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Welcome back everyone. 
We have some breaking news 

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Disney stock as we know has not 
been doing well over the past 

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year and a half. 
It has not been magical. 

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The company stock price is down 
49 percent from its all time 

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high and even over a longer time
periods, the 5 years to 10 years

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Disney is basically flat, its 
underperformed, the S&P 500 by a

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huge margin and for a lot of 
investors, this has been 

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perplexing because Disney's one 
of the it's one of the 

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strongest. 
Remote most unique dominant 

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consumer brands in the world and
it's been underperforming it 

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spares. 
It's been underperforming the 

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market. 
It's been doing terrible. 

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I own Disney stock, I've owned 
it in my dividend growth 

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portfolio and it doesn't even 
pay a dividend anymore. 

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It has been my single worst 
holding the single worst 

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performing one in that entire 
portfolio, but dizzy investors 

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may have a rescuer here. 
His name is Nelson Peltz and he 

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is a billionaire activist 
investor. 

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Now Nelson like lat. 
Other investors doesn't like 

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what he sees going on with 
Disney. 

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He actually wrote a very 
critical presentation. 

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This slide deck called Disney 
restoring the Magic by tree and 

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partners who is Nelson. 
Peltz has firm. 

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This goes through, and just 
details all the things that 

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Disney's done, their massive 
compensation packages for 

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executives, paying themselves. 
Hundreds of millions of dollars,

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that isn't linked to 
performance. 

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They're bad Acquisitions. 
Overpaying for the fox deal, 

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they're bloated. 
A structure costs going up 

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faster than the rate of Revenue.
He's highlighting a lot of 

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problems in the slide deck that 
we're going to look at. 

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And he believes that he can be 
the solution. 

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He thinks he can turn this 
company around and he has a long

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history of doing just that he's 
been an activist investor and a 

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lot of other consumer Brands 
companies like Disney and he's 

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been able to get the company in 
shape and back on track, and he 

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has a very good track record, 
very good at turning these type 

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of companies around. 
So we're going to go through 

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this slide deck and it is a 
detailed. 

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Assessment of Disney, this is 
the single best piece of 

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research. 
I've seen on Disney in the past 

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year, it gives a clear 
illustration of everything 

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that's gone wrong with the 
company and what he thinks he 

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can do to help fix this. 
So we're going to be going 

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through that and just for the 
record before we even get into 

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it, I am firmly on Nelson. 
Peltz aside. 

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I think you should get a board 
seat. 

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I think you should be involved 
in Disney and right away. 

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Disney does not like this Disney
doesn't want any changes. 

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Disney Executives said on 
Wednesday afternoon in a 

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statement. 
Moment that they're opposed to 

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having him join the board seat. 
They only want him to have one 

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seat. 
They don't want him to be 

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involved in the company at all. 
Why wouldn't they want him to 

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join? 
The board of the company will? 

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Obviously right now, 
everything's working out. 

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Well, for the Insiders of the 
company. 

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Executives are getting paid. 
Employees are getting paid. 

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It's the shareholders that are 
being hurt. 

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So having said that, let's go 
ahead and jump into this. 

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This is going to be a good one. 
I think this one is going to be 

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chock-full of information. 
And if you're looking at 

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potentially investing in Disney,
I think this is a good. 

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Point. 
Because this really does frame 

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where the company is and what 
direction it could possibly go. 

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Now before we get into the slide
deck presentation, I first want 

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to go to a interview clip with 
Nelson Peltz. 

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This is just today and you can 
kind of meet them and get to 

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know who's fighting on your 
behalf as a Disney shareholder 

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and I truly truly believe that 
is the case. 

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There's some investors, some 
activist investors that are 

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really short-term focused the 
more like vultures where they 

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come in, and they just want a 
quick price, pump in a stock and

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then they're out now. 
Nelson Peltz is not that type of

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person. 
He has a very long-term 

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orientation, he is focused on a 
five, six, seven year, period 

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with a company and he has the 
history to prove that. 

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So I don't view this guy as a 
vulture. 

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I don't view him as a bad 
investor. 

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I think he is on behalf of 
investors. 

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Trying to do something positive 
for Disney, he's trying to hold 

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them accountable. 
So let's first go ahead and play

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this clip where he explains why 
he picked his knee changing a 

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quote from a famous movie with 
my first question of all the 

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companies and All the industries
and all the world. 

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You got to walk into Disney. 
Why? 

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Why Disney? 
And why you David? 

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Good morning and good morning, 
Jim. 

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Why not? 
We have skin in the game, you 

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know, we looked at a company and
we look at Disney and we say 

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that this is the most Advantage 
consumer company on the planet. 

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And we love it. 
That's the reason why we're 

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here. 
However, the TSR the total 

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shareholder return of one, three
five, ten years has materially 

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underperformed, the S&P that 
right there is a good enough 

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reason for an activist investor 
to get involved. 

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When you have a company like 
Disney with the brand value, 

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with the franchise, with the 
moat that Disney has. 

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Everybody agrees that Disney has
a wide moat with their parks and

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they underperform the index and 
the one-year, the three-year the

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five year and the tenure it's 
time for someone to step in and 

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just go what's going on here, 
you're not doing well for 

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shareholders. 
There's companies that are much,

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they're not as impressive of 
companies, we got companies like

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Dollar General. 
Feeding Disney to Pieces. 

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So we have this this wide moat 
company, with IP with all these 

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unique assets, just getting 
crushed by the market. 

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Let's go ahead and go through 
this presentation here. 

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Disney is the most Advantage 
consumer company in the world. 

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It has unrivaled global scale 
Irreplaceable Brands, inimitable

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parks and can leverage the 
Disney flywheel to monetize its 

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intellectual property for these 
reasons we believe the company 

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is, well, positioned to succeed.
I agree with this. 

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This is the initial thesis of 
Disney. 

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However, Disney's recent share 
price and operating performance 

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have been disappointing. 
Total shareholder returns has 

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materially underperformed, the 
S&P 500 and proxy pairs over the

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one-year three-year five-year 
and ten year periods. 

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Disney Shares are currently 
trading at an eight-year. 

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Low operating performance has 
deteriorated including 50% 

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Decline and adjusted EPS from 
Financial 2018. 

