Disney cinematic drought primed Peltz proxy fight

Disney has struggled to return to the lofty box office records of 2019 — and that may have helped open the door for its recent troubles with activist Nelson Peltz.

Just four years ago, the studio had seven billion-dollar films, which contributed to a global box office haul of more than $13.2 billion. Its studio entertainment segment posted revenue of $11.1 billion and operating income of $2.69 billion that year.

More recently, the House of Mouse has seen these revenues fall below $9 billion in both 2022 and 2023 as well as six straight quarters of operating losses within its content sales business, in which its box office and home entertainment divisions reside. A combination of pandemic shutdowns, dual Hollywood labor strikes and a failure to connect with audiences have lead to a bleak period of Disney’s theatrical business.

Other than 2022’s “Avatar: The Way of Water,” which Disney acquired as part of its $71 billion deal for the majority of 21st Century Fox, the company has not had a movie generate more than $1 billion since the last Star Wars movies in 2019, according to data from Comscore. Sony produced and distributed “Spider-Man: No Way Home,” which made $1.9 billion, although Disney’s Marvel Studios did serve as a co-producer.

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

Yet, other big-budget franchise films have flopped. “Indiana Jones and the Dial of Destiny” in 2023 generated $378 million globally, “Ant-Man and the Wasp: Quantumania” secured $476 million worldwide, unusually low for a Marvel film (until “The Marvels” reached just over $200 million late last year) and Pixar’s “Lightyear” collected less than $250 million globally in 2022.

Disney’s recent struggles at the box office have become a key piece of fodder for Trian Fund Management as Peltz seeks a board seat for himself and former Disney CFO Jay Rasulo. Peltz has been critical of the Disney board, stating it “lacks focus, alignment and accountability” and has failed to act as the company’s earnings, reputation and stock price have suffered.

Disney shareholders will vote on board nominations at the company’s shareholder meeting 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 recent commercial disappointments for the studio.

“We are concerned with the current state of Disney’s studios and creative processes across the portfolio,” the white paper read.

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

“People go to watch a movie or a show to be entertained,” Peltz said in recent interview with The Financial Times. “They don’t go to get a message.”

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

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

The film “Black Panther” did not have an all-Black cast and “Captain Marvel” and “The Marvels,” in which Captain Marvel is the central character, did not have all-female casts.

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

Peltz has also taken particular issue with Disney’s failed succession plans and what he’s described as a disjointed streaming strategy.

Storytelling isn’t the only factor in Disney’s recent dismal box office performance, however.

During the pandemic, the company debuted animated films on streaming, and parents got used to the idea, denting box office sales.

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

And on top of it all Disney has had to contend with a rapidly changing consumer who needs more than just a nostalgic title to be lured away from their couch and into a cinema, especially as budgets tighten.

Iger has addressed these theatrical 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 wanted Marvel to have more fresh content and to do fewer sequels, or at the very 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 have to entertain first. It’s not about messages,” he said.

Change at Disney’s studios will take time, especially after shutdowns due to the writers and actors strikes of last summer hindered production. However, box office analysts foresee a solid turnaround coming for the company in 2026.

The 2025 movie calendar wraps up with a third Avatar film in mid-December, meaning ticket sales will bleed into the following year. Then that summer starts with an Avengers team-up film, currently titled “The Kang Dynasty,” followed by a “Mandalorian” Star Wars movie over Memorial Day weekend. Another Star Wars film will round out Disney’s big year in December 2026.

Those franchises’ track records suggest they could drive a staggering box-office haul.

“Disney reached the absolute pinnacle in 2019 … boasting an assortment of films that perfectly placed 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 the 100-year flood,” said Paul Dergarabedian, senior media analyst at Comscore.

The 2026 slate also includes three untitled Marvel movie dates, an unnamed Pixar film, a Disney Animation film slated for Thanksgiving and six other Disney titles.