Blackwells Capital, LLC (“Blackwells”), a shareholder of The Walt
Disney Company (“Disney” or the “Company”) (NYSE:DIS), filed its
definitive proxy statement with the Securities and Exchange
Commission (“SEC”) in connection with its nomination of Jessica
Schell, Craig Hatkoff and Leah Solivan for election to the board of
directors of Disney (the “Board”) at the Company’s 2024 annual
meeting of shareholders, and released a letter which can be found
below, and at www.TheFutureOfDisney.com.
“Jessica Schell, Craig Hatkoff and Leah Solivan
bring invaluable expertise and experience to Disney’s Board as it
faces the challenges and opportunities of a generational
transformation. Voting for Blackwells’ nominees will ensure the
Board has the support it requires across critical areas:
media and content, real estate and asset optimization, and
the proficiency to guide Disney through a new world where Physical,
Spatial Computing and AI-driven Experiences converge,”
said Jason Aintabi, Chief Investment Officer of Blackwells.
“Only two of Disney’s non-executive directors
have significant media experience, and, as a whole, the Board lacks
the qualifications that our candidates possess. The Trian nominees,
for their part, are uninspiring; Mr. Rasulo is a former Disney
employee who plainly lacks relevant expertise. Mr. Peltz has spent
the last two years begging Disney for a Board seat, and seems to
focus his efforts on soliciting endorsements from Elon Musk- who
doesn’t own a single Disney share, and is aggrieved at Disney for
withholding advertising dollars from his struggling social media
platform. These are not winning strategies for Disney
Shareholders,” concluded Mr. Aintabi.
February 6, 2024
Dear Fellow Walt Disney Company
Shareholders,
Blackwells Capital LLC (“Blackwells”) is
soliciting your vote to elect three individuals to join the Disney
board of directors (the “Board”) as the Company navigates through a
vast and novel opportunity set offering a near limitless
potential.
The purpose of our campaign is simple: we want
to ensure that Disney has the right collection of minds around the
boardroom table, working constructively together to make decisions
that will benefit ALL shareholders for decades to
come.
Disney has one of the most attractive portfolios
of beloved brands and businesses, that have delighted generations
of people around the world. However, Disney has not delivered for
its shareholders over the last few years.
In our letter, and throughout the course of our
campaign, we will offer fellow shareholders perspective on why
Disney’s share price has underperformed and, more importantly, what
the future of Disney means for investors, and why
our nominees are best suited to help deliver that future.
If elected, our three nominees for the Board
have pledged to continue to support Disney’s transformation efforts
under the leadership of the current Board and CEO, Robert A. Iger.
In addition to an approach of constructive collaboration, our three
nominees will bring unique skills, expertise and perspectives to
the Board that draw on a range of experiences that the
future of Disney depends on:
1) Media and
Content
2) Real Estate
and Strategic Asset
Review 3) Disney’s
Physical, Spatial Computing, and AI-Driven Experiences
Media and Content
Disney’s content engine is positioned to shine -
with the right bench strength in the Boardroom. Disney is widely
recognized as the preeminent media company in the world,
but has lagged in adding meaningful media expertise to its
Board. In its 2024 proxy statement, the Company lists only
two non-executive directors on a board of twelve individuals who
have significant media experience,1 and in the Company’s 2023 proxy
statement, Disney did not even have a skill set marked for media
experience.2
Blackwells' nominee Jessica Schell is one of
America’s preeminent experts in content monetization, and would be
a valuable addition to the Board. Ms. Schell spent 20 years in
strategic and operating roles at three major entertainment
companies - Warner Bros., NBC Universal, and The Walt Disney
Company - focusing on the impact of technological change on content
distribution and monetization. She served as Executive Vice
President and General Manager of Warner Bros. Home Entertainment
where she led the over one-billion-dollar global film division of
home entertainment and expanded her remit over time to include
television and originals. Ms. Schell transformed the primarily
physical DVD business into a global digital transactional business,
driving years of double digit annual digital growth. She also led
Warner Bros’ top entertainment franchises into markets enabled by
new technologies, including Virtual Reality, Internet of Things
(IOT) connected entertainment devices, and non-fungible tokens
(NFTs). Ms. Schell was also an original member of the NBC Universal
management team that launched Hulu.