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We believe the current investor 
sentiment on Disney is at an 

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all-time low. 
I would agree with that 

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reflecting the Truth that Disney
is a company in crisis and faces

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many challenges that way on the 
company's investment prospects. 

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While we acknowledge that 
Disney, like many media 

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companies is undergoing 
challenges pivoting to 

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streaming. 
We believe that many of the 

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company's current problems are 
self-inflicted and need to be 

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addressed. 
This is true as well. 

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Disney will try to say we're 
just in a transitional period. 

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We're going to streaming and 
they're trying to do that to 

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mask all the self-inflicted 
wounds, they've given 

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themselves. 
There's lots of companies 

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transitioning, the streaming 
Disney has made Some huge 

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blunders to make this much much 
worse than it needs to be tree 

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and believes that it is, well, 
positioned to facilitate 

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positive changes at Disney, 
given our experience investing 

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in and serving on the board of 
directors of Blue, Chip 

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companies and working 
collaboratively with management 

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teams and boards to optimize 
corporate governance strategy 

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operations and capital 
allocation. 

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They say that they realize 
Disney's undergoing a lot of 

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changes quickly and they're not 
trying to create additional 

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instability by replacing Bob 
Iger. 

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So way that Disney will try to 
defend, this is say that Nelson 

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Peltz is coming in and he's 
causing more havoc and chaos and

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investors should be worried. 
This activist investors coming 

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into even screw things up, 
that's what they'll try to do. 

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That will be Disney's defense. 
Here this is just causing more 

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of a Ruckus and more problems. 
Not the case. 

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What he's asking for is very 
reasonable and he has a history 

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to show that he doesn't cause a 
stir, he doesn't screw up 

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companies by coming in and 
leaving them. 

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Disney's trading at an 
eight-year low, we can look at 

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this price Performance chart 
it's just miserable. 

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This is a completely miserable 
price performance chart the same

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price since 2000 15 2015, 8 
years from now and even so it's 

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not like investors are happy to 
buy the dip. 

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Most of them are incredibly 
discouraged. 

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So we're at an eight-year low 
and it doesn't feel the same as 

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some other companies that are 
are dipping down. 

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This isn't like Google or 
Microsoft Azure Amazon, that's 

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dipping. 
This is where investors are very

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discouraged with Disney. 
So we have some problems. 

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Mom's here. 
Now the next two pages. 

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I'm not going to go over all of 
them. 

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It's basically Tree on trying to
present that they are not 

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vulture capitalists. 
They don't come in and try to do

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quick bumps and stock prices 
that are at the long-term 

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detriment of the company, what 
they've proven throughout their 

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track record is they hold 
companies on average for six 

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years, the average retail 
investor holds a company for 

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five months. 
So they are very long-term 

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oriented and their performance 
while holding companies that 

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they're actively involved in is 
very good Market beating by nine

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hundred basis points per year. 
So they have a huge long track 

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record of outperformance with 
their activist investors from 

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the data. 
There is nothing I can find of 

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why Disney has any reasonable 
excuse to not allow them to have

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a board member. 
It just doesn't make sense. 

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The only reason I could see why 
is for selfish reasons from 

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Disney that they don't want to 
have accountability that they 

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don't want anyone. 
Telling them what to do. 

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Even if it is a big shareholder 
of the company, Disney 

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consistently underperforms 
Disney's tenure performance 

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here. 
It's given a total return of 107

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percent. 
The S&P 500 has given you twice 

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as much and then companies proxy
pairs. 

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I'm not sure what these are but 
out assume like Comcast other. 

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Other media companies have given
a total return, a four hundred 

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seventy eight percent. 
So even relative performance to 

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their industry, they can't use 
that excuse. 

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Either, and these are the pairs 
that Disney picks. 

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Not that tree mpix, not that 
Nelson Peltz. 

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These Are Disney's pairs that 
they pick as their Pairs and 

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their underperforming them 
widely. 

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We look at the five year, 
they're down 10% on the 

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five-year. 
The company's peers are up, 26% 

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in the S&P, 500 is up 56%. 
And then this, this just goes on

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every time frame the three are 
the same thing. 

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They're down 34 percent 25 
percent below their pairs. 

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And sixty percent below, the S&P
500. 

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On the one year, they are down 
39 percent in the past year. 

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So zooming in zooming out 
doesn't matter which way you 

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slice it. 
Disney is underperforming 

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persistently. 
Disney's financial performance 

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has been disappointing. 
This is a case where it's not 

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just the stock that's 
underperforming. 

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It's not just multiple 
compression. 

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The company's operating 
performance has been incredibly 

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poor. 
The only thing that they're 

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really growing is revenue. 
So we have Revenue growth here. 

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That's great. 
But again, Revenue growth isn't 

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profitability, 24 billion 
dollars Revenue. 

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Increased driven by the 21st 
Century Fox deal. 

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So this is done by Acquisitions,
it's easy to buy Revenue. 

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Companies can do something 
called buying Revenue, where 

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they just buy more companies 
that grows the revenue but they 

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have to dilute the shareholder 
to do that. 

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So even though it looks good on 
paper because revenues going up,

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they diluted you, you don't own 
as much of that Revenue. 

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So this 41 percent Revenue gain 
for buying Fox is this was done 

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by a lot of dilution in a ton of
debt. 

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Now they have interest payments 
so it was not a creative to the 

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investor. 
This didn't benefit the investor

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at all even though the revenue 
has gone up 41% their costs have

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gone up. 66 percent. 
So costs are outpacing Revenue 

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which means the margins are 
going down. 22 billion dollar 

230
00:11:33,800 --> 00:11:38,200
increases in cost of goods sold 
and a 990 basis point increase 

231
00:11:38,500 --> 00:11:42,000
as a percentage of Revenue. 
So costs are growing as a 

232
00:11:42,008 --> 00:11:45,200
percentage of Revenue, we have 
sales General and Illustrative 

233
00:11:45,200 --> 00:11:49,200
going up 85%, outpacing Revenue.
We have the adjusted ibadah 

234
00:11:49,200 --> 00:11:51,500
margins here. 
Look at the ibadah margins, 

235
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they've gone from 30 percent to 
16 percent margins are being cut

236
00:11:55,800 --> 00:11:59,700
in half going down 23% since 
2018. 

237
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They point this out as a 
critical part of the company. 

