The battle for the future of Disney just got serious

New York (CNN) — A powerful activist investor is escalating his battle over the future of Disney in a long-simmering feud with CEO Bob Iger and the company’s management, trying to gain two seats on Disney’s board.

Trian Fund Management will nominate Nelson Peltz, its founder, and Jay Rasulo, a former Disney chief financial officer, for election to Disney’s board, the investment firm said Thursday. This comes after Trian in November launched a new bid for seats on Disney’s board — a move the media conglomerate turned down — reigniting its battle from earlier this year.

Disney over the past year has struggled mightily with a surprising number of flops, declining viewership for movies and linear television, along with massive losses in its streaming business. Peltz is looking for a turnaround.

“As Disney’s largest active shareholder, we can no longer sit idly by as the incumbent directors and their hand-picked replacements stand in the way of necessary change, and peers and competitors continue to outperform,” said Peltz, Trian’s chief executive, in a statement. “Shareholder-led board refreshment with focused and aligned directors who are accountable to the owners of the company is long overdue.”

Disney shares rose 1.2% on Wednesday.

The company pushed back against Peltz and Trian in the past but said it would review the proposal.

“Disney has an experienced, diverse, and highly qualified Board,” Disney said in a release responding to Trian’s nominations. “The Governance and Nominating Committee, which evaluates director nominations, will review the proposed Trian nominees and provide a recommendation to the Board as part of its governance process.”

Trian said that it believes the driving factor behind Disney’s performance to be a Board that’s “too closely connected to a long-tenured CEO and too disconnected from shareholders’ interests.”

The firm also said that while it approves of the appointment of Morgan Stanley CEO James Gorman and former Sky CEO Jeremy Darroch as directors as a step towards achieving “objectivity” on Disney’s board, it’s an insufficient step.

Trian expects the next annual meeting to take place in spring 2024.

While Disney shareholders in 2022 cheered CEO Bob Iger’s return to the company’s helm, the company this year has battled with declining linear TV revenues, misses at the box office and efforts to slash costs.

Disney+, the company’s streaming platform, has hemorrhaged cash as the company struggles to transition to the age of streaming. Disney raised the price of its ad-free streaming subscription to $13.99 per month in October, but left the $7.99 price tag of its advertising tier unchanged.

While Disney has said it expects its streaming segment to start generating profit by the end of next year, it lost streaming subscribers in the US and Canada last quarter. Disney has hinted that it could expand efforts to bar password-sharing among users.

Viewership is also down at ESPN, Disney’s former cash cow, and the pressure is on for Disney to hasten its transition to streaming.

Iger in November acknowledged the challenges Disney has faced this year at the company’s annual town hall, and that he’s focused on building a new, more modern business model for Disney.

While Disney’s shares, at about $95 apiece, have climbed higher since trading at their lowest level in nearly ten years in November. The stock is up about 9% this year, but it is well below its highs in recent years.

CNN’s Samantha Delouya contributed to this report.

The-CNN-Wire
™ & © 2023 Cable News Network, Inc., a Warner Bros. Discovery Company. All rights reserved.