Bob Iger may prevail in Disney’s boardroom showdown, but the battle has not left him unscathed

By Oliver Darcy, CNN

New York (CNN) — Editor’s Note: A version of this article first appeared in the “Reliable Sources” newsletter. Sign up for the daily digest chronicling the evolving media landscape here.

The battle for the future of Disney is about to reach its epic conclusion.

After waging a relentless months-long proxy war on the Magic Kingdom’s current leadership, Nelson Peltz and his Trian Fund Management will learn on Wednesday whether they have succeeded in making chief executive Bob Iger and the Disney board bleed.

If Peltz emerges successful and secures a board seat for himself and Jay Rasulo, a Disney veteran who previously served as the company’s chief financial officer, it will deal a seismic blow to Iger and the agenda he has outlined to steer the entertainment conglomerate into the future. With only two seats, Peltz and Rasulo would not have the raw power to outvote the Iger-supporting board, but they could certainly serve as a check on leadership, able to make significant noise and create headaches if they disagree with the strategic vision of the company.

But if Peltz falls short, Iger and the Disney board will have dodged a dangerous mouse trap and walked away from the brutal brawl with a vote of confidence from investors, having managed to defeat a prominent billionaire corporate raider who poured immense resources into an attempt to force a change in direction.

Which is all to say, the stakes are awfully high for Disney.

Disney’s stock price has surged nearly 50% over the last six months, but the company’s rising value has not deterred Peltz, who has loudly complained about several issues. The 81-year-old has raised concerns Iger could stay on longer than 2026 when his current contract is scheduled to end, voiced displeasure over what he has described as Disney’s “woke” film strategy and said he wants to see the company achieve “Netflix-like margins” (who doesn’t?), among other things.

But criticizing the work of others is often easier than outlining clear proposals of your own. And given that Iger has already identified some of the same problems with the company as Peltz, it continues to remain unclear precisely what the billionaire would do differently, other than work to ensure the company properly plans for Iger’s succession after botching it with Bob Chapek the last time around.

“I don’t think [Peltz has] offered a turnaround plan that would be something that would get people saying, yeah, we need to get Peltz in there and change things,” Barton Crockett, senior research analyst at Rosenblatt Securities, told CNN’s Hadas Gold and Samantha Delouya.

To help persuade investors that Disney is on the right track, current leadership has recruited a number of industry heavyweights to publicly voice support for their current playbook, including: “Star Wars” creator George Lucas, billionaire philanthropist Laurene Powell Jobs; JP Morgan boss Jamie Dimon; and the grandchildren of Walt and Roy Disney, including Abigail Disney, who has been quite critical of leadership in the past.

But Peltz is not without some powerful allies of his own. Former Marvel Entertainment chief Ike Perlmutter is in his corner, along with the powerful advisory firm Institutional Shareholder Services and the pension fund CalPERS.

The fight has not been cheap. Disney and Trian have spent more than $60 million trying to convince investors to vote for their side, a particularly challenging issue at a company where “mom and pop” investors control roughly 35% of shares. And on Wednesday afternoon, at 1pm ET, the results of the vote will be disclosed at the company’s annual shareholder meeting.

That said, it’s unlikely this hard-fought battle will end the raging war. Even if Iger and the board emerge victorious on Wednesday, Peltz and other restless investors have not been forever slayed, especially if the margin of the board vote is slimmer than Disney may prefer. The forces that have tormented Iger will be banished to the shadows, exiled outside of the Magic Kingdom for now. But they’ll still be lurking in the distance — and if Disney’s stock price were to fall, they’ll likely be ready to spring back into action.

“The fact that it has gotten this much traction tells you that there is a lot of dissatisfaction,” a former Disney executive, who requested anonymity to speak candidly, told me Tuesday. “And even if Iger wins, it’s not over.”

And for Iger, the ugly fight has punctured the notion that he is an unerring and untouchable King of Hollywood. While his actions rarely faced serious scrutiny, that is no longer the case. As one industry insider noted to me, “Iger has lost the aura of invincibility and infallibility.”

“Humility is not a word that comes to mind with Iger at this stage of his career. But this has been a humbling and humiliating experience for him and the board,” the person said. “And one wonders after triumphing over Peltz whether they will learn any lessons from their mistakes or whether they will simply dismiss all of this — as they have before — as a nuisance and distraction.”

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