238
00:12:03,300 --> 00:12:06,400
Again, we have the free cash 
flow hair free, cash flow 

239
00:12:06,400 --> 00:12:09,700
conversion of Revenue. 
Went from 16.5 percent to 1.3 

240
00:12:09,700 --> 00:12:13,100
percent down to 89 percent, 
adjusted earnings per share down

241
00:12:13,100 --> 00:12:17,800
50% adjusted. 
Dilution per share, 21%, 

242
00:12:17,800 --> 00:12:21,000
dividends per share, well, that 
just completely got scrapped. 

243
00:12:21,000 --> 00:12:24,200
So that's down 100%. 
And then the net leverage amount

244
00:12:24,200 --> 00:12:25,900
of debt. 
The company has has increased by

245
00:12:25,900 --> 00:12:29,200
a hundred and eighty-seven 
percent every single operating 

246
00:12:29,200 --> 00:12:32,900
metric that you can really look 
at aside from revenue, has gone 

247
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in the wrong direction, and the 
revenue again was not a creative

248
00:12:35,800 --> 00:12:38,400
because it was a bolt on with 
massive amounts of debt. 

249
00:12:38,700 --> 00:12:42,400
And with dilution it did not 
benefit the shareholder at all. 

250
00:12:42,600 --> 00:12:44,600
And most of that Leverage is 
caused by the FAA. 

251
00:12:44,800 --> 00:12:47,900
Acquisition, which he talks 
about even further in this 

252
00:12:48,000 --> 00:12:51,000
presentation here. 
And they even highlight this is 

253
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not Bob capex issue. 
While Bob Iger just rejoined. 

254
00:12:55,100 --> 00:12:58,800
The board, he has essentially 
served on the board since 2000 

255
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with only a short respite from 
January 10 months. 

256
00:13:02,600 --> 00:13:06,100
So basically, the story right 
now, is that Disney, it was in 

257
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trouble and Bob Iger left and 
now. 

258
00:13:08,600 --> 00:13:10,800
It's going to be saved because 
Bob iger's back. 

259
00:13:11,000 --> 00:13:14,600
And what Nelson Peltz is doing 
here is pointing out that first 

260
00:13:14,700 --> 00:13:18,200
Of all even with Bob Iger at the
helm and even with him giving 

261
00:13:18,300 --> 00:13:21,400
most of the direction here. 
Disney still underperformed, Bob

262
00:13:21,400 --> 00:13:24,400
Iger is not doing a good job and
not nearly as good of a job as 

263
00:13:24,400 --> 00:13:27,700
he's getting praise for. 
Furthermore, he's also making 

264
00:13:27,700 --> 00:13:30,500
the of the argument here. 
That Bob Iger, never really 

265
00:13:30,500 --> 00:13:32,700
left. 
The guy was gone for ten months 

266
00:13:32,900 --> 00:13:37,300
Bob, capek for as unflattering 
and uncharming of an individual 

267
00:13:37,300 --> 00:13:40,200
as he was in the role. 
And he was not a good pick 

268
00:13:40,800 --> 00:13:44,000
still, he was kind of a 
scapegoat in my opinion for Bob 

269
00:13:44,000 --> 00:13:47,300
Iger and a lot of Is he took a 
lot of blame of things that Bob 

270
00:13:47,300 --> 00:13:49,700
Iger did an act. 
He says here that there are 

271
00:13:49,700 --> 00:13:52,800
still several current directors 
and members of management who 

272
00:13:52,800 --> 00:13:56,200
oversaw an approved, some of the
Disney's some of Disney's worst 

273
00:13:56,200 --> 00:13:59,200
corporate governance and 
strategic failures, including 

274
00:13:59,300 --> 00:14:02,200
overpaying for the fox 
acquisition, the expanding 

275
00:14:02,200 --> 00:14:04,800
streaming losses, and the 
over-the-top compensation 

276
00:14:04,800 --> 00:14:08,900
packages, granted to Bob Iger. 
Bob Iger has been overpaid, that

277
00:14:08,900 --> 00:14:12,400
is abundantly clear. 
Look at the performance here, 

278
00:14:12,500 --> 00:14:14,600
hair is their tenure. 
So, they're there for a couple 

279
00:14:14,700 --> 00:14:18,100
All of years, we have Bob Iger 
at the top, there were 22 years,

280
00:14:18,500 --> 00:14:20,200
then the total shareholder 
return. 

281
00:14:20,500 --> 00:14:24,300
This is dividends and capital 
appreciation since their tenure 

282
00:14:25,300 --> 00:14:28,900
and then the total shareholder 
return then, the S&P 500's Total

283
00:14:28,900 --> 00:14:30,400
return over. 
That same time period. 

284
00:14:30,900 --> 00:14:33,700
In every single case. 
Every single one of these 

285
00:14:33,700 --> 00:14:37,100
directors has been over Disney 
during a time period where the 

286
00:14:37,100 --> 00:14:44,600
S&P 500 has beat Disney Bob, 
Iger by 63% Susan Arnold by 

287
00:14:44,700 --> 00:14:47,700
Said, 124 percent hundred twenty
eight percent right? 

288
00:14:47,700 --> 00:14:49,300
It's just all different 
percentages. 

289
00:14:49,300 --> 00:14:51,300
So basically Nelson's 
highlighting here that the 

290
00:14:51,308 --> 00:14:53,400
executive team is not getting 
the job done. 

291
00:14:53,400 --> 00:14:57,600
They're not beating the S&P 500.
Your opportunity cost is the 

292
00:14:57,600 --> 00:14:59,900
market. 
If a company is perpetually 

293
00:14:59,900 --> 00:15:02,800
underperforming, the market, 
there is no reason to own that 

294
00:15:02,800 --> 00:15:04,800
company. 
It's not rewarding investors. 

295
00:15:04,900 --> 00:15:08,500
We have Disney materially 
overpaying for the fox assets. 

296
00:15:08,500 --> 00:15:11,500
When I originally invested in 
Disney, I saw the operating 

297
00:15:11,500 --> 00:15:15,000
leverage of their their initial,
I I pee. 

298
00:15:15,100 --> 00:15:18,100
My initial video showed the 
trailer of the Mandalorian. 

