Nelson Peltz Outlines Plan for Restore the Magic 2024
Activist Investor Nelson Peltz has outlined details for his 2024 version of the Restore the Magic campaign.
In a press release on the Trian Partners website, Peltz expressed his frustrations with Disney and explained how he would fix it.
Here are the details of Restore the Magic 2024.
What Is Restore the Magic?
Photo:restorethemagic.com
Billionaire Nelson Peltz attempted to talk and later force his way onto Disney’s Board of Directors in 2022 and 2023.
Disney’s Board recognized the danger and brought back Bob Iger as CEO.
Peltz continued his push for a Board seat for several weeks afterward but eventually dropped the campaign.
Photo: RestoretheMagic.com
Later, Iger laid off Peltz’s close friend, Isaac Perlmutter, as part of layoffs Peltz had demanded.
In the process, Iger burned a bridge, and Peltz has chosen to renew his push for a seat on Disney’s Board in 2024.
Peltz mimics a previous incident in Disney history, Roy E. Disney’s “Save Disney” campaign to eliminate then-CEO Michael Eisner.
Photo: D23
Peltz has outlined several reasons he believes Disney has lost his way. He has also listed his Restore the Magic plans to correct them.
Now that the filing is live, we can examine both parts of the debate.
What Peltz Dislikes with Disney
Photo: Disney
Peltz seeks to secure enough votes from Disney shareholders to earn a place on Disney’s Board.
Since Disney recently tightened its Board restrictions as a preventive measure, Peltz needs two Board members to go.
So, the activist investor just revealed that he wants Maria Elena Lagomasino and Michael Froman voted off the Board.
photo: Funds Society
In their place, Peltz hopes that shareholders will install him and former Disney CFO Jay Rasulo on the Board.
Peltz explains his rationale for pushing seats on Disney’s Board.
His argument is that Disney stock is lower than it was one year, three years, and five years ago. That’s…a solid point.
Peltz adds that Disney stockholders “have collectively lost nearly $200 billion of our investment.”
The message highlights that Peltz controls $3 billion in stock, so he is suffering alongside others.
Trian Investment’s 2023 struggles support this point or underscore that Peltz has an inflated opinion of himself, depending on your perspective.
Peltz’s Specific Complaints
Photo: Deadline
Peltz claims that Disney has failed to meet expectations in the following areas:
- The Company’s creative engine has stalled
- Disney+ has been poorly managed
- ESPN lacks a clear strategy
- Disney has raised park prices but not built expansions
Photo: Lucasfilm
The first point circles back to the conversation about Disney’s 2023 year in cinema.
When Iger returned, Disney+ and Direct-to-Consumer had just lost $1.4 billion in a quarter. Iger has dropped that total by $1 billion per quarter.
Still, the service isn’t making money yet. Is that the same as being poorly managed? Shareholders will decide with their votes.
Photo: Yahoo Sports
As for ESPN, we’ve talked about this problem regularly, and Iger has prioritized the strategic plans.
For his part, Peltz suggested a deal with Netflix, which is easier said than done but not the worst idea.
Photo: Netflix
The park prices topic is perhaps the most surprising in that most investors love the thought of making more money without additional expenditures.
Quick evaluations suggested that Peltz may want Iger to slow park expansion, but that remains to be seen.
Photo: Disney
Peltz’s largest priority is better transparency with theme park return on investment.
To me, the investor doesn’t sound specifically against Disney spending $60 billion at the parks.
Instead, Peltz seeks clarity on Disney’s plans and how they will pay for themselves.
Credit: Disney
Peltz goes on to point the blame at Disney’s Board. He argues that they:
- Lack Focus
- Aren’t Properly Aligned in Vision and Actions
- Lack Accountability
How Peltz Would Restore the Magic
Peltz and Trian plan several steps to “restore the magic” at Disney.
Here are the specific tactics listed:
- Have the Board review Disney’s creative processes
- Require an executable plan to turn a profit on streaming
- Develop a payback profile for all future Direct-to-Consumer expenditures
- Disclose specific expected returns on $60 billion park investment
- Pay C-suite executives based on stock performance
- Execute a successful CEO succession plan
Photo: orlandothemeparkzone.com
MickeyBlog has discussed all these concerns on many occasions, but the final statement underscores the real purpose here.
Nelson Peltz and Isaac Perlmutter want a seat at the table in choosing Bob Iger’s successor.
Photo: MiceChat
Disney’s Board remains vehemently opposed to that thought.
Ultimately, the 2024 Annual Shareholders Meeting will determine who gets their way.
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