Disney has been facing challenges in the cinematic world, and these struggles have created an opportunity for activist investor Nelson Peltz. Just a few years ago, Disney had a string of billion-dollar films and a thriving box office, but recently, its revenues have fallen below $9 billion and it has experienced six consecutive quarters of operating losses in its content sales business. This decline can be attributed to a combination of factors such as pandemic shutdowns, labor strikes, and a failure to connect with audiences.
One of the main issues for Disney has been its inability to produce movies that generate over $1 billion in revenue. Apart from “Avatar: The Way of Water,” which was acquired through the acquisition of 21st Century Fox, Disney has not had a film reach this milestone since 2019. While some films like “Guardians of the Galaxy: Vol. 3” and “Black Panther: Wakanda Forever” came close, others like “Indiana Jones and the Dial of Destiny” and “Lightyear” underperformed at the box office.
These struggles at the box office have caught the attention of activist investor Nelson Peltz, who is seeking a board seat for himself and former Disney CFO Jay Rasulo. Peltz has been critical of the Disney board, claiming that it lacks focus, alignment, and accountability. He believes that the company’s earnings, reputation, and stock price have suffered as a result.
Peltz has also criticized Disney’s content strategy, particularly what he calls its “woke” approach. He argues that people go to watch movies and shows to be entertained, not to receive a message. He questions why there needs to be an all-female Marvel film or an all-Black cast in “Black Panther.” These opinions align with those of former Marvel Entertainment Chairman and CEO Ike Perlmutter, who was ousted from Disney last year and is a friend of Peltz.
However, storytelling is not the sole factor contributing to Disney’s box office struggles. The pandemic has shifted consumer behavior, with more people getting used to watching animated films on streaming platforms rather than in theaters. Additionally, Disney’s Marvel brand has been diluted with too many Disney+ spin-off shows and theatrical sequels, according to CEO Bob Iger. The rapidly changing consumer landscape and tightening budgets have also made it challenging to attract audiences back to cinemas.
Iger has acknowledged these concerns and has expressed a desire for Marvel to produce more fresh content and be more selective with sequels. He has emphasized the importance of prioritizing storytelling over messaging. Change within Disney’s studios will take time, especially after the disruptions caused by the writers and actors strikes last summer. However, analysts predict a solid turnaround for the company in 2026, with a promising movie slate that includes a third Avatar film, an Avengers team-up film, and new Star Wars movies.
Overall, Disney’s recent cinematic challenges have provided an opportunity for activist investor Nelson Peltz to push for change within the company. While Disney has struggled to replicate its past box office success, there is optimism for a turnaround in the coming years. The company will need to find a balance between storytelling and meeting audience expectations in order to regain its position as a box office powerhouse.