299
00:15:18,100 --> 00:15:22,700
The first Mandalorian on Disney 
plus, that one show just that 

300
00:15:22,700 --> 00:15:25,400
show. 
I think got 10 20, 30 million 

301
00:15:25,400 --> 00:15:28,400
subscribers to Disney, plus, the
initial IP of just a 

302
00:15:28,400 --> 00:15:31,200
Mandalorian. 
They did not need to buy Fox for

303
00:15:31,200 --> 00:15:34,800
fifty two billion dollars to get
Disney plus as a successful 

304
00:15:34,800 --> 00:15:37,000
streaming service that's what 
they ended up doing. 

305
00:15:37,000 --> 00:15:40,500
Anyways they say the fox deal 
creates a massive incremental, 

306
00:15:40,500 --> 00:15:44,400
Goodwill balance of 50 billion. 
Disney had to rely on Ultra 

307
00:15:44,700 --> 00:15:48,100
Restive two billion dollar, 
energy assumptions are Synergy 

308
00:15:48,100 --> 00:15:50,900
assumptions, rather that's where
they'll be able to cross sell 

309
00:15:50,900 --> 00:15:53,600
and do all this crazy stuff to 
justify the purchase. 

310
00:15:54,000 --> 00:15:56,400
Most of the time with 
Acquisitions. 

311
00:15:56,800 --> 00:16:01,800
I do not like relying on Synergy
as part of the acquisition more 

312
00:16:01,800 --> 00:16:03,900
often than not, the synergies 
don't happen. 

313
00:16:04,700 --> 00:16:08,200
They say, which would imply a 
doubling of Fox's ibadah to 

314
00:16:08,200 --> 00:16:10,100
justify the deal. 
So they bought Fox on the 

315
00:16:10,100 --> 00:16:12,200
assumption. 
That Synergy would cause a 

316
00:16:12,200 --> 00:16:14,400
doubling and ibadah and just the
opposite. 

317
00:16:14,600 --> 00:16:16,700
Happened while difficult to 
quantify. 

318
00:16:16,700 --> 00:16:19,500
They say that we believe Fox's 
earnings power, have 

319
00:16:19,500 --> 00:16:22,800
deteriorated post-deal. 
Implying an even higher multiple

320
00:16:22,800 --> 00:16:25,200
Pig than the twenty six point 
five x. 

321
00:16:25,300 --> 00:16:27,400
And here's a chart showing their
expectation. 

322
00:16:27,700 --> 00:16:30,900
Disney's right here. 
They're they're Fox acquisition.

323
00:16:30,900 --> 00:16:34,200
They think it's going to be like
right here they think synergies 

324
00:16:34,200 --> 00:16:36,400
is going to make it even worth 
more rights energy. 

325
00:16:36,400 --> 00:16:38,400
They're going to work together 
and cross-sell and all these 

326
00:16:38,400 --> 00:16:41,600
things and it's going to be 
right here and then what 

327
00:16:41,600 --> 00:16:44,000
happened to it? 
This is what happened to the 

328
00:16:44,000 --> 00:16:47,200
ibadah 3. .1 didn't exactly work
out. 

329
00:16:47,200 --> 00:16:49,300
It was a poor acquisition that 
they overpaid. 

330
00:16:49,300 --> 00:16:50,900
They had no margin of safety 
with it. 

331
00:16:51,200 --> 00:16:53,900
You fox acquisition increase. 
Disney's leverage dramatically 

332
00:16:54,300 --> 00:16:56,100
investors are still paying for 
the fox deal. 

333
00:16:56,100 --> 00:16:58,000
As Disney Works to reduce its 
leverage. 

334
00:16:58,200 --> 00:17:00,900
Disney is also expecting the by 
Comcast nine billion dollar 

335
00:17:00,900 --> 00:17:04,300
stake in Hulu and 2024, which 
will keep its leverage. 

336
00:17:04,300 --> 00:17:08,200
Well, above historical levels 
for years so free thinking that 

337
00:17:08,200 --> 00:17:10,400
Disney's paying down the debt, 
and it's going to go down, 

338
00:17:10,900 --> 00:17:14,000
that's true, they're paying it 
down right now, 50 billion the 

339
00:17:14,000 --> 00:17:17,099
like, for 85 billion. 
It's going to go right back up 

340
00:17:17,200 --> 00:17:19,599
because they're buying Hulu. 
So don't get too excited. 

341
00:17:19,599 --> 00:17:23,200
They're adding on more debt and 
out of my entire portfolios, 

342
00:17:23,200 --> 00:17:25,800
both the story fund, and the 
passive income portfolio. 

343
00:17:26,200 --> 00:17:28,200
Disney is the most leverage 
company. 

344
00:17:28,200 --> 00:17:30,900
I hold by far. 
This is something that I don't. 

345
00:17:30,900 --> 00:17:33,900
Like, I've moved out of Leverage
companies, but here we have 

346
00:17:33,900 --> 00:17:36,800
Disney, highly levered because 
of all of these bolt on 

347
00:17:36,800 --> 00:17:38,800
Acquisitions. 
Now, another interesting thing 

348
00:17:38,800 --> 00:17:41,400
they bring up is a deal that was
not done. 

349
00:17:41,700 --> 00:17:45,400
The sky acquisition that Disney 
wanted to You and Nelson 

350
00:17:45,400 --> 00:17:48,800
basically gives this as an 
example of Disney, having not 

351
00:17:48,800 --> 00:17:51,400
learned their lesson. 
They're still trying to buy 

352
00:17:51,400 --> 00:17:54,700
overpriced Assets in the market.
They're still trying to buy more

353
00:17:54,700 --> 00:17:57,800
content. 
The bid that they put in for Sky

354
00:17:58,000 --> 00:18:01,400
represented, a 46 percent 
premium to Disney's original 

355
00:18:01,400 --> 00:18:06,000
offer and a 104 percent premium 
to the unaffected Sky share 

356
00:18:06,000 --> 00:18:08,800
price. 
Another example of poor merger 

357
00:18:08,800 --> 00:18:11,600
and acquisition judgment. 
So, luckily for Disney 

358
00:18:11,600 --> 00:18:15,000
shareholders, this offer wasn't 
accepted Comcast Stitt. 

359
00:18:15,100 --> 00:18:17,800
They had a different reason to 
do that, but the point stands, 

360
00:18:17,900 --> 00:18:19,600
Disney still trying to 
exercised. 

