According to Nelson Peltz of Trian Fund Management, The Walt Disney Company could achieve profitability in streaming by bundling ESPN+ with a larger player in the streaming arena like Netflix.
Currently available individually or bundled together are Disney’s three streaming services: Disney+, ESPN+, and Hulu. Disney CEO Bob Iger has indicated he is looking for a partner for ESPN, which has seen a decrease in profits.
The news was reported by Bloomberg, who spoke to sources familiar with the matter. They also said Trian intends to publish a white paper with their recommendations for Disney after the company’s next earnings report is released on February 7. Trian believes that Disney’s management structure needs to be simplified and that Disney should release more details about cost cuts and budgeting.
Trian is currently pushing for two seats on Disney’s Board of Directors, one for Peltz and one for Jay Rasulo, former CFO of The Walt Disney Company. Trian controls nearly $3 billion worth of Disney shares.
Disney has recommended that shareholders do not vote for Peltz or Rasulo and have announced their own Board nominees.
“The Board does not endorse the nominations of Nelson Peltz and James Rasulo put forth by Trian Fund Management, L.P. and its affiliates, led by Nelson Peltz and supported by former Disney executive Isaac Perlmutter (collectively, the “Trian Group”). The Board recommends that shareholders do not vote for the Trian Group nominees, and that they reject a related proposal from the Trian Group to amend the Company Bylaws.”
The Walt Disney Company
Peltz said in a statement earlier this month:
“Instead of having a boardroom that would include directors with an ‘ownership mentality’ that can bring fresh perspectives to the company’s challenges, Disney is resisting change and asking shareholders to endorse a board comprised mainly of legacy directors (and their hand-picked successors) who have repeatedly failed to properly plan for CEO succession, misaligned the incentives of management, and failed to oversee or drive a strategy to get the streaming business to profitability or the studios to produce good content.”
Do you agree that ESPN+ could benefit by bundling with a bigger player like Netflix?