Disney has been on something of a bumpy road lately. It is still the dominant life-form in the entertainment eco-system, but it has lost the safest pair of hands in the industry in the form of CEO Bob Iger departing.

Since then, while Disney+ has shown staggering growth, other areas of the business have not fared as well, particularly with the public. There were much publicised conflicts over the Florida Bill referred to by some as the “Don’t Say Gay Bill”, meanwhile the share price has plateaued as new theme park pricing makes the idea of a trip to Disney into a luxury item for just about everybody.

Disney
“Come talk to our financial advisers about a re-mortgage.”

In the face of this, they have an activist investor. Hedge fund Third Point yesterday disclosed a stake of roughly $1 billion in Disney and they want changes.

The activist investor has a name. Dan Loeb is the head of the Third Point hedge fund and his demands include sweeping changes at Disney. What are they?

He wants more seats on the board and a shake-up of the leadership team, using capital to instigate a share buy-back to boost the price, spinning off ESPN completely, cost-cutting measures, and taking full control of Hulu and integrating it completely into Disney+.

Disney
Dan Loeb – about to become Disney’s David Zaslav and clean up this town?

The Financial Times and Deadline have reported that his letter sent to the CEO of Disney, Bob Chapek, outlines Disney’s costs as among the highest in the industry. He says spinning ESPN off from Disney would allow ESPN to pursue business in the sports betting arena, a highly lucrative business outside the US.

Comcast is on an exit path from Hulu with their 33% share being sold back to the mothership in 2024. Loeb wants this faster. Buying out Comcast quicker would allow Disney to get moving on the Hulu integration which many investors and analysts call out as a key strategic imperative. Loeb says:

“We believe that integrating Hulu directly into the Disney+ DTC platform will provide significant cost and revenue synergies, ultimately reigniting growth in the domestic market.”

That’s investor speak for “Rationalize, cut your costs and show me the f**king money!” Disney has since responded with the generic:

“We welcome the views of all our investors…”

Then they have pushed back on the proposals. Wait until somebody asks for a full cost / benefits breakdown of all their inclusivity workstreams and then uses maths to demonstrate just how badly woke = broke.

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