Bob Iger wins again. Activist shareholder stands down in Disney board battle

By Kate Trafecante, CNN

In Bob we trust, Wall Street said Thursday. After reporting a multibillion cost-cutting initiative that sent Disney shares surging, CEO Bob Iger gained a key battle against activist shareholder Nelson Peltz.

Peltz, who demanded changes at Disney and a seat on the company’s board, declared defeat after Iger announced many of the cost-cutting initiatives Peltz had been demanding. At the conclusion of Iger’s half-hour interview with CNBC on Thursday, Peltz said he was dropping his bid.

“The proxy fight is over,” a spokemsan for Peltz told CNN in a statement on Thursday. “This is a win for all shareholders.”

Iger was critical of Peltz in his interview: “There is not a need, plus, he has not articulated either a vision or even ideas that are of particular value to us,” Iger said. “Now, some, he has, but we were already working on those.”

On a call with investors Wednesday, Iger announced more than $5 billion of cost-cutting initiatives including 7,000 layoffs and a consolidation of some of the company’s operations. Investors cheered the announcement, even though Disney continued to bleed another billion dollars from its subscription services and lost more Disney+ customers than analysts had expected in the past quarter.

One possible cost-cutting — and debt-reducing– maneuver for Disney: selling its stake in streaming service Hulu, a move Iger said he has not yet ruled out.

“Hulu is a very succesful platform and a good consumer proposition, but everything’s on the table right now,” Iger said on CNBC.

Although Iger wouldn’t speculate about whether Disney would buy or sell its two-thirds stake in the streaming platform, he noted that he has been weighing what to do with Hulu. Wall Street analysts had widely expected Disney to buy the rest of the Hulu stake, owned by rival Comcast.

Iger also said that while streaming is the future of the company, “its not the only future.”

“We got a little bit maybe intoxicated by our own subscriber growth,” Iger said, adding that if the company plans to bring Disney+ to profitability by 2024 it would need to rethink it broader strategy.

Part of that strategy is rolling back changes made by his predecessor, Bob Chapek. Iger replaced Chapek as CEO of Disney in November following lackluster earnings and streaming losses.

“The structure of the company that had been changed by my predecessor … it created a huge divide between the creative side of the company, the content engines — movies and television — and the monetization, distribution side of the company,” Iger said. “It was very, very apparent to me that, while I was out and when I came back, that was a mistake.”

That creative distance, Iger added, isn’t healthy for the company. Iger said the changes he announced during Wednesday’s earnings call were to unwind Chapek’s previous restructuring of the company.

— CNN’s Paul R. La Monica contributed to this report

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