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Episode: Disney Under Siege | Restore the Magic | 1

Disney Under Siege | Restore the Magic | 1

Author: Wondery
Duration: 00:33:24

Episode Shownotes

It’s 2022 and Disney is in trouble. The combined forces of pandemic shutdowns, box-office bombs and political missteps have hammered Disney’s stock price. Marvel’s jilted former boss sees an opportunity. He allies with billionaire investor Nelson Peltz to plot a boardroom coup.Be the first to know about Wondery’s newest podcasts,

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Full Transcript

00:00:00 Speaker_04
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. New York City, the summer of 2015.

00:00:20 Speaker_04
Ike Perlmutter raises his eyes and looks across the dinner table at the man sitting opposite him, Disney CEO Bob Iger. Iger's flown in from California to dine with him, and his presence here has set Perlmutter's spidey sense tingling.

00:00:35 Speaker_04
Perlmutter is the 72-year-old head of Marvel Entertainment. Six years ago, Iger convinced him to sell Marvel to Disney. Now, Marvel superheroes rule Hollywood. But friction's growing between the two men. Perlmutter's eyes meet with Iger's.

00:00:52 Speaker_04
So, what is it you want to discuss? We need to talk about Kevin. Kevin is Kevin Feige, the movie executive who turned Marvel into box office gold. Hollywood loves him, but Perlmutter thinks he's a reckless spender with a liberal agenda.

00:01:10 Speaker_04
And what about Kevin do you want to discuss? You keep putting roadblocks in his way. He's one of the most talented executives in filmmaking history and you treat him like an adversary. You won't give him the budgets he needs. Needs or wants?

00:01:25 Speaker_04
movie budgets are totally excessive. He has to go." So you keep saying, but you never have any idea who you would replace him with. I'm still looking for the right person, but that's no reason to overspend.

00:01:37 Speaker_04
Perlmutter might be a billionaire, but he's thrifty. He still eats $3 lunches at Costco and fishes paperclips out of the trash to save money. We've been over this, Ike. Hollywood is not a normal business. It requires big risks.

00:01:53 Speaker_04
Yes, it's easy to get swept up in the glamour and lose perspective, but it's just as easy to grow jaded and lose all perspective too. You're making Kevin sick with stress. You're driving him out of the company. And I can't have that. I've spoken to you.

00:02:11 Speaker_04
What's going on between you and Kevin can't continue. Things have to change. Change? How? Kevin and Marvel Studios will now answer to Walt Disney Studios, just as Lucasfilm and Pixar do. You'll still run the rest of Marvel Entertainment.

00:02:27 Speaker_04
You're making a mistake. You can't trust Kevin. He's loyal only to himself. Do you have an alternative solution? No, no I don't. Then you've made my case for me. So, are we agreed? Do I have a choice? Not really. Then I agree.

00:02:52 Speaker_04
Perlmutter resumes eating his meal while seething inside. He's lost control of Marvel's biggest business and the animosity between him and Iger will only grow from here.

00:03:04 Speaker_04
Until, one day, years from now, the differences between them will erupt into the most expensive war for corporate control in U.S. business history.

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00:05:15 Speaker_04
In this season, we track billionaire investor Nelson Peltz's attempt to strong-arm his way onto Disney's board. It was a $65 million argument, launched as an ailing Disney struggled to recover from the COVID pandemic. and a run of movie misses.

00:05:31 Speaker_04
At stake was the future of the Walt Disney Company, the media colossus behind Marvel, ABC, ESPN, Pixar, and much more.

00:05:40 Speaker_04
Peltz's siege of the Magic Kingdom would see mud slung, thousands laid off, careers crushed, and Hollywood stars sparring with Wall Street financiers. This is Episode 1, Restore the Magic.

00:06:01 Speaker_04
It's July 2022, seven years since former Disney CEO Robert Iger stripped Ike Perlmutter of control of Marvel's movie output. And at the Disney Hotel New York at Disneyland Paris, activist investor Nelson Peltz is eating lunch.

00:06:18 Speaker_04
Through the window, he sees tourists reconnecting with the theme park after two years of COVID lockdowns and social distancing. Peltz is an 80-year-old billionaire with white stubble and expensive round spectacles.