Ms. Schell’s expertise will enable her to
contribute insight in the Boardroom on day one. We
believe there is no better suited person for the rest of the Board
and management to leverage as Disney navigates the complex issues
of integrating Hulu and Disney+ and the unbundling and
transitioning of ESPN to a DTC service, and doubles down on
producing extraordinary content for current and future franchises
that has served as the creative engine driving all of Disney’s
businesses.
Making the right choices about how to best use
premium content to balance profitability, fan engagement, franchise
strength and streaming subscriber acquisition and retention are
skills that fall squarely in Ms. Schell’s wheelhouse, and she
intends to deliver for Disney shareholders. We firmly believe
Ms. Schell’s contributions as a director will help Disney
attain Netflix like growth rates on subscribers and pricing for
Disney+ based on her expertise, with meaningful upside to
be unlocked by integrating Disney +, Hulu, and ESPN+.3
Real Estate and Strategic Asset
Review
Disney has an almost unimaginable portfolio of
real estate around the world. The Company owns tens of thousands of
acres of land, more than 30,000 of the world’s most profitable
hotel rooms, thousands of vacation club units and more. The value
of Disney’s real estate holdings is obscured by the Company’s
conglomerate structure. But, Disney’s real estate is also
the potential source of long duration capital to address balance
sheet and income statement challenges and
opportunities.
Our nominee, Craig Hatkoff, has extensive real
estate and capital markets experience, which would prove invaluable
to the Board in evaluating and implementing, for example, a unique
world class hotel and hospitality real estate investment trust (a
“REIT”). For the last 13 years, Mr. Hatkoff has been an independent
director of SL Green Realty Corp., Manhattan’s largest office
landlord. He has nearly 50 years of public company service as an
independent director, which cannot be said for any of the
current Disney directors.4
Disney could separate its owned real estate,
which represents approximately 44% of its market capitalization5
at cost, into an independent publicly listed REIT
or a series of investment vehicles in which the shares, cash and/or
interests could be distributed to shareholders. 6
Mr. Hatkoff’s substantial expertise extends to
exploring all strategic possibilities with cold
eyes, including the potential separation of Disney into
three entities, beginning with a management reorganization and
leadership selection for each business and resulting in standalone
public companies. Disney may simply be too complex for any one
successor to Mr. Iger to manage holistically, and Blackwells
believes that it is the responsibility of the Board to oversee
these types of analyses in the ordinary course.
Disney’s Physical, Spatial Computing, and
AI-Driven Experiences
Disney has arguably the greatest opportunity set
of any media company in the world as it pertains to AR/VR given its
breadth of media content. Imagine a Disney World where you could
have a lightsaber spar with a Jedi on Tatooine, or team-up with
Simba and traverse the African plains!
The Board must be more focused
on this once in a lifetime shift in consumer behaviour and
interaction. Our nominee Leah Solivan has built her career on
imagining, and creating. She is precisely the candidate that this
Board needs to continue imagining the future of
Disney as we navigate a world that sees physical, digital,
and virtual worlds converging.
Ms. Solivan is deeply immersed in the latest AR/VR and AI trends
as a General Partner at Fuel Capital. She is surrounded by cutting
edge AR/VR and spatial computing technologies, and the founders
that are making it all possible. Prior to Fuel Capital, Ms. Solivan
created TaskRabbit, Inc. (“TaskRabbit”), a pioneering on-demand
marketplace company she founded in 2008. As TaskRabbit’s CEO for
eight years, she scaled the company into an international business
with operations in 44 cities, prior to overseeing TaskRabbit’s sale
to IKEA.