361
00:18:19,600 --> 00:18:21,800
Poor judgment in their merger 
and Acquisitions. 

362
00:18:22,200 --> 00:18:25,000
Luckily, they couldn't buy this 
deal even though they are trying

363
00:18:25,000 --> 00:18:28,200
to overpay once again. 
Here's a Bernstein note on the 

364
00:18:28,200 --> 00:18:31,200
steel that Disney was eager to 
do bidding aggressively for 

365
00:18:31,200 --> 00:18:35,500
quote, we never understood why 
this lower growth lower return 

366
00:18:35,500 --> 00:18:38,100
and lower multiple business. 
With undeniable long-term. 

367
00:18:38,100 --> 00:18:41,700
Structural risks would enhance 
Disney's asset mix or contribute

368
00:18:41,700 --> 00:18:43,400
to Disney's deck 
direct-to-consumer 

369
00:18:43,600 --> 00:18:46,600
transformation. 
By allowing Comcast to Prevail 

370
00:18:46,600 --> 00:18:50,400
in the sky bidding war Disney. 
Avoided paying a massive premium

371
00:18:50,400 --> 00:18:54,000
for business, which is primarily
a European DBS. 

372
00:18:54,000 --> 00:18:57,200
Distributor, this wouldn't have 
benefited Disney at all. 

373
00:18:57,200 --> 00:19:00,000
There is in my opinion, no 
reason they should have been 

374
00:19:00,200 --> 00:19:03,200
bidding aggressively for this 
and other investors realize that

375
00:19:03,200 --> 00:19:06,800
as well but they were and the 
outcome of this would have been 

376
00:19:06,800 --> 00:19:09,200
disastrous. 
Again putting more stress on 

377
00:19:09,200 --> 00:19:12,000
Disney's balance sheet that is 
already very levered. 

378
00:19:12,200 --> 00:19:14,600
Had Disney purchase sky on top 
of the fox deal. 

379
00:19:14,700 --> 00:19:17,700
All Disney would have paid 100 
billion dollars at a combined 

380
00:19:17,700 --> 00:19:20,900
tracks, transaction, multiple of
20 times. 

381
00:19:20,900 --> 00:19:24,400
Enterprise Value to ibadah. 
That is incredibly expensive for

382
00:19:24,400 --> 00:19:27,500
this type of for this type of 
company pro forma. 

383
00:19:27,500 --> 00:19:31,600
It would have added sixty seven 
billion of net debt to its 

384
00:19:31,600 --> 00:19:34,000
balance sheet. 
This would have put Disney's 

385
00:19:34,000 --> 00:19:38,100
debt over 100 billion dollars. 
I mean, this is incredible that 

386
00:19:38,100 --> 00:19:41,300
they're trying to do these deals
to just torpedo the company. 

387
00:19:41,400 --> 00:19:44,600
So so far, do you agree with the
arguments Nelson? 

388
00:19:44,700 --> 00:19:47,000
Taking care of poor corporate 
judgment. 

389
00:19:47,300 --> 00:19:49,100
I do I think that he spot on 
with it. 

390
00:19:49,700 --> 00:19:52,000
Furthermore, he highlights the 
cash flows of the company. 

391
00:19:52,000 --> 00:19:53,800
We can look at the earnings per 
share here. 

392
00:19:54,100 --> 00:19:57,900
Now, keep in mind, the gray bar 
is here, all of this is 

393
00:19:57,900 --> 00:20:00,400
fictitious. 
This is in people's minds and 

394
00:20:00,400 --> 00:20:02,000
their judgments about the 
future. 

395
00:20:02,200 --> 00:20:04,800
What's actually happened? 
It went from seven dollars to 

396
00:20:04,800 --> 00:20:07,600
three dollars and fifty cents. 
That's the earnings per share. 

397
00:20:07,800 --> 00:20:10,700
So earnings per share have been 
decimated and then there's nice 

398
00:20:10,700 --> 00:20:14,500
pictures that you can draw on 
paper about the earnings sky. 

399
00:20:14,700 --> 00:20:19,000
Rocketing back up in 2025 but 
even so I just want to point out

400
00:20:19,000 --> 00:20:22,900
in 2025 even if they hit all of 
their projections which they've 

401
00:20:22,900 --> 00:20:25,400
historically shown that, they're
not good at projecting, they're 

402
00:20:25,400 --> 00:20:27,700
not good at hitting their 
targets and they keep revising 

403
00:20:27,700 --> 00:20:31,500
their own projections downward. 
But even on under the assumption

404
00:20:31,500 --> 00:20:34,800
that they somehow miraculously, 
hit all of their projections, 

405
00:20:35,100 --> 00:20:37,400
they're still below where they 
were in 2018. 

406
00:20:37,700 --> 00:20:40,300
So essentially investors are 
going to be holding this company

407
00:20:40,800 --> 00:20:44,500
for for another three years, to 
get back to the earnings. 

408
00:20:44,700 --> 00:20:47,900
Level. 
It was four years ago that's the

409
00:20:47,900 --> 00:20:52,400
big pitch to investors in Disney
the cash flows paint an even 

410
00:20:52,400 --> 00:20:54,600
worse picture. 
Nine point, eight billion 

411
00:20:54,600 --> 00:20:58,500
dollars in free cash flow and 
2018 right now we're at one, 

412
00:20:58,500 --> 00:21:01,600
point 1 billion. 
Now, something that they don't 

413
00:21:01,600 --> 00:21:03,700
mention on this chart and I can 
look it up right here. 

414
00:21:04,000 --> 00:21:06,200
If we bring up Disney on qual 
trim, this is available to 

415
00:21:06,200 --> 00:21:08,600
Patron members. 
It's also important, I think to 

416
00:21:08,600 --> 00:21:10,900
factor in stock based 
compensation, because even 

417
00:21:10,900 --> 00:21:13,800
though they did one point zero 
seven billion and free cash 

418
00:21:13,800 --> 00:21:16,100
flow. 
They also paid their employees 

419
00:21:16,400 --> 00:21:20,200
with 980 million dollars in 
stock, based compensation. 

420
00:21:20,500 --> 00:21:23,300
So the adjusted free cash flow 
which were eventually going to 

421
00:21:23,300 --> 00:21:26,500
have a chart for that on call 
trim where we net these two out.