00:06:31 Speaker_04
He runs the hedge fund Try & Partners and has a rep as a corporate troublemaker. Peltz makes his loot from big companies with depressed stocks. When he finds one, he buys in big and uses his stake to demand changes that'll boost its stock price.

00:06:46 Speaker_04
And once he's achieved that, he cashes out many millions richer. He's already done this to Heinz, Wendy's, General Electric, and Family Dollar. And today, he's sniffing out a fresh target.

00:07:01 Speaker_04
Peltz looks up from his meal and at his lunch companion, Bob Chapek, the bald-headed CEO of Disney. What's that? Chapek smiles. It's the Dream and Shine Brighter Parade. It celebrates 30 years in Paris.

00:07:15 Speaker_04
Good to know Disney still got something worth celebrating. Chapek ignores the dig, but he knows what Peltz is getting at. Chapek replaced Iger as Disney's CEO in February 2020. A few weeks later, COVID hit.

00:07:31 Speaker_04
The pandemic shut Disney's theme parks, put movie production on ice, and cancelled the sports games ESPN airs. And the company's yet to rebound. Pixar and Marvel movies have gone from blockbusters to box office bombs.

00:07:45 Speaker_04
Disney Plus is losing billions trying to catch up with Netflix, and its TV networks are losing viewers to streaming platforms. Disney's also got itself tangled in America's culture wars.

00:07:57 Speaker_04
Four months ago, Florida banned schools from discussing sexual orientation or gender identity with children under 10 years old. But the company's decision to say nothing about the so-called Don't Say Gay Law caused uproar among Disney employees.

00:08:12 Speaker_04
So Chapek tried to calm the situation by criticizing the law. That infuriated the band's supporters. And now, Florida Governor Ron DeSantis is moving to strip the Disney World Resort in Orlando of its special tax status.

00:08:27 Speaker_04
all of which has caused Disney's stock to fall by a third since the start of the year.

00:08:32 Speaker_04
So now, after some back-channel chats with his next-door neighbor, Marvel Entertainment Chairman Ike Perlmutter, Peltz has flown to Paris to see if JPEG is someone he can work with. Bob, Ike and I feel for you, we do. You were dealt a bad hand.

00:08:48 Speaker_04
Well, COVID challenged every business, but we've turned the corner. Really? The evidence is right here in this park, in the crowds outside. I don't mean COVID. I mean what you inherited from Bob Iger.

00:09:03 Speaker_04
A flawed streaming strategy, the overpriced Fox acquisition, runaway movie budgets, all of which drags on the stock price. Our streaming strategy is essential. Broadcast and cable TV viewership is in decline.

00:09:18 Speaker_04
But I'm sure you have views on what we should be doing. You bet I do. I believe there's billions of cost savings to be made. The business is too centralized and there's not enough cost discipline.

00:09:30 Speaker_04
But my most pressing concern is that if these problems keep on going, the board might panic and bring Iger back in as CEO. It's a worry Chapek shares too. Iger's shadow looms large over Disney.

00:09:44 Speaker_04
During his 15 years as CEO, Disney's market value grew more than fourfold. He was always going to be a hard act for Chapek to follow, and it doesn't help that Iger spent his retirement questioning his handling of Disney. Chapek leans forward.

00:10:00 Speaker_04
What are you suggesting, Nelson? That we work together. I want to make a major investment in Disney, and I'd like to help you get things back on track. Ah, you want a board seat?

00:10:14 Speaker_04
I don't intend to invest hundreds of millions of dollars in return for zero influence. Representation on the board is a must, but you know I have the experience. Not in media. Business is business.

00:10:28 Speaker_04
The need to deliver value for stockholders doesn't change just because you make movies. You think the board is open to me joining? Mike is ready to help you make the case. Not everyone likes Ike.

00:10:40 Speaker_04
They remember his antagonism toward Iger, and his attitude to Kevin Feige is a real problem. The board sees Kevin as crucial to Marvel's success. Also, your reputation for starting proxy fights will put them all on edge.

00:10:55 Speaker_04
I don't want to start a proxy fight. I always try to work collaboratively with the companies I invest in. It's only when companies refuse to accept the need for change I'm forced to appeal directly to stockholders for a position on the board."

