What could swing the vote in the Disney proxy battle

Disney (DIS) is in the midst of a proxy fight, with CEO Bob Iger up against activist investor Nelson Peltz's Trian Partners and Blackwell Capital. On Tuesday, Star Wars creator George Lucas voiced his support for Iger, saying "Creating magic is not for amateurs." The announcement comes ahead of Walt Disney's annual meeting on April 3.

Axios Media Deals Reporter Tim Baysinger joins Yahoo Finance to discuss the ongoing proxy battle, potential successors to Iger, and more.

On a potential successor Baysinger states: "I think some of is it that they have settle on someone of one of these potential four candidates and they have to stick with it. Before Bob Chapek, you can name the long list of potential Disney CEO successors from Kevin Mayer to Tom Staggs that were even put in that-- especially in the case of Staggs, that were put in that COO role which was kind of seen as sort of the king-in-waiting for Disney and then Iger renews his contract. I think the biggest thing that they can do to ensure a healthy and successful succession is that they settle on one of these four people or they decide to bring in someone from outside and they stick with it."

Watch the video above to hear what Baysinger says could be "the next big shoe to drop" in the ongoing Disney proxy fight.

Editor's note: On March 21, 2024 Institutional Shareholder Services (ISS) recommended shareholders vote Nelson Peltz to Walt Disney's board. The firm recommended shareholders vote "no" on Peltz's other nominee, former Disney executive Jay Rasulo.

For more expert insight and the latest market action, click here to watch this full episode of Yahoo Finance Live.

Note: This article was written by Nicholas Jacobino

Video Transcript

ALEXANDRA CANAL: For more color on this road ahead for Disney amid its proxy fight, let's bring in Axios media deals reporter Tim Baysinger. Tim, great to have you here today. This is a company I cover closely here. And we were talking back and forth of whether or not we think Disney is concerned at all that they could potentially lose this board seat battle. Based on everything that's happened, we're two weeks out from that shareholder meeting, do you think it's a possibility that Nelson Peltz could win this proxy fight?

TIM BAYSINGER: I mean, I think right now, you know, as you guys said Disney clearly has kind of the momentum right now. I mean their stock price has been up since their earnings call the Street. Obviously, loved it as you too pointed out. The next big shoe to drop will come, you know, maybe today, maybe tomorrow, maybe Thursday. Because you mentioned Glass Lewis recommending Disney's board nominees, but the next big one will be ISS putting their recommendation out. And they have a much larger client base. They're much more influential.

So what they say really could swing the way this vote goes. If they support Disney's nominees, then you might see Nelson, you know, and Trian maybe pull back a bit or maybe because he's already pulled back once last year. He'll just-- he's committed to seeing it through to the end. But if ISS somehow supports both Nelson and former Disney CFO Jay Rasulo who are trying to get on the board, then that makes that shareholder vote in two weeks very, very interesting.

JOSH LIPTON: It's interesting-- you know, what's interesting, too, Tim, is just how we talk about these big name personalities and choosing sides. And obviously, we're talking about George Lucas today. But Trian has its own website outlining their case in this fight. And it's just interesting on that site, Tim, when you look through it, they highlight execs from companies that have worked with Nelson Peltz. And on the site, you'll see them saying very nice things about Mr. Peltz kind of statements that support for him. Who do you think is kind of winning this very public campaign here? Or do we not know yet? We're just going to-- we have to wait for early April?

TIM BAYSINGER: Yeah. I think we're going to have to wait probably until early April. I've covered this business too long to ever really make predictions with concreteness, because things always surprise you. But I would say, right now know Disney looks to be sort of in the lead in this battle.

ALEXANDRA CANAL: And Tim, a big question mark has been succession. And succession planning that's been an issue that the activists have brought up. Disney has also said they're working internally to find a candidate some names that have been thrown around, Dana Walden, Jimmy Pitaro. How do you think Disney avoids another Bob Chapek disaster and really find someone that has longevity at this company?

TIM BAYSINGER: I think some of it is that they have to settle on someone of one of these potential four candidates. And they have to stick with it. I mean, for Bob Chapek, you can name the long list of potential Disney CEO successors from Kevin Mayer to Tom Staggs that were even put in that, especially in the case of Staggs that were put in that COO role, which is kind of-- which was seen as, OK, you're sort of the king in waiting for Disney. And then Iger, you know, renews his contract.

So I think the biggest thing that they could do to ensure a healthy and successful succession is that they settle on one of these four people or they decide to bring in someone from outside, and they stick with it. Iger doesn't renew his contract, and they finally pick someone. And Iger kind of steps out of the limelight a bit, which he had trouble agreeing on Chapek took over.

ALEXANDRA CANAL: So succession obviously a big question mark for investors. There's also other questions at this company when it comes to how they're going to achieve streaming profitability. We've seen the parks business slow. Obviously, linear TV has been on a serious decline. I'm curious to get your opinion on what you think is the main issue at this company, and whether or not Bob Iger has done enough to address that issue for investors.

TIM BAYSINGER: Yeah. I think two of their big issues going forward is their movie business. Obviously, Marvel, Pixar, and Star Wars, they're big brands, have not done too well at the box office recently. Obviously, you know, Disney, Marvel have really, really high hopes for "Deadpool" and "Wolverine" coming out this summer. But it's the only Marvel film this year, which is their lowest in probably a decade.

And their other big thing is, as you mentioned, streaming. And not only that, but ESPN. What is it streaming future look like? What is this joint venture with Fox and Warner Brothers Discovery look like? They just named a CEO last week. So I think those are two of the big things and just how do they manage the long-term and probably irreversible decline of their linear TV business.

JOSH LIPTON: All right. Big shareholder meeting coming up. We're all going to be watching and keeping a close eye on it. Tim, thanks so much for joining us today. Appreciate it.

TIM BAYSINGER: Thanks for having me.