Disney Gets Dirty in Its Battle Against Nelson Peltz

After Jim Cramer declared his support for Nelson Peltz in the proxy fight for Disney's Board of Directors, it was always going to get very ugly. Now Disney is out swinging. Like a presidential campaign in late October, the Mouse House is fighting mad and ready to sling some mud. Once Peltz hit the entire board and the legacy of Bob Iger with claims about their stewardship of the company and its shares, now the attacks are coming from the happiest place on earth.

Particularly, one swipe that must be painful to former CFO Jay Rasulo is the trashing of his legacy post-Disney. After Rasulo left the company in 2016 over Bob Iger's failure to ever leave, the then-Chief Financial Officer of Disney looked for complex and challenging next steps to tackle for other companies. Mr. Rasulo also faced off and defeated a particularly aggressive form of cancer that certainly took some attention out of his ability to navigate his business life. Still, Rasulo was brought in to work on IHeartMedia in 2019 as a member of the board. The company was particularly challenging as it was facing bankruptcy at the time of Rasulo's entry. Thus, the goal for its board wasn't necessarily to grow the company, but rather to keep it from going under and into non-existence. So far, that has been achieved.

But for a Disney company looking to slime their former "analog" CFO, the details aren't necessarily important. Thus, one of the "fact v fiction" slides the company has put out against Rasulo features the claim that Rasulo's oversight of iHeartMedia saw a 9i0% decline in its stock value. The message that Rasulo came in to save the company from total collapse isn't mentioned. 

Still, it's an effective attack from Disney against Rasulo. And in a time such as this, you can expect Disney to act like a wounded politician facing a deadly October Surprise. Certainly, having Jim Cramer advocate for Trian is akin to such a thing. No, Cramer doesn't have the best track record in the world with stock choices. And no, if you followed his every suggestion, you wouldn't be a wealthy person for long. But simultaneously, Cramer has a big audience... a big audience of normal shareholders not named Blackrock or Vanguard. And that poses a real threat to Disney and the possibility of losing two board seats to moderate, apolitical individuals not beholden to Bob and uninterested in a monolithic succession plan to another Iger-subservient. 

With weeks to go, this is only the beginning. Things will get much, much uglier.