00:11:08 Speaker_04
Chapek pauses to think. Peltz seems like someone he could work with, and he could do with an ally in the boardroom. Also, it's better to get on Peltz's good side than to risk a distracting and high-profile proxy war

00:11:24 Speaker_04
Okay, Nelson, this is interesting, but as you know, I don't decide who gets to join the board. I'm just the CEO. Of course. But I will relay our conversation to the board and encourage them to explore it further with you. Well, thanks.

00:11:41 Speaker_04
That's all I'm asking for. Pelt spends the next few months trying to sell his vision of change to Disney's board members and senior executives. In parallel, Ike Perlmutter starts pushing internally for Peltz to be offered a seat on the board.

00:12:01 Speaker_04
But as summer turns to fall, it becomes clear to Peltz that Disney's board is in no rush to invite him in. They're also losing faith in Chapek's leadership.

00:12:19 Speaker_04
is November 8th, 2022, and the Walt Disney Company is holding its fourth quarter earnings call. And in the Manhattan offices of Tryon Partners, Peltz is listening in with his analysts and traders.

00:12:31 Speaker_04
Through the speaker in the middle of the table, Chapek is delivering an upbeat report about Disney's performance. Fiscal 2022 was a strong year. We continued our journey of telling incredible Disney stories.

00:12:43 Speaker_04
Those efforts resulted in record annual results at our parks, experiences, and product segments. The Tryon team exchange looks of surprise. They have Disney's results in front of them. And to them, the numbers don't justify Chapek's cheery assessment.

00:12:59 Speaker_04
Disney's earnings per share are $0.25 below expectations. The fourth quarter losses from Disney's streaming platforms have more than doubled to $1.5 billion. Profits have flatlined.

00:13:14 Speaker_04
Peltz turns to one of his employees who's hunched over a laptop tracking the market reaction. Where's the stock heading? Jopping like a stone. Down almost 10% since this morning." Peltz nods. He's prepared for this moment.

00:13:28 Speaker_04
He's got a war chest of half a billion dollars he can use to purchase Disney stock. His team has already identified the ideal price to buy at. Tryon's computers are primed to scoop up shares in an instant. The employee looks up from his laptop.

00:13:45 Speaker_04
Stock just slipped beneath $90. What's the call? Peltz doesn't reply immediately. After all, this is a half-a-billion-dollar decision. And the money isn't his. It's money other investors have entrusted to him and Tryan to manage.

00:14:01 Speaker_04
He refocuses on the earnings call where Chapek is still painting a rosy picture for Wall Street.

00:14:07 Speaker_03
We believe that we've got a formula that gives us great confidence that we're going to achieve

00:14:12 Speaker_04
That's all Peltz needed to hear. Disney is in denial. Time to crank up the pressure. He looks at his team. We buy. A few hours later, Disney headquarters, Burbank, California. In his office, Chapek steadies himself and reaches for his desk phone.

00:14:34 Speaker_04
He spent the day trying to sell Disney's results as a good news story, but Wall Street isn't buying it. Disney stock is down almost $10, wiping billions off its market value. And now, Nelson Peltz is on the phone.

00:14:50 Speaker_04
Chapek carefully picks up the receiver. Nelson, sorry for the wait. What can I do for you? I'll be quick. I wanted you to know that we've taken a position in Disney. How big a position?

00:15:04 Speaker_04
$300 million, and we expect to continue buying over the next 24 hours up to around $500 million. Chapek knows this is the first step towards a proxy fight.

00:15:15 Speaker_04
The term for when an outsider like Peltz attempts to convince stockholders to replace or curtail the power of a company's existing leadership. Chapek plays it cool. Well, your vote of confidence in the Walt Disney Company is welcome. Thank you.

00:15:32 Speaker_04
But now that we are a major stockholder, we do expect our voice to be heard. We want a seat, maybe two, on the board. Today's results only reaffirm the need for major restructuring.

00:15:43 Speaker_04
But we can, and we will, discuss that in more detail in the days to come." I'm sure. Bye now. Chapek hangs up and closes his eyes. He knows that after today's events, he's on borrowed time. Disney is in crisis and his position is in jeopardy.