The Blackwells Nominees Fill Critical
Gaps on the Board
Blackwells has been vocal in its support for
Disney’s Board, including its recent additions. However, the Board
can benefit from critical experience and expertise that our
nominees exclusively represent.
The Board today has an abundance of former large
company CEOs and executives from industries such as automobile
manufacturing, pharmaceuticals, banking, and corporate
infrastructure technology, but only one
entrepreneur/founder, Amy L. Chang.
Even a gifted leader like Mr. Iger requires
oversight and accountability. The current Disney Board is
especially reliant on management’s expertise and assurances about
the Company’s strategy and execution. The Board has also struggled
with succession, which, as the tumultuous tenure and haphazard exit
of Mr. Chapek as CEO demonstrated, cannot be driven or planned by
management without direct Board input and oversight.
Moreover, recent concerns
surrounding an information sharing agreement
between Disney and ValueAct, are proof positive that independent
and new perspectives are necessary. Disney’s share price
suffers from a significant information discount, as recently noted
by several key market analysts. Showering one shareholder with
information that is withheld from all other shareholders, will only
make matters worse.
We intend to ensure for all shareholders
that this arrangement is terminated or that shareholders are given
the same access to information that ValueAct seems to
enjoy.
The Trian Distraction
Shareholders are faced with three competing
candidate slates at the 2024 Annual Meeting: Disney’s, Blackwells’
and Trian’s.
We urge our fellow shareholders to be on high
alert with respect to Trian’s campaign and its two nominees, Nelson
Peltz and Jay Rasulo. Mr. Peltz has requested a seat on Disney’s
Board no less than 24 times in the last year and half. During that
time, Mr. Peltz has not offered a single strategic
idea that would benefit shareholders.14 Mr. Rasulo also
lacks the relevant skills and expertise that we firmly believe
Disney could use additional support with.
Begging for Board seats is not a
strategy that will make any money for shareholders. We
strongly urge our fellow shareholders to vote
“WITHHOLD” on the Trian nominees.
Your vote will ensure Blackwells’ three
nominees are elected to serve the shareholders equally and with
needed expertise that the Disney Board needs, working
collaboratively with their fellow Board members and never
defensively prioritizing one shareholder over all the
others.
To learn more about Ms. Schell, Mr. Hatkoff and
Ms. Solivan, we encourage shareholders to visit
www.TheFutureOfDisney.com. Our campaign website will also include
materials for shareholders to evaluate and help make the best
voting decisions.
Disney Shareholders – Please vote your
proxy today on the GREEN universal proxy card “FOR” each of the
Blackwells nominees and the Blackwells proposal.
If you have any questions about voting
your proxy or need replacement proxy materials,
contact:
Morrow Sodali LLC
+1 (800) 662-5200 (toll-free for
shareholders)
+1 (203) 658-9400 (call collect for banks,
brokers, trustees and other nominees)
Blackwells@morrowsodali.com
About Blackwells Capital
Blackwells Capital was founded in 2016 by Jason
Aintabi, its Chief Investment Officer. Since that time, it has made
investments in public securities, engaging with management and
boards, both publicly and privately, to help unlock value for
stakeholders, including shareholders, employees and communities.
Throughout their careers, Blackwells’ principals have invested
globally on behalf of leading public and private equity firms and
have held operating roles and served on the boards of media,
energy, technology, insurance and real estate enterprises. For more
information, please visit www.blackwellscap.com.