422
00:21:27,000 --> 00:21:30,200
It would be about 70 80 million 
dollars. 

423
00:21:30,500 --> 00:21:32,600
That's what they made in real 
free, cash flows that can be 

424
00:21:32,600 --> 00:21:35,600
returned to investors 80 million
dollars. 

425
00:21:35,800 --> 00:21:38,600
So even though this is one 
point, 1 billion, dollars of 

426
00:21:38,608 --> 00:21:40,900
free cash flow that is 
overstating. 

427
00:21:40,900 --> 00:21:43,500
The amount of money this leaves 
to investors, they're 

428
00:21:43,500 --> 00:21:46,900
essentially not generating. 
Any money for investors in 2022.

429
00:21:47,000 --> 00:21:49,400
Then we get to the dividend. 
Disney is one of the most 

430
00:21:49,400 --> 00:21:52,400
commonly owned retail companies,
when I talk to different 

431
00:21:52,400 --> 00:21:54,900
investors, and I have a lot of 
chats are different retail 

432
00:21:54,900 --> 00:21:57,300
investors Disney's, what are the
go-to Investments? 

433
00:21:57,300 --> 00:21:59,500
Because it's such a 
public-facing investment. 

434
00:21:59,500 --> 00:22:03,900
It's such a long-standing good 
company with good IP and it paid

435
00:22:03,900 --> 00:22:06,400
a dividend that's something that
retail investors look forward 

436
00:22:06,400 --> 00:22:07,600
to. 
In fact, a lot of them in 

437
00:22:07,600 --> 00:22:09,100
retirement. 
Really look forward to that 

438
00:22:09,100 --> 00:22:13,200
dividend in 2020, Disney 
eliminated, its dividend as it 

439
00:22:13,200 --> 00:22:15,700
face cash flow challenges. 
Has caused by the covid-19, 

440
00:22:15,700 --> 00:22:19,200
pandemic, significant streaming 
Investments and it's over 

441
00:22:19,200 --> 00:22:21,700
levered, balance sheet, prior to
2020. 

442
00:22:21,700 --> 00:22:26,100
Disney had paid a dividend for 
57 straight years with an 

443
00:22:26,100 --> 00:22:27,900
emphasis placed on growing the 
dividend. 

444
00:22:27,900 --> 00:22:30,200
So it was a dividend Growth 
Company. 

445
00:22:30,300 --> 00:22:33,900
Disney has not provided a 
timetable for restoring, the 

446
00:22:33,900 --> 00:22:36,800
dividend Beyond achieving 
prefix, leverage levels. 

447
00:22:36,800 --> 00:22:39,900
So they're saying that we need 
to get our leverage down and 

448
00:22:39,900 --> 00:22:41,000
then we'll bring back the 
dividend. 

449
00:22:41,000 --> 00:22:42,900
And, oh, by the way, we're 
trying to buy all these 

450
00:22:42,900 --> 00:22:44,500
different companies to make our 
leverage go. 

451
00:22:45,100 --> 00:22:48,500
So give me a break Disney saying
yeah well bring the dividend 

452
00:22:48,500 --> 00:22:51,100
back when leverage goes down, 
but we're actively working to 

453
00:22:51,100 --> 00:22:53,300
make the leverage. 
Go back up, through all of our, 

454
00:22:53,600 --> 00:22:57,100
our bids on all these mergers 
and Acquisitions total, 

455
00:22:58,100 --> 00:23:00,300
double-talk doublespeak to 
investors. 

456
00:23:00,600 --> 00:23:03,400
They're saying one thing to you 
and then they're doing another. 

457
00:23:03,500 --> 00:23:06,700
And another thing that I really 
hate about this dividend and the

458
00:23:06,708 --> 00:23:09,600
fact that Disney scrapped. 
It is not the fact that they 

459
00:23:09,600 --> 00:23:11,700
scrapped the dividend. 
I don't think that was much of a

460
00:23:11,700 --> 00:23:14,900
problem because covid did shut 
down all of their parks and I 

461
00:23:14,908 --> 00:23:18,200
thought at the time it makes 
sense, that Disney should halt 

462
00:23:18,200 --> 00:23:19,700
the dividend. 
That's what a responsible 

463
00:23:19,700 --> 00:23:21,800
company should do. 
One of the companies in my 

464
00:23:21,800 --> 00:23:25,200
portfolio, I can show you. 
Right here, is Texas, Roadhouse.

465
00:23:25,900 --> 00:23:30,900
This company, it's a restaurant.
So, when covid happen, they 

466
00:23:30,900 --> 00:23:32,500
couldn't even open up their 
restaurant. 

467
00:23:32,500 --> 00:23:35,500
All they could do is to go 
orders and what they did was, 

468
00:23:35,500 --> 00:23:37,400
they scrapped the dividend. 
This is the balance sheet. 

469
00:23:37,400 --> 00:23:39,700
Here's the divin hair, they 
scrapped the dividend. 

470
00:23:39,700 --> 00:23:44,200
So we have a dividend payment 
going from 2020 1/4 but what a 

471
00:23:44,200 --> 00:23:45,100
Texas rodeo. 
House. 

472
00:23:45,100 --> 00:23:47,400
Do once their company open back 
up. 

473
00:23:47,500 --> 00:23:50,200
Once covid-19, once they could 
see people again in their 

474
00:23:50,200 --> 00:23:53,200
restaurant, they instantly 
brought back the dividend and 

475
00:23:53,200 --> 00:23:55,500
they did a 20 percent dividend 
raise. 

476
00:23:55,500 --> 00:23:59,300
So they said, thank you 
shareholders for holding with us

477
00:23:59,300 --> 00:24:01,100
through this troubling difficult
time. 

478
00:24:01,200 --> 00:24:04,300
By the way, you're getting a big
dividend raised, and we're 

479
00:24:04,300 --> 00:24:05,800
returning a lot of capital to 
you. 

480
00:24:05,800 --> 00:24:08,300
Everything's back on track. 
That is good. 

481
00:24:08,300 --> 00:24:11,300
Corporate governance. 
That is relaying the message 

482
00:24:11,308 --> 00:24:14,400
correctly. 
What Disney's done is use covid 

483
00:24:14,400 --> 00:24:17,600
as an Cuse to scrap the dividend
when the real reason. 

