Nelson Peltz and Jay Rasulo Release the White Paper (Part One)

The amount of stories we're about to cover for the next 48 hours is insane. There is so much new stuff inside the Trian Group white paper refuting Disney is bonkers. We're currently going through the analysis (which we thinks points to Trian having followed our channels and information)... but suffice to say there is so much to discuss that we don't even know where to begin.

That Park Place is going to livestream this evening to begin coverage of everything that has been presented. I'm not sure Disney is prepared for this. Just prior to Iger's Town Hall Q&A, Trian has released the most data-dense information I think I've ever seen in a something like this. So... to begin... here's just a taste of what is inside.

More coverage to come very, very soon. For now, here's JUST Page 58:

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Fox Was a Strategically Flawed $71 Billion Acquisition… 

58 Disney’s 2017 Strategic Rationale(1) 6 Years Later… 

“21st Century Fox’s premier film and television studios and respective libraries significantly enhance our content output capability and worldclass portfolio of intellectual property” 

Despite being billed as a studio and IP acquisition, ~67% of Fox’s pro forma EBITDA was generated from linear TV cable networks(2) (increasing exposure to a challenged business) Disney’s content spend has doubled since the acquisition as the Company ramped up content spend for Disney’s core franchises and Disney+ originals rather than relying on Fox library and acquired IP. 

“Expands our global reach in attractive, rapidly growing regions and provides new avenues for growth” 

Fox’s India (Star) business has collapsed; reportedly Star was expected to see EBITDA decline by 50% in 2023 and lose money in 2024(3) Agreed to a merger of its India (Star) business with Reliance Industries that valued Disney’s assets at less than carrying value, leading to a ~$2bn impairment (sold from a position of weakness). 

In 2020 / 21, Disney shut down 130 international TV channels and recorded a $5bn impairment. 

“Broadens our global direct-toconsumer (DTC) capabilities, which will allow us to deliver a more compelling entertainment experience to consumers” 

Acquiring a controlling interest in Hulu, a general entertainment platform, seemed to be at odds with Disney’s strategy to focus on “franchise content” Hulu Put / Call agreement with Comcast has created a complicated drawn-out negotiation that will cost Disney billions Disney+ Hotstar subscribers declined 39% in FY 2023 after losing rights to IPL cricket. 

“Delivers attractive Financial Benefits – $2B in cost synergies, accretive to EPS for the second fiscal year post close…” 

Acquisition put stress on balance sheet and diluted shareholders materially; cut dividend Adj. EPS has declined ~50% since the acquisition closed The performance of Disney’s media assets have deteriorated since the acquisition, calling into question claimed synergies.