Bob Iger, Disney Fend Off Activist Shareholders In Decisive Vote

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Why it matters: Disney is the most successful and highly valued of the traditional entertainment studios in Hollywood. Its long-time winning formula of leveraging its deep wellspring of intellectual property — particularly in superhero movies and animation — has helped it generate billions at the theatrical box office and in its theme parks. But as some of those creative efforts have sputtered (The Marvels was a significant dud) and Iger, 73, has yet to name a successor, it created an opening for investors to acquire significant equity stakes and agitate for change.

What Disney management wins: Although the vote total is not yet public, CNBC has reported that at least one board member whose seat was being contested won by a 2-to-1 margin. The vote of confidence means that Iger, his board and senior leadership can pursue their strategy to grow revenue, profitability — and the stock price — via such initiatives as the proposed sports streaming joint venture with Fox and Warner Bros. Discovery and a renewed focus on its upcoming slate of films including Moana 2.

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An unprecedented fight: Proxy battles between investors and management rarely enter the broader culture. But this being Disney — and Peltz being a well-known, colorful figure in the financial world — the contest took on the air of a political campaign. Each side courted high-profile constituencies, with Iger securing endorsements from Walt and Roy Disney’s heirs, former CEO Michael Eisner and Laurene Powell Jobs, the widow of Steve Jobs. Disney also ran ads on podcasts and on LinkedIn, and Peltz took out ads on the back page of national newspapers.

But as the law firm Kirkland & Ellis concluded after studying last year’s proxy season, “the more things change, the more they stay the same,” meaning that a company that is well-prepared to fend off an activist is most likely to succeed.

— The Ankler will have the full story on Thursday.

This story is published in partnership with The Ankler, a paid subscription publication about the entertainment industry.