484
00:24:17,600 --> 00:24:19,800
They can't bring it back as 
because of their failed, merger 

485
00:24:19,800 --> 00:24:21,900
and acquisition with the fox 
asset. 

486
00:24:22,100 --> 00:24:25,300
So I think it's very 
disingenuous what the management

487
00:24:25,300 --> 00:24:28,000
team is saying. 
They're not really highlighting,

488
00:24:28,000 --> 00:24:30,400
the real reason why they can't 
bring back the dividend. 

489
00:24:30,400 --> 00:24:32,200
And then, here's another thing 
that I think is very 

490
00:24:32,200 --> 00:24:35,800
frustrating, which I don't like 
to see from this company. 

491
00:24:35,800 --> 00:24:37,800
And when I was reading through 
the letter, I think this is 

492
00:24:37,800 --> 00:24:41,800
possibly the most disappointing 
part of this entire slide hair, 

493
00:24:41,900 --> 00:24:45,100
Disney's shareholder engagement 
process or lack thereof is Kate 

494
00:24:45,100 --> 00:24:49,300
of of poor governance. 
They're not wanting any input 

495
00:24:49,300 --> 00:24:53,200
from actual investors long-term 
investors in their company like 

496
00:24:53,200 --> 00:24:55,200
Nelson. 
Peltz people that put a lot of 

497
00:24:55,200 --> 00:24:57,100
money behind the company because
they love Disney. 

498
00:24:57,100 --> 00:25:00,400
They want it to succeed in my 
opinion, they're giving very 

499
00:25:00,800 --> 00:25:03,900
very accurate. 
Even if it's biting its accurate

500
00:25:03,900 --> 00:25:06,200
feedback, they don't want 
anything to do with him. 

501
00:25:06,700 --> 00:25:10,100
Why did Bob Iger and the board 
invite Nelson to meet in person 

502
00:25:10,100 --> 00:25:13,100
three years ago to hear his 
views on Disney and barely gave 

503
00:25:13,100 --> 00:25:16,500
him any of the same? 
Opportunity, three years later. 

504
00:25:16,900 --> 00:25:20,600
So when times were okay, they 
will talk to the shareholders. 

505
00:25:21,000 --> 00:25:23,700
Now they want nothing to do with
Nelson Peltz now that he's 

506
00:25:23,700 --> 00:25:26,000
highlighting some problems and 
things that the management has 

507
00:25:26,000 --> 00:25:28,400
done poorly there. 
In defense mode, they're going 

508
00:25:28,400 --> 00:25:31,700
to try to paint Nelson Peltz, 
has the bad guy a vulture that's

509
00:25:31,700 --> 00:25:33,200
going to come in and stir things
up. 

510
00:25:33,800 --> 00:25:37,100
He says, in our view, Disney's 
shareholders engagement process 

511
00:25:37,100 --> 00:25:40,900
has been amongst the worst. 
If not the worst of all the 

512
00:25:40,900 --> 00:25:44,700
companies we have ever 
interacted with Disney's, The 

513
00:25:44,900 --> 00:25:47,000
Three luck tonight to interact 
with shareholders. 

514
00:25:47,400 --> 00:25:50,700
It's important for shareholders 
to know that tree on has a 

515
00:25:50,700 --> 00:25:55,400
constructive history with Disney
and Bob Iger in September. 2019 

516
00:25:55,500 --> 00:25:58,300
Nelson Peltz spoke with the 
board at the invitation of Bob 

517
00:25:58,300 --> 00:25:59,700
Iger about his views on the 
company. 

518
00:26:00,000 --> 00:26:03,500
November, 20, 22, Tree on 
started a discussion with Bob 

519
00:26:03,500 --> 00:26:06,300
capek about the challenges and 
opportunities facing the company

520
00:26:06,500 --> 00:26:09,900
and requested a board seat for 
Nelson shortly after the 

521
00:26:09,900 --> 00:26:14,400
conversation, the board, 
abruptly fired capek and since 

522
00:26:14,400 --> 00:26:16,000
mr. 
Tiger was rehired. 

523
00:26:16,000 --> 00:26:18,200
The company has barely 
interacted with Nelson. 

524
00:26:18,300 --> 00:26:21,300
After one short call with 
management Disney rejected, 

525
00:26:21,300 --> 00:26:24,200
Nelson's request for a board 
seat out, right? 

526
00:26:24,200 --> 00:26:28,500
The goal of this company, he 
calls wanting to just have one 

527
00:26:28,500 --> 00:26:31,700
board seat, which isn't a huge 
ask, a lot of activist 

528
00:26:31,700 --> 00:26:33,200
investors, they want multiple 
boards. 

529
00:26:33,200 --> 00:26:35,900
These they want to do hostile 
takeovers, he wants someone, 

530
00:26:36,300 --> 00:26:38,800
that's not hostile. 
Having one board seat is not 

531
00:26:38,800 --> 00:26:42,200
hostile, and they reject his 
request without even considering

532
00:26:42,200 --> 00:26:46,200
it notably, Disney did not even 
allowed Nelson to meet any 

533
00:26:46,200 --> 00:26:49,800
directors prior to turning down 
his request until we flagged 

534
00:26:49,800 --> 00:26:53,900
that it was Highly Questionable 
of a decision to jump to a 

535
00:26:53,908 --> 00:26:57,400
decision without hearing us out.
I just look at this and I think 

536
00:26:57,400 --> 00:26:59,700
it's such a poor way to conduct 
themselves. 

537
00:26:59,900 --> 00:27:02,100
It reminds me this type of 
thing. 

538
00:27:02,100 --> 00:27:04,800
Reminds me the same way that 
Disney reacted to Scarlett 

539
00:27:04,800 --> 00:27:07,800
Johansson when she sued wanting 
to get the money. 

540
00:27:07,800 --> 00:27:11,900
She was due for her role. 
Disney came out and publicly 

541
00:27:11,900 --> 00:27:16,500
blamed her saying that she was 
You know, questioning her 

542
00:27:16,500 --> 00:27:18,900
motives and made it a big public
Fiasco. 

543
00:27:19,300 --> 00:27:22,300
It was embarrassing and showed 
poor judgment from the company. 

544
00:27:22,700 --> 00:27:24,400
And here, they have an activist 
investor. 