00:16:06 Speaker_04
The board is probably already discussing whether to fire him. His senior executives will be wondering if they will get a shot at replacing him. Allying with Peltz might be his only way to survive now. A few days later, he flies to Palm Beach, Florida.

00:16:23 Speaker_04
There, he meets with Peltz at his Oceanside mansion. Then, he heads next door to meet Peltz's neighbor and chief advocate within Disney, Marvel Entertainment's Ike Perlmutter.

00:16:35 Speaker_04
But when Disney's board members learn of the unapproved talks, they ban Chapek from further unchaperoned contact with Peltz. And that's because the Board of Directors has another solution in mind. The solution Peltz, Perlmutter, and Chapek dread most.

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Visit klaviyo.com to make every moment count. It's Friday, November 18th, 2022, and in his white-walled mansion in Brentwood, Los Angeles, Bob Iger is on edge.

00:18:36 Speaker_04
It's almost a year since he retired from Disney's board of directors, but now he's got a call scheduled at 3 p.m. with Susan Arnold, the lead independent director on the board.

00:18:45 Speaker_04
The 71-year-old former Disney boss and Arnold fell out with each other two years ago, so the sudden request for a call has set his imagination whirring. Iger checks his watch. It's three. The phone rings.

00:19:01 Speaker_04
Iger resists the temptation to answer immediately. He lets it ring two more times, then answers. Susan. Iger listens as Arnold explains that the Disney Board of Directors has lost confidence in Chapik. Then she asks the question he hoped to hear.

00:19:19 Speaker_04
Will I come back? Yes. There's a moment of surprise silence on the other end of the line. Arnold didn't expect Iger to say yes quite so fast. Iger fills in the gap. I have three conditions though. First, I want it to be announced Monday at the latest.

00:19:36 Speaker_04
It's too big a secret for me to keep. Arnold says the board can make that Monday announcement happen. My second condition is that my return has to be for a limited period, one year. Arnold pushes back.

00:19:50 Speaker_04
One year isn't enough time to prepare a successor CEO. Disney wants Iger back for at least two years. Iger thinks for a moment, then relents. Okay, two years then. My final condition is that I want to serve without pay.

00:20:06 Speaker_04
I don't want people thinking I'm doing this for the money. Arnold pauses again, surprised by the request. Then she says she'll need to discuss that with the board. That Sunday, Disney's board of directors meet online without informing Chaypek.

00:20:27 Speaker_04
They agree to fire Chaypek and reinstate Iger. They also reject Iger's request to work without pay. After the board meeting, Arnold calls Chaypek and tells him he's fired, effective immediately.

00:20:40 Speaker_04
Four hours later, news breaks that Iger's back, but he's returning to a world of trouble. Disney's fighting fires on multiple fronts.

00:20:50 Speaker_04
And he also knows that Ike Perlmutter will now be doing all he can to help his friend Nelson Peltz break into the boardroom. It's January 10th, 2023, and on a Zoom call, last-ditch talks to avoid a proxy war are underway.

00:21:12 Speaker_04
It's been two months since Iger returned to Disney, but the change in leadership hasn't put Peltz off. In fact, he's digging in and increasing his stake in Disney, which now stands at $800 million.

00:21:26 Speaker_04
So now, Iger and Disney's top executives are trying to find a way to make nice with Peltz and the Tryon team. Iger tries to convince Peltz to give him more time to make changes.

00:21:38 Speaker_04
Nelson, we're open to working constructively with you, and we welcome any ideas that drive shareholder value, but we need time to deliver change. A proxy fight would be a huge distraction from that.

00:21:50 Speaker_04
Peltz adjusts his glasses and leans toward the camera, his face filling the screen. The way to avoid a proxy fight is to add me to the board. We can help. Your stock is at an eight-year low. When I look at Disney, I see a company in crisis.

00:22:07 Speaker_04
I feel that's an exaggeration, but maybe we can talk specifics. I'd love to. Let's talk about streaming. You're struggling to deliver profits despite having similar revenues to Netflix and the advantage of best-in-class franchises. Why?

00:22:23 Speaker_04
I'll tell you why. Because Netflix is more cost-effective in its productions. Disney lacks cost discipline. That's why your streaming economics are so bad. We're already taking action on costs.

