Disney (DIS) CEO Bob Iger said Tuesday that he is trying his best to not let an ongoing proxy battle with activist investor Nelson Peltz divert his focus on turning around the business.
"I am working really hard to not let this distract me because when I get distracted, everybody who works for me is distracted and that's not a good thing," Iger said at Morgan Stanley's media and telecom conference.
Last year, Peltz and his hedge fund Trian Fund Management renewed a push to shake up the company's board as the stock price hit multiyear lows. Disney has been grappling with challenges that include a declining linear TV business, slower growth in its parks business, and losses in streaming.
Iger pointed to the complexities of running Disney's multifaceted business as various segments like streaming face increased disruption.
"It's [a business] that takes not only a significant amount of knowledge, but a tremendous amount of time and focus," he said. "This campaign is in a way designed to distract us. ... Time and focus is necessary to generate what we need to generate for the shareholders."
Peltz is currently seeking board seats for himself, along with former Disney CFO Jay Rasulo. 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.
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.
Trian published a 130-page white paper on Monday blaming the board for Disney's underperformance and accusing its members of lacking "focus, alignment and accountability."
The hedge fund offered examples of how Peltz and Rasulo would improve the business and streamline costs if nominated to the board. These suggestions included consolidating Hulu and Disney+ into one product and organization, in addition to reevaluating the viability of Hulu + Live TV.
Trian also said Disney should "right-size" its legacy studio and TV segments, writing: "Disney management has been clear-eyed about the challenges facing the linear and studio businesses, yet the company has apparently done very little to adjust its business accordingly."
Trian suggested Disney find strategic partners "for all or some" of its non-sports linear assets. This would maximize the "value of linear while improving Disney’s strategic focus and growth profile," the hedge fund argued.
Disney has continuously pushed back against Peltz's accusations that its board has failed to address the biggest issues at the company. It recently published a point-by-point presentation on its Vote Disney website refuting his arguments and his track record as an activist.
On Tuesday, Iger said the company is on track to surpass its free cash flow guidance of approximately $8 billion in full-year 2024. He added Disney is also on pace to exceed its $7.5 billion cost savings target.
The company recently received backing from the grandchildren of Walt Disney and his brother Roy. In two open letters sent to shareholders last week, the family members voiced their support for the current board, along with Iger.
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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