Contacts
Media:Gagnier CommunicationsDan Gagnier &
Riyaz Lalani646-569-5897blackwells@gagnierfc.com
Shareholders:Morrow SodaliMichael Verrechia
& William Dooley(800) 662-5200blackwells@morrowsodali.com
IMPORTANT ADDITIONAL
INFORMATION
Blackwells Onshore I LLC, Blackwells Capital
LLC, Jason Aintabi, Craig Hatkoff, Jessica Schell and Leah Solivan
(collectively, the “Participants”) are participants in the
solicitation of proxies from the shareholders of The Walt Disney
Company (the “Company”) for the 2024 Annual Meeting of
Shareholders. On February 6, 2024, the Participants filed with the
U.S. Securities and Exchange Commission (the “SEC”) their
definitive proxy statement and accompanying GREEN
Proxy Card in connection with their solicitation of proxies from
the shareholders of the Company for the 2024 Annual Meeting of
Shareholders. ALL SHAREHOLDERS OF THE COMPANY ARE ADVISED
TO READ THE DEFINITIVE PROXY STATEMENT, THE ACCOMPANYING GREEN
PROXY CARD AND OTHER DOCUMENTS RELATED TO THE SOLICITATION OF
PROXIES BY THE PARTICIPANTS, AS THEY CONTAIN IMPORTANT INFORMATION,
INCLUDING ADDITIONAL INFORMATION RELATED TO THE PARTICIPANTS AND
THEIR DIRECT OR INDIRECT INTERESTS IN THE COMPANY, BY SECURITY
HOLDINGS OR OTHERWISE.
The definitive proxy statement and an
accompanying GREEN proxy card will be furnished to
some or all of the Company’s shareholders and is, along with other
relevant documents, publicly available at no charge on the SEC’s
website at http://www.sec.gov/. In addition, the Participants will
provide copies of the definitive proxy statement without charge,
when available, upon request. Requests for copies should be
directed to Blackwells Onshore I LLC.
1 Source: Proxy Statement filed with the Securities and Exchange
Commission by The Walt Disney Company on February 1, 2024 (the
“Disney Proxy Statement”).2 Source: The Disney Proxy Statement.3
Source: Company Filings, S&P Capital IQ Pro, and analyst
estimates. Pro Forma Disney+ comprises of ESPN, Hulu, and
Disney+. 4 Source: Company Filings, S&P Capital IQ.5
Source: Annual Report on Form 10-K with the SEC by The Walt Disney
Company on November 21, 2023 (the “2023 Annual Report”).
Note (1): Market capitalization calculated as of February 2,
2024. Based on the quotient resulting from dividing (i) the
Company’s gross real estate value of $77,551 million, as disclosed
in the 2023 Annual Report, by (ii) the Company’s market
capitalization. Note (2): Assumes no tax leakage6
Source: Company filings. Note: Assumes the value ascribed to the
REIT spin-off is equivalent to the gross real estate value and
there is no dyssynergies or incurrence of tax leakage.7 Source:
Company’s 2023 10k and analyst estimates.8 2025 Estimated EBITDA
pulled from analyst consensus estimates.9 Note: Sports segment
EBITDA multiple on par with Netflix, Inc. according to S&P
Capital IQ Pro as Netflix has begun to enter into the sports
streaming world with its deal with the WWE.10 Note: Entertainment
segment EBITDA multiple on par with Netflix, Inc. according to
S&P Capital IQ Pro.11 Note: Experiences segment EBITDA multiple
on par with Hilton Worldwide Holdings Inc. according to S&P
Capital IQ Pro.12 Source; McKinsey & Co, June 2022.13 Source:
Company filings, analyst consensus estimates. Note: Assumes a 10%
uplift to analyst consensus revenue estimate from a successful
implementation of a VR/AR/AI strategy based on comparative analysis
from analysts using AAPL, META integration of VR/AR/AI to Disney.14
Source: The Walt Disney Company 2024 Proxy Filing.
Photos accompanying this announcement are available
at:https://www.globenewswire.com/NewsRoom/AttachmentNg/ca9c7fe3-fdb6-4157-bf79-6abf50d95e5ahttps://www.globenewswire.com/NewsRoom/AttachmentNg/724607f3-818b-4f1f-b57f-0c92d3f54fb1https://www.globenewswire.com/NewsRoom/AttachmentNg/bf9c5bfd-5e20-4b29-bf3c-30764e17c727https://www.globenewswire.com/NewsRoom/AttachmentNg/b4bc5243-c0c3-461e-a32e-ec17b56e7d6e
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