As Disney continues its proxy battle with a pair of activist investors (Nelson Peltz’s Trian Partners and Jason Aintabi’s Blackwells Capital), a high-profile activist firm has come forward with its own thesis for Disney’s future … and pledged support for CEO Bob Iger and the Disney board.ValueAct Capital, led by co-CEO Mason Morfit, released a whitepaper Thursday outlining its own strategic ideas for Disney, and explaining why it supports Iger and Disney leadership. ValueAct initially signed on to support Disney in January, but the next few weeks will be critical in persuading shareholders on which slate of director nominees to support.The presentation notes ValueAct’s other media and tech investments, including 21st Century Fox, Spotify, Nintendo, Roblox and Microsoft, and laid out a fairly straightforward investment thesis: “Lean into parks,” and “move beyond the streaming wars” with “bigger bundles,” “better consumer experiences,” “better advertising technology,” and “work with the other studios to test new ideas and create wins.”Value Act noted that Disney has already pledged a huge investment into its parks and experiences business and that there is still plenty of growth to come from the company’s strategy there.In streaming, ValueAct noted that only Netflix is profitable in streaming, but that Disney has the advantage of broadcast reach, and a reputation for being creative-friendly.It noted its work as an investor in The New York Times, and argued that a similar bundling experience could be created at Disney, noting the integration of Hulu into Disney+, and most recently the launch of a sports streaming bundle with Fox and Warner Bros. Discovery.“Why did we commit out votes for the board and leadership?” the presentation concludes.The company says its because “we have a thesis — informed by our network and toolkit,” “we have a positive collaboration — LOTS of learning and teaching — well underway,” and “we have tangible evidence of progress.”Proxy fights can be unpredictable, so having an activist supporting the company can serve as a bulwark against the outsiders. The next critical moment ahead of the April 3 annual meeting will be when Institutional Shareholder Services makes its recommendation to its clients on how they should vote.
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