00:22:37 Speaker_04
There's a hiring freeze in place and more to come, but we need time and the ability to focus on what's important. A proxy battle with you will be a distraction from what's important. Then avoid the battle by putting me on the board.

00:22:52 Speaker_04
Every company whose board I've served on, and I have served on many, has outperformed the S&P 500. Look, we can help. We've offered quarterly meetings with management and the board, as well as an information sharing pact.

00:23:07 Speaker_04
We can keep talking, but we need you to sign a standstill agreement saying you won't mount a challenge. It's impossible to work together while you're threatening us. Now, will you sign that? No. No, Robert. This needs resolving.

00:23:25 Speaker_04
We have skin in this game, and the deadline for this year's board nominees is close. I will be on that ballot one way or another. The Zoom call ends without an agreement and war between Tryon and Disney imminent.

00:23:48 Speaker_04
The next day, Business News Network CNBC breaks the news that Peltz will mount a campaign to get a seat on Disney's board of directors.

00:23:57 Speaker_08
Nelson Peltz is going to try to get on the board of directors at Disney, because they said, we're not interested in you joining the board of directors of Disney, Mr. Peltz. He's a significant shareholder. Last count, maybe $800 million worth of stock.

00:24:10 Speaker_08
They've known he's been there for some time. In fact, Bob Chapek, the former CEO, was aware of Peltz's presence, as was the board. And then the board did get rid of Mr. Chapek, but that apparently wasn't enough to satisfy Mr. Peltz.

00:24:24 Speaker_04
The next morning, Peltz's campaign officially begins. He kicks off the campaign with an appearance on CNBC's morning market news show Squawk on the Street. He uses his TV time to tear into Disney's financial results.

00:24:38 Speaker_04
Then he sets to work poking holes in Iger's reputation as a superstar CEO by highlighting one of the last big decisions he made during his first run as Disney's CEO, the buyout of 21st Century Fox in 2019.

00:24:53 Speaker_06
They lost about $50 billion on Fox. Fox hurt this company. Fox took the dividend away. Fox created what was once a pristine balance sheet into a mess.

00:25:09 Speaker_04
That same day, Peltz's Tryon Partners hedge fund launches a campaign website called Restore the Magic.

00:25:16 Speaker_04
The website sets out Tryon's criticisms of Disney's performance and outlines a plan to turn the business around through greater financial discipline. But Peltz's attack won't go unanswered.

00:25:28 Speaker_04
Iger and the Disney board are determined to keep him out and they're cooking up an alternative turnaround plan. One designed to stop Tryon's campaign in its tracks. You know, your team spends over half their time writing.

00:25:47 Speaker_04
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00:25:54 Speaker_04
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00:27:36 Speaker_04
Five days have passed since Nelson Peltz began his Restore the Magic campaign to gain a seat on Disney's board.

00:27:43 Speaker_04
For a week, Peltz has hogged the limelight by trash-talking Disney chief Bob Iger's record, particularly his decision to buy 21st Century Fox for $71 billion.

00:27:54 Speaker_04
But now, Iger and the Disney board are striking back by issuing a presentation to stockholders, setting out the reasons why Peltz's bid for the boardroom should be rejected.

00:28:04 Speaker_04
The presentation starts by highlighting the experience of the existing board members and recounting the successes from Iger's first term as CEO. Then, it takes aim at Peltz.

00:28:17 Speaker_04
It accuses him of lacking the skill, experience and understanding needed to make a useful contribution. It defends the Fox buyout as a source of valuable franchises like Avatar and The Simpsons.

00:28:30 Speaker_04
Then, it rebuts Peltz's claim that Fox ruined Disney's balance sheet by arguing that it was COVID, not Fox, that caused the company's debt load to spike during 2020 and 2021. The rival narratives are now in place.

00:28:45 Speaker_04
Disney's casting Peltz as the man without a clue. Peltz paints Disney as an American icon laid low by overspending. In the days that follow, Peltz sharpens his attack.

00:28:58 Speaker_04
He singles out Disney director and former White House advisor Michael Froman as his prime target.

00:29:04 Speaker_04
He calls on shareholders to give him Froman's seat on the board on the grounds that Froman spent his career in federal government and that's of little use to Disney.

