get it over the line. But there are also headwinds. Since the proxy battle started, Disney's vital signs have been improving. When 2024 began, Disney's stock cost $90. Now it's worth $122.

00:34:36 Speaker_05
So when Peltz is invited to address those watching Disney's shareholder summit, he moves to play down the recent stock price gains. While the last few months have been great for the stock, the long-term track record remains disappointing.

00:34:49 Speaker_05
We hope this campaign has had a positive impact. Since we re-engaged with the company last October, Disney's stock is up 50%." Peltz finishes his address and settles in to await the final vote count.

00:35:03 Speaker_05
Disney's general counsel, Horacio Gutierrez, briskly reiterates that the current board opposes Peltz's nomination and then runs through the other business to discuss. Then, Gutierrez finally announces that it's time.

00:35:18 Speaker_03
It is now 22 Pacific Time, and the polls for each matter to be voted on at this meeting are now closed.

00:35:24 Speaker_03
We are pleased to announce that based on the tabulation of our proxy solicitor, it appears that the full Disney slate has been selected by a substantial margin over the Tryon Group nominees and the Blackwells Group nominees.

00:35:42 Speaker_05
Pelt stares at his computer in stunned silence. He thought he had this. But if Disney's nominees won by a substantial margin, there's only one explanation. The big three index funds must have sided with Iger and Disney. Peltz misread the mood.

00:36:02 Speaker_05
When he met them, they all seemed positive about his plans for Disney. But when it came to the ballot, they declined to vote in his favor. Disney and Iger have won. Two weeks later, Disney releases the final tally.

00:36:20 Speaker_05
Out of the 17 candidates fighting for the 12 board seats, Peltz came in 13th place, behind all of Disney's own nominees. And it was a distant 13th too. Disney's least popular board nominee got twice that.

00:36:36 Speaker_05
Tryon's other nominee, former Disney finance chief Jay Rasulo, lagged even further behind. The campaign had proved costly, too. Tryon spent an estimated $25 million chasing votes. It also dented Peltz's image as an activist to be feared.

00:36:56 Speaker_05
The amount of money being managed by Tryon is now at its lowest level since 2012. There's even talk that Peltz's days as one of the apex predators on Wall Street are now over. But Peltz also walks away with a major consolation prize.

00:37:13 Speaker_05
A few weeks after losing the proxy fight, Tryon cashes out and sells all its Disney stock. He ends the fight having made a billion dollars for himself and those who let Tryon manage their investments. But he may have cashed out too early.

00:37:31 Speaker_05
In July, Disney releases the movie Deadpool and Wolverine. The film ends Marvel's run of Duds and rakes in more than 1.3 billion dollars at the box office.

00:37:42 Speaker_05
The following month, Disney announces that its streaming platform Disney Plus is now turning a profit. But Iger's not out of the boardroom yet.

00:37:52 Speaker_05
His contract runs through December 2026, and he still has to work out what to do with Disney's broadcast and cable TV operations. In October 2024, James Gorman, a former Morgan Stanley chief, was named chairman of the board.

00:38:07 Speaker_05
He'll lead the succession planning committee, which will identify Iger's replacement to be announced by early 2026. Nelson Peltz, he's watching from the sidelines, promising to return should the stock price fall again.

00:38:26 Speaker_05
If you like Business Wars, you can binge all episodes early and ad-free right now by joining Wondery Plus in the Wondery app or on Apple Podcasts. Prime members can listen ad-free on Amazon Music.

00:38:38 Speaker_05
Before you go, tell us about yourself by filling out a short survey at wondery.com slash survey. For I'm Wondery, this is episode 2 of Disney Under Siege for Business Wars.

00:38:54 Speaker_05
If you're interested in hearing more about Disney, check out our season on Disney Pixar vs. DreamWorks.

00:39:00 Speaker_05
A quick note about the recreations you've been hearing, in most cases we can't know exactly what was said, those scenes are dramatizations, but they are based on historical research. I'm your host, David Brown.

00:39:10 Speaker_05
Tristan Donovan of Yellow Ant wrote this story. Research by Marina Watson. Our senior producers are Karen Lowe and Dave Schilling. Our producers are Emily Frost and Grant Rudder. Sound design by Ryan Potesta. Voice acting by Emmanuel Chumasiero.

00:39:25 Speaker_05
Fact-checking by Gabrielle Jolay. Our managing producer is Desi Blaylock. Our senior managing producer is Callum Plews. Our executive producers are Jenny Lauer Beckman and Marsha Louie. For Wondering.

00:39:46 Speaker_07
I'm Nicola Coughlan, and for BBC Radio 4, this is History's Youngest Heroes. Rebellion, risk, and the radical power of youth.

00:39:56 Speaker_00
She thought, right, I'll just do it. She thought about others rather than herself.

00:40:01 Speaker_07
12 stories of extraordinary young people from across history. There's a real sense of urgency in them, that resistance has to be mounted, it has to be mounted now. Follow History's Youngest Heroes wherever you get your podcasts.