By Beth Kowitt
When the Walt Disney Co. board brought back Bob Iger as chief executive officer, it was largely to regain his well-regarded skills as a deft diplomat. What he has relied on lately is his ability as a street fighter.
Start with the company’s cost-cutting efforts, which are likely to come up at the annual shareholder meeting on Monday. Disney began long-expected layoffs last week, part of a plan to slash 7,000 employees and $5.5 billion in costs from the entertainment giant. Among those cut in the first round was Isaac Perlmutter, chairman of the company’s Marvel Entertainment division.
___STEADY_PAYWALL___Positioning the longtime executive’s exit as part of a broader reorganization is a convenient way for Disney to finally rid itself of what has been a thorn in its side for more than a decade. But in the last year, Perlmutter had become much more than a thorn. He was instrumental in activist investor Nelson Peltz’s fight to gain a seat on the Disney board — a campaign that Perlmutter instigated last summer.
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It’s worth noting that a current employee teaming up with an activist to attempt a coup is pretty much unheard of in corporate America. But the whole ordeal, rife with political and personal overtones, exemplifies just how deeply the culture wars have infiltrated every corner of the business world.
Perlmutter made the initial introduction between his buddy Peltz and the CEO at the time, Bob Chapek, whom the board later ousted to make way for Iger’s return. He also advocated for Peltz with Safra Catz, Disney’s chief financial officer, general counsel and director, telling her that “without Peltz there, former executives including Mr. Iger, would be back at Disney.”
These behind-the-scenes dealings are well-known because Disney detailed Perlmutter’s extensive involvement in its filings. The company likely took this unusual step in part to undermine Peltz’s case, suggesting the proxy battle had more to do with his friend’s personal vendetta against the company and Iger than it did with creating value for shareholders.
And for Perlmutter and Iger, it was very much personal. Perlmutter sold Marvel to Disney for $4 billion in 2009, giving the company access to a new audience through the world of superheroes. The deal also made Perlmutter the company’s second-largest shareholder at the time and a powerful figure within the Disney universe. But over the years, Iger chipped away at Perlmutter’s control, leaving him embittered and marginalized.
Iger said as much about his history with Perlmutter on CNBC, soon before Peltz announced he was satisfied by Iger’s cost-cutting plan and was backing off. (Ironically, that’s the same cost-cutting plan Disney used to justify laying off Perlmutter.) In the interview, Iger brought up the “curious dynamic” between Perlmutter and Peltz and said taking jurisdiction of Marvel movies out from under Perlmutter had created bad feelings that he believed still existed. “What the link is between that and Nelson, his relationship. I think that’s something you can speculate about. I won’t,” he said.
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A key part of Iger’s strategy has always been to let the companies he acquires — Pixar, Lucasfilm, ESPN and Marvel — maintain their cultures and autonomy. But with Perlmutter at the helm of Marvel, that regularly raised issues. Iger details in his memoir how on Perlmutter’s watch, Marvel resisted casting female and Black superheroes, writing, “I called Ike and told him to tell his team to stop putting up roadblocks and ordered that we put both Black Panther and Captain Marvel into production.”
The enmity between Iger and Perlmutter had to do more than just with business, however. They also clashed in both style and politics. Iger embraces the Hollywood limelight, is a staunch Democrat who talked of running for president and has vocally supported left-leaning causes. Perlmutter is an ultra-conservative recluse with a membership to Mar-a-Lago, a big financial backer of Donald Trump’s campaigns and an unofficial adviser during his presidency. He has also supported Governor Ron DeSantis of Florida and likely bristled as he watched DeSantis and others in his circle cast Disney as a “woke” company.
Iger has long walked the fine line between massaging the egos of Hollywood’s biggest players while also acting as a shrewd dealmaker. When Iger took over from Chapek, it was in part because his hand-picked successor had demonstrated that he lacked some of that same finesse. Chapek badly botched the company’s response to Florida’s “Don’t Say Gay Bill,” angering both employees and DeSantis — an ordeal the Disney board at least thought Iger would have navigated with more sensitivity.
But in just the last week Iger has altered his tactics, opting for more of that shrewdness rather than diplomacy. In addition to ridding himself of Perlmutter (at least for now), he did an end run around DeSantis, who had retaliated against Disney by revoking its special tax district status, which allowed the company to self-govern Disney World. But before the new governing structure could take place, Disney pushed through changes limiting the powers of the incoming board. He also addressed DeSantis head-on at the shareholder meeting on Monday, saying that the way he has tried to “punish” the company for speaking out on social issues is “not just anti-business, but anti-Florida.”
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While Iger’s instinct historically might have been to smooth things over, he must have known the response would only rile DeSantis further. Which it did. DeSantis’s response: “You ain’t seen nothing yet.”
Whether it’s in his dealings with Perlmutter or DeSantis, Iger seems to have realized that the two were playing a much different game and that his old way of doing business wouldn’t cut it. A new messier era has begun.
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