00:29:13 Speaker_04
But while Peltz tries to pick off Froman, Eiger's cooking up a defense designed to keep the company's stockholders on his side. It's February 8th, 2023, and Bob Iger is leading his first earnings call since returning as CEO.

00:29:35 Speaker_04
And despite another quarter of mixed results, it's clear to the analysts and investors listening in to the call that there's a smile on Iger's face.

00:29:44 Speaker_04
And that's because he's using this moment to lift the lid on the big plan he's been working on since being reinstated as CEO. It's time for another transformation at Disney.

00:29:56 Speaker_04
One that rationalizes our enviable streaming business and puts it on a path to sustained growth and profitability while also reducing expenses.

00:30:06 Speaker_04
And that transformation is a reorganization plan designed to lift investor spirits and kill Peltz's boardroom challenge, Stone Cold. We're targeting $5.5 billion of cost savings across the company.

00:30:21 Speaker_04
To help achieve this, we'll be reducing our workforce by approximately 7,000 jobs. That's 4% of Disney employees who are about to lose their jobs. But jobs aren't all that's getting cut.

00:30:35 Speaker_04
On the content side, we expect to deliver approximately $3 billion in savings over the next few years, including sports. As investors listen, Iger forecasts that Disney Plus will start turning a profit by the fall of 2024.

00:30:52 Speaker_04
He promises to reassess Disney's activities overseas, adjusting pricing strategies, and giving the company's creative leadership more decision-making power while also making them more accountable for the financial performance of their productions.

00:31:06 Speaker_04
He also announces that the board has formed a succession planning committee to identify and prepare the next CEO of Disney. It's a cost-saving plan that directly tackles most of Peltz's criticism. But it's going to take time to deliver.

00:31:21 Speaker_04
So Igers also got a treat to immediately lift the spirits of every Disney investor right away. As a result of the impact of the COVID pandemic, we suspended the dividend in the spring of 2020.

00:31:33 Speaker_04
Well, now that the pandemic's impacts to our business are largely behind us, we intend to ask the board to approve the reinstatement of a dividend by the end of the calendar year.

00:31:44 Speaker_04
The return of the dividend and the restructuring plan go down well with the markets. With billions of savings on the way and thousands of employees set to get pink slips, Disney stock rises 5% to reach its highest level since August 2022.

00:32:02 Speaker_04
Even Marvel's frugal chairman Ike Perlmutter likes the plan, and that leaves Peltz's campaign for a board seat pushed into a corner. He wanted cuts. Now, he's got them. And his proxy war looks pointless.

00:32:24 Speaker_04
It's the next morning, and on CNBC's Squawk on the Street, host Jim Cramer has just taken an unexpected call from Nelson Peltz. He's ready to share his reaction to Bob Iger's plan to save more than $5.5 billion and eliminate 7,000 jobs.

00:32:40 Speaker_05
Nelson, is this one of those where you just declare victory? This was a great win for all the shareholders. Management at Disney now plans to do everything that we want them to do. We wish the very best to Bob, his management team, the board.

00:33:00 Speaker_05
We will be watching, we will be rooting, and the foxy fight is over. I know you don't typically talk about it, but I'm going to ask you, how much money did you make? Well, who's counting?

00:33:20 Speaker_04
But while Peltz won't put a figure on it, he's made some serious money. Try and Steak in Disney is estimated to have grown in value by $200 million in less than three months.

00:33:33 Speaker_04
And shortly after ending his proxy fight, Pelt sells a third of Tryon's stake in Disney to lock in $60 million of profit. His saber-rattling has delivered another huge payday for Tryon. But not everyone in this fight is going to emerge victorious.

00:33:57 Speaker_04
March 29th, 2023, Palm Beach, Florida. In his Oceanside mansion, Ike Perlmutter reaches for his ringing phone. The 80-year-old Marvel Entertainment chairman checks who's calling. It's a California area code, most likely Disney's head office.

00:34:13 Speaker_04
He answers the phone.

00:34:15 Speaker_02
This is Ike. Hi Ike, it's Horatio Gutierrez.

