Media industry veteran Tom Rogers recently expressed his views on the ongoing situation at The Walt Disney Company (NYSE:DIS). Rogers commented on the perceived effectiveness of Disney CEO Bob Iger and the board’s approach to his leadership, particularly in the context of Disney’s acquisition of 21st Century Fox assets.
What Happened: Rogers’ remarks came as the debate over Disney’s board decisions intensified with the proxy war involving Iger and activist investor Nelson Peltz.
Rogers highlighted that Peltz has started gaining support for being nominated as a Disney board member.
“Clearly there is some sentiment that another voice on the board that isn’t necessarily in line with all of management’s thinking is something that Disney could use,” he said.
While Iger also has substantial support in the ongoing proxy war, Rogers added that it doesn’t discard the fact that Iger as a CEO has made wrong acquisitions.
“Thinking Bob Iger has done a good job is not necessarily inconsistent with the fact that you might think that the board has been too deferential toward him. Case in point, the FOX acquisition which was really not a good acquisition,” he said.
Rogers added that the board awarding him for the acquisition might indicate the board’s closeness to the management which prevents them from providing the necessary oversight.
“Both thoughts can be true here – Iger is a good CEO and the board may be even too deferential and could use some new voices,” he said.
Why It Matters: Disney is currently embroiled in a proxy battle with Peltz, who has voiced concerns over the company’s direction and management’s ability to deliver value to shareholders. Peltz firm thinks the board overpaid for assets of 21st Century Fox, an acquisition that Iger considers as one of his personal bests.
In contrast, Morgan Stanley’s James Gorman, a recent addition to Disney’s board, has expressed confidence in the company’s trajectory, pointing to a more than 30% increase in Disney’s stock since the beginning of the year.
The Justice Department has also reviewed the proposed streaming service joint venture involving Disney, Fox, and Warner Bros. which has raised concerns about market competition and control over U.S. sports rights.
Price Action: On Tuesday, Disney’s stock closed 0.48% higher at $119.93, according to data from Benzinga Pro.
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