Yahoo Finance Disney reveals studio shakeup, retreats in India ahead of critical shareholder meeting Read full article 903 Alexandra Canal · Senior Reporter March 2, 2024 at 2:55 PM · 4 min read
It was a busy week at Disney ( DIS ) after the company unveiled a slew of high-profile announcements and continued to push back against activist investors ahead of a critical shareholder meeting this spring.
On Tuesday, Disney published a point-by-point presentation on its Vote Disney website refuting claims made by activist investor Nelson Peltz from hedge fund Trian Fund Management.
Disney has been grappling with challenges that include a declining linear TV business, slower growth in its parks business, and losses in streaming.Last year, Peltz renewed his push to shake up the company’s board as the stock price hit multiyear lows.
Peltz is currently seeking board seats for himself, along with former Disney CFO Jay Rasulo.Another investment firm, Blackwells Capital, supports the company’s current board but has urged shareholders to vote for its three nominees as additions to it.
If the proxy battle continues to a vote, a shareholder meeting set to take place on April 3 will ultimately determine the board’s fate.
Disney received recent backing from the grandchildren of Walt Disney and his brother Roy.In two open letters sent to shareholders late Thursday, the family members voiced their support for the current board, along with CEO Bob Iger.
“We may not agree about everything, but we know that our grandfather would be especially proud of what Disney means to the world today,” wrote Abigail Disney, Roy Disney, Susan Disney Lord, and Tim Disney, the grandchildren of Roy.
“We also know that, like us, he would be very concerned by the threat posed by self-anointed ‘activist investors’ who are really wolves in sheep’s clothing, just waiting to tear Disney apart if they can trick shareholders into opening the door for them,” the letter continued.
Wall Street watchers have viewed the ongoing proxy battle as a noisy distraction for Iger, who’s currently in the midst of resetting the company’s strategy.
Story continues Just this past week, Disney rolled out new price hikes at its theme parks, revealed an executive shakeup within its studio division, and announced a multibillion-dollar joint venture with India’s largest conglomerate.
Disney’s India retreat The Walt Disney Company CEO Bob Iger attends the Nominees Luncheon for the 95th Oscars in Beverly Hills, Calif., Feb.13, 2023.(Mario Anzuoni/REUTERS) (REUTERS / Reuters) On Wednesday, Disney revealed it will merge its Star India business with Reliance Industries in a joint venture (JV) estimated to be worth $8.5 billion.
Reliance will invest roughly $1.4 billion into the joint venture.
The conglomerate and its affiliates will own 63% of the JV with Disney operating as a minority stakeholder.It will hold about 37%.
Disney struggled in India after it lost the rights to stream Indian Premier League cricket matches to Reliance in 2022.
MoffettNathanson analyst Michael Nathanson described the retreat as “welcomed” news for investors in a note published on Feb.
28: “Disney’s India business in totality was not a major drag on profitability (with linear entertainment and Hotstar offsetting the losses at Star sports), but it also never made significant money for the company.”
“In doing this deal, Disney can now de-consolidate India results [and] put the asset into stronger and more strategic hands while allowing Disney to focus on core assets and lay a better path towards improving long term cash flow and profitability,” he added.
Studio shakeup As activists critique Disney’s struggling film business , the company is making some big changes.
On Monday, Disney announced Sean Bailey, who has overseen the studio’s live action films since 2010, will leave his position and be replaced by the former head of Searchlight Pictures, David Greenbaum.
Greenbaum will be stepping into a newly created role as president of live action and 20th Century Studios.
Disney has lagged competitors at the box office despite once being the leader in the industry.Its most recent live-action film “The Little Mermaid” secured $569 million worldwide but still failed to achieve the same level of box office success as prior live-action adaptions.
An animated “Moana” sequel will hit theaters in November as Disney leans deeper into sequels and franchises to combat the slowdown, the company announced during its earnings call last month.
Theme park price hikes Disney quietly hiked single-day, single-ticket prices at Florida’s Walt Disney World by as much as $10 for the 2025 season, according to the company’s theme park reservation system.
Park hopper passes, which allow guests to visit multiple parks in one day, have also gone up by $5 to $10 depending on the selected date.
The price hikes come after Disney announced increases on certain tickets and annual passes at Walt Disney World and California’s Disneyland back in October.
Notably, the company has committed to investing $60 billion into its theme parks business over the next 10 years.
Alexandra Canal is a Senior Reporter at Yahoo Finance.Follow her on X @allie_canal , LinkedIn, and email her at [email protected].
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