The Battle for the Soul of Disney Is on

AP Photo/Evan Agostini

Activist investor Nelson Peltz moved behind the scenes this week to gain two or more seats on Disney’s board, according to a CNBC report on Thursday — but Disney CEO Bob Iger struck back with a move of his own.

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The battle for the soul of The Walt Disney Company is on.

The usual "person familiar with the matter" told CNBC that Peltz is seeking at least three seats, presumably for himself and two more for his investment firm, Trian. Trian is one of Disney's largest single investors, controlling more than $3 billion in shares, but there's also a personal element that I'll get to in a moment.

Iger is having none of that. The New York Times reported that, on Wednesday, Iger is adding two more seats to Disney's board, loyal to him and to be held by Morgan Stanley CEO James P. Gorman and the UK's former Sky TV chief, Jeremy Darroch.

Peltz promised a new proxy fight — his second, after ending his first attempt in February — for control of Disney's board, saying in a press release Thursday, "Investor confidence is low, key strategic questions loom, and even Disney’s CEO is acknowledging that the Company’s challenges are greater than previously believed."

Disney shares are worth less than half of what they were at their March 2021 peak, and the company has been one of the worst large-cap performers (when it wasn't THE worst) of the last three years. Shares are up slightly this week, but it's impossible to say whether that's because investors like Iger's cost-cutting measures or because they're placing a bet on Peltz gaining control.

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For its part, Disney says Peltz's fight is personal, not business.

One of Peltz's major allies is billionaire Ike Perlmutter, who may own as many as 25 million of the 33 million Disney shares controlled by Trian. Perlmutter used to run Marvel Studios and oversaw the production of some of the Marvel Cinematic Universe's most successful productions. He was removed from direct day-to-day control over Marvel in 2015 and was forced out of Disney completely earlier this year.

Disney released a statement Thursday reminding people that "Mr. Perlmutter was terminated from his employment by Disney earlier this year and has voiced his longstanding personal agenda against Disney’s CEO, Robert A. Iger."

Reportedly, Perlmutter had clashed with MCU executive producer Kevin Feige, who slowly added much more "diversity and inclusion" to the Marvel movies since getting out from under Perlmutter. Financially and creatively, the MCU has really stunk up the room in the years since the original Avengers storyline was completed with 2019's "Avengers: Endgame."

In addition, the Disney-owned Star Wars franchise appears to be on life support. Disney lost a billion dollars on a failed Star Wars addition to its Orlando theme park properties, streamed several questionable TV shows on the money-losing Disney+ service, and has had zero new movies in production since the unloved "Rise of Skywalker" began shooting way back in 2017. Pixar has slowly lost its magic under Disney's ownership, and the less said about Disney's endless live-action remakes of its classic animated features, the better.

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Whatever Peltz's intentions or Pelmutter's grudges might be, their proxy fight isn't so much a battle over a board or share prices. This is a battle for the soul of a company that has spent much of Iger's reign greedily devouring Disney's creative seed corn — a century's worth of beloved intellectual properties that are the Disney magic.

        Recommended: Reports of Disney's Death Are (Not?) an Exaggeration

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