Disney Responds to Call For Cost-Cutting Measures

in Entertainment

walt disney company headquarters sign

Credit: Disney

The Walt Disney Company has issued an official response to a call for cost-cutting measures.

The Walt Disney Company has become the single most significant media power in the country today and boasts many popular intellectual properties and studios, including Disney Pixar, Marvel, Star Wars, and much more. In addition, Disney is home to several theme parks worldwide, including Disneyland Resort in Southern California and Walt Disney World Resort in Orlando, Florida.

mickey proposing to minnie in front of cinderella castle at disney world
Credit: Disney

Recently, activist investor and Third Point Management CEO Dan Loeb wrote a letter to Disney urging the company to make a sweeping amount of changes to cut costs and generate free cash flow.

According to a report from Fox Business, the letter asked The Walt Disney Company to consider five initiatives, including cost-cutting measures.

“Loeb disclosed a “significant stake” in the entertainment giant and asked it to consider five initiatives, including: A cost-cutting program that addresses margins and “the disposal of excess underperforming assets”; Preserving a suspension of its dividend initiated during the COVID-19 theme park closures and using free cash flow to pay down debt, repurchase shares or organically reinvest in the business; Acquiring Comcast’s 33% minority stake in Hulu prior to its contractual deadline in early 2024 and integrating the streaming service into Disney+; Spinning off sports network ESPN; and refreshing the company’s board with members who have experience in technology, advertising, and consumer engagement.”

disney plus drones in sky
Credit: ABC 6 Philadelphia

In a response, CEO Bob Chapek responded to the call by touting his board of directors and saying that Disney welcomed views from all of its investors.

“Our independent and experienced board has significant expertise in branded, consumer-facing, and technology businesses as well as talent-driven enterprises,” the statement read. “The board has also benefited from continuous refreshment with an average tenure of four years.”

It’s unclear at this point if any of these proposed initiatives will be considered.

What do you think of Disney’s response to these proposed initiatives? Let us know in the comments!

View Comment (1)