00:34:20 Speaker_04
Perlmutter frowns slightly. Gutierrez is Disney's general counsel. He and Gutierrez don't talk often. Something must be up. What can I do for you?

00:34:31 Speaker_02
I'm calling to inform you that as part of the reorganization, we are disbanding Marvel Entertainment. Its activities will be folded into larger Disney business units.

00:34:42 Speaker_04
Perlmutter says nothing. Since he lost control of the movies back in 2015, Marvel Entertainment has become a backwater within Disney.

00:34:51 Speaker_04
Its comics publishing business generates less than 60 million dollars a year, a tiny sum for a company as big as Disney. Gutierrez continues.

00:35:01 Speaker_02
And what that change also means for you, Ike, is that your job is being eliminated and you are being let go. So,

00:35:09 Speaker_04
This is payback for daring to challenge the orthodoxy in this company. This is because I worked with Nelson Peltz, isn't it?

00:35:17 Speaker_02
This would have happened regardless of the proxy fight.

00:35:20 Speaker_04
I very much doubt that.

00:35:23 Speaker_02
This is purely about efficiency, and we're eliminating jobs as per the reorganization plan, and yours is unfortunately one of them. This is a necessary step in creating a more efficient company.

00:35:37 Speaker_02
We appreciate the years of service you've given the Walt Disney Company. Someone will be in touch to arrange the severance package.

00:35:45 Speaker_04
Whatever. Goodbye. Perlmutter hangs up. Despite the assurances, he's convinced that this is personal. To his mind, this is Bob Iger taking revenge on him for encouraging Nelson Peltz to challenge how things are done at Disney.

00:36:03 Speaker_04
But they're not going to get rid of him that easily. Perlmutter still owns $3 billion of Disney stock, making him the company's biggest individual shareholder. That gives him power.

00:36:16 Speaker_04
He doesn't believe Iger will make good on his promises of keeping spending in check and focusing on profits. So if Iger thinks he's heard the last of him and Peltz, he's in for a rude awakening. On the next episode, Iger struggles to restore the magic.

00:36:35 Speaker_04
Perlmutter unites with Peltz for a new attack and Disney's investors weigh whether to add Peltz to the board.

00:36:50 Speaker_04
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.

00:37:01 Speaker_04
Before you go, tell us about yourself by filling out a short survey at wondery.com slash survey. From Wondery, this is episode one of Disney Under Siege for Business Scores.

00:37:18 Speaker_04
If you're interested in hearing more about Marvel's history, check out our season on Marvel vs. DC. A quick note about the recreations you've been hearing. In most cases, we can't know exactly what was said.

00:37:29 Speaker_04
Those scenes are dramatizations, but they're based on historical research. I'm your host, David Brown. Tristan Donovan of Yellow Ant wrote this story, researched by Marina Watson. Our senior producers are Karen Lowe and Dave Schilling.

00:37:41 Speaker_04
Our producers are Emily Frost and Grant Ruddard. Sound design by Ryan Potesta. Voice acting by Emmanuel Chimasiero. Back checking by Gabrielle Jolay. Our managing producer is Desi Blaylock. Our senior managing producer is Callum Ploos.

00:37:56 Speaker_04
Our executive producers are Jenny Lauer-Beckman and Marshall Louis. Four wondering.

00:38:13 Speaker_09
In the Pacific Ocean, halfway between Peru and New Zealand, lies a tiny volcanic island. It's a little-known British territory. called Pitcairn. And it harboured a deep, dark scandal.

00:38:28 Speaker_00
There wouldn't be a girl on Pitcairn once they reached the age of 10 that was still a virgin. It just happens to all of us.

00:38:35 Speaker_09
I'm journalist Luke Jones and for almost two years I've been investigating a shocking story that has left deep scars on generations of women and girls from Pitcairn.

00:38:45 Speaker_07
When there's nobody watching, nobody going to report it. people will get away with what they can get away with.

00:38:51 Speaker_09
In the Pitcairn Trials, I'll be uncovering a story of abuse and the fight for justice that has brought a unique, lonely, Pacific Island to the brink of extinction. Listen to the Pitcairn Trials exclusively on Wondery+.

00:39:06 Speaker_09
Join Wondery in the Wondery app, Apple Podcasts or Spotify.