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Disney’s theatrical drought may have opened a door for activist investor Peltz

Harrison Ford returns as Indiana Jones in Indiana Jones and the Dial of Destiny.

Disney

Disney has struggled to return to the high box office grosses of 2019 – and that may have helped open the door to its recent troubles with activist Nelson Peltz.

Just four years ago, the studio had seven billion-dollar films contributing worldwide box office receipts of more than $13.2 billion. The studio entertainment segment had revenue of $11.1 billion and operating profit of $2.69 billion this year.

More recently, the House of Mouse saw those revenues decline to under $9 billion in both 2022 and 2023, as well as six straight quarters of operating losses in its content sales business, which houses its box office and home entertainment divisions . A combination of pandemic-related closures, two Hollywood worker strikes and a lack of connection with audiences has led to a bleak time in Disney’s theater business.

Aside from 2022’s “Avatar: The Way of Water,” which Disney acquired as part of its $71 billion deal for majority ownership of 21st Century Fox, the company has since the last Star Wars films in the year No film grossed more than $1 billion in 2019, according to Comscore. Sony produced and distributed “Spider-Man: No Way Home“, which grossed $1.9 billion despite Disney’s Marvel Studios serving as co-producer.

Disney is coming close with 2023’s “Guardians of the Galaxy: Vol. 3,” which grossed nearly $900 million at the global box office, as well as 2023’s “Doctor Strange in the Multiverse of Madness.” 2022 ($955 million) and Black Panther: Wakanda Forever ($859 million) and Thor: Love and Thunder ($760 million).

But other big-budget franchise films have failed. “Indiana Jones and the Dial of Destiny” grossed $378 million worldwide in 2023, “Ant-Man and the Wasp: Quantumania” secured $476 million worldwide, unusually little for a Marvel film (until “The Marvels “most recently reached just over 200 million US dollars). year) and Pixar’s “Lightyear” collected less than $250 million worldwide in 2022.

The box office blues as fodder for Trian

Disney’s recent box office woes have become a major issue for Trian Fund Management as Peltz seeks a seat on the board for himself and former Disney CFO Jay Rasulo. Peltz was critical of the Disney board, saying it lacked focus, direction and accountability and failed to act as the company’s profits, reputation and stock price suffered.

Disney shareholders will vote on board nominations at the company’s shareholder meeting on Wednesday.

As part of Trian’s white paper released in early March, the fund listed “Wish,” “Indiana Jones and the Dial of Destiny,” “Lightyear,” “The Marvels” and “Haunted Mansion” as examples of the studio’s recent commercial disappointments.

“We are concerned about the current state of Disney Studios and the creative processes across the portfolio,” the white paper said.

Peltz himself has publicly questioned what he calls Disney’s “woke” content strategy. The company’s creative team has actively sought to create films and television shows that focus on non-white and non-male characters and explore narratives outside of heteronormativity.

“People watch a movie or a show to be entertained,” Peltz said current interview with the Financial Times. “You don’t go to get a message.”

In particular, he highlighted Marvel films that star Black Panther, an African prince-turned-king, and Captain Marvel, a U.S. Air Force pilot who gains extraordinary cosmic powers.

“Why do I have to have an all-female Marvel movie? Not that I have anything against women, but why do I have to do this? Why can’t I have a Marvel movie that’s both? “Why do I need an all-black cast?” he later said in the Financial Times interview.

The movie Black Panther did not have an all-black cast, and Captain Marvel and The Marvels, in which Captain Marvel is the main character, did not have an all-female cast.

Peltz’s comments echo previous comments by former Marvel Entertainment Chairman and CEO Ike Perlmutter, who was ousted by Disney last year and is a friend of Peltz and a supporter of his proxy fight.

In particular, Peltz also commented on Disney’s failed succession plans and his own disjointed streaming strategy.

Disney has already responded to theatrical concerns

However, storytelling isn’t the only factor behind Disney’s recent dismal box office results.

During the pandemic, the company debuted animated films on streaming, and parents got used to the idea, resulting in a drop in box office revenue.

According to CEO Bob Iger, Disney has also diluted its Marvel brand with too many Disney+ spin-off shows and theatrical sequels.

And on top of that, Disney had to contend with a rapidly changing consumer who needs more than just a nostalgic title to get them off the couch and into the theater, especially as budgets tighten.

Iger has addressed these histrionic concerns several times since returning to the helm of the company in late 2022.

Last March, he told attendees at the Morgan Stanley Technology, Media and Telecom Conference that he wants Marvel to have more fresh content and make fewer sequels, or at least be more selective about which sequels it greenlights. He reiterated that sentiment in November during the DealBook Summit in New York, where he also said he would no longer tolerate his company’s partners and creative team prioritizing messaging over storytelling.

“We need to entertain first. It’s not about messages,” he said.

Change at Disney studios will take time, especially after shutdowns caused by writers and actors strikes last summer hampered production. However, cash analysts expect the company to see a solid turnaround in 2026.

The 2025 cinema calendar ends with a third Avatar film in mid-December, meaning ticket sales will carry over into the following year. Then the summer begins with an Avengers team-up film, currently titled The Kang Dynasty, followed by a Mandalorian Star Wars film over Memorial Day weekend. Another Star Wars film will round off Disney’s big year in December 2026.

The track record of these franchises suggests that they could achieve stunning box office success.

“Disney reached its absolute peak in 2019… with a selection of films that perfectly integrated the disparate puzzle pieces of Marvel, Pixar, Lucasfilm and Walt Disney Animation into a non-stop hit machine, and the result was the box office equivalent of that 100-year flood,” said Paul Dergarabedian, senior media analyst at Comscore.

The 2026 slate also includes three unnamed Marvel film dates, an unnamed Pixar film, a Disney animated film scheduled for Thanksgiving and six other Disney titles.

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