545
00:27:24,500 --> 00:27:27,100
Wanting one board seat, they 
turned him down without even 

546
00:27:27,100 --> 00:27:29,800
having a meet the board or even 
hearing what he wants to say. 

547
00:27:30,700 --> 00:27:33,200
In every engagement were Tran 
has asked for board 

548
00:27:33,200 --> 00:27:35,900
representation. 
We were invited in person, 

549
00:27:35,900 --> 00:27:38,100
meetings, and extensive 
interviews with management and 

550
00:27:38,100 --> 00:27:40,000
the board, that is normally how 
it should go. 

551
00:27:40,300 --> 00:27:44,700
If an inner, if a investor comes
with legitimate concerns 

552
00:27:44,900 --> 00:27:48,100
Company, the board should 
entertain those concerns. 

553
00:27:48,100 --> 00:27:50,900
They should have the feedback. 
That's the sign of a good 

554
00:27:51,100 --> 00:27:52,900
company. 
One that wants feedback on how 

555
00:27:52,900 --> 00:27:55,300
to better run the business, but 
they're totally. 

556
00:27:55,300 --> 00:27:56,900
It's like they have an immune 
defense to it. 

557
00:27:56,900 --> 00:27:59,100
We don't want to hear anything 
from anyone else. 

558
00:27:59,200 --> 00:28:03,100
Disney has failed to execute a 
succession plan, one of the most

559
00:28:03,100 --> 00:28:05,500
important responsibilities of a 
public company. 

560
00:28:05,700 --> 00:28:09,500
So now we have the problem of a 
key figure Disney's relying on 

561
00:28:09,500 --> 00:28:13,200
Bob Iger now and November 20th. 
Disney announced that Bob Iger 

562
00:28:13,200 --> 00:28:16,600
was rehired as CEO. 
Effective immediately less than 

563
00:28:16,600 --> 00:28:19,700
three years after he stepped 
down but Remain the executive 

564
00:28:19,700 --> 00:28:21,800
chairman. 
Now what Nelson's going to do 

565
00:28:21,800 --> 00:28:24,000
here is make the argument that 
he really never left and that 

566
00:28:24,000 --> 00:28:27,800
was the problem to begin with 
the fact that Bob capek was 

567
00:28:27,800 --> 00:28:31,600
abruptly fired, five months 
after the board unanimously 

568
00:28:31,700 --> 00:28:35,200
agreed to extend his contract. 
By three years suggests that the

569
00:28:35,200 --> 00:28:39,100
board lacks a robust CEO, 
succession process and 

570
00:28:39,100 --> 00:28:41,900
completely misread the state of 
Disney and Bob, capex 

571
00:28:41,900 --> 00:28:44,400
performance. 
This again shows that they're 

572
00:28:44,400 --> 00:28:46,700
not good. 
Forecasting the future at all, 

573
00:28:46,900 --> 00:28:48,500
they're not having good 
judgment. 

574
00:28:48,900 --> 00:28:52,600
They all unanimously agreed to 
extend, Bob capex contract for 

575
00:28:52,600 --> 00:28:55,400
three years and then they fired 
him almost immediately. 

576
00:28:55,400 --> 00:28:58,900
After that, why was Bob capek 
ever made Co to begin with? 

577
00:28:59,100 --> 00:29:01,300
Remember that Bob? 
Capek was the operator of the 

578
00:29:01,300 --> 00:29:03,500
parks. 
That's what's that was his role.

579
00:29:03,600 --> 00:29:06,300
He never worked on the media 
side and the production side and

580
00:29:06,300 --> 00:29:09,100
Disney was realigning. 
Its entire focus into the 

581
00:29:09,100 --> 00:29:10,900
production aside the streaming 
business. 

582
00:29:11,800 --> 00:29:14,600
So they took someone that was a 
Parks, operator and made. 

583
00:29:14,800 --> 00:29:17,500
I'm in control of something that
he had no experience with good 

584
00:29:17,500 --> 00:29:19,800
job Disney management. 
Now, we have another quote here 

585
00:29:19,800 --> 00:29:21,800
that I think is just 
embarrassing for Disney. 

586
00:29:21,800 --> 00:29:25,500
This one comes from Susan 
Arnold, the chair of the board. 

587
00:29:25,600 --> 00:29:30,300
She's one of the longest time 
board members, June 28th 2022. 

588
00:29:30,700 --> 00:29:34,800
This was recent quote. 
Disney was dealt a tough Hand by

589
00:29:34,800 --> 00:29:38,000
the pandemic. 
Yet with Bob, chase a peck at 

590
00:29:38,000 --> 00:29:40,700
the helm, our business from 
Parks to streaming. 

591
00:29:40,900 --> 00:29:43,300
Not only weather, the storm but 
emerged in a position of 

592
00:29:43,300 --> 00:29:47,100
strength in this Important time 
of growth and transformation. 

593
00:29:47,400 --> 00:29:50,200
The board is committed to 
keeping Disney on the successful

594
00:29:50,200 --> 00:29:52,500
path. 
That is on today, and Bob's 

595
00:29:52,500 --> 00:29:54,900
leadership, is key to achieving 
that goal. 

596
00:29:55,600 --> 00:29:58,300
Bob, capek, not the new Baba 
hiker. 

597
00:29:58,400 --> 00:30:02,400
Bob, capek is the Right leader 
at the right time for the Walt 

598
00:30:02,400 --> 00:30:06,500
Disney Company and the board has
full confidence in him and his 

599
00:30:06,500 --> 00:30:09,900
leadership team. 
Just singing the Praises of Bob 

600
00:30:09,900 --> 00:30:13,800
capek right before they fire 
him, and then blame him giving 

601
00:30:13,800 --> 00:30:18,400
him as a scapegoat Note, this is
not good management praising, 

602
00:30:18,400 --> 00:30:21,600
Someone putting him in a 
position, watching over him, 

603
00:30:21,800 --> 00:30:24,000
putting him in a position where 
he's basically destined to fail 

604
00:30:24,000 --> 00:30:27,000
and then firing him and then 
pointing the finger at him, is 

605
00:30:27,000 --> 00:30:29,300
not good leadership. 
Furthermore, the company's 

606
00:30:29,300 --> 00:30:33,100
profits going down by 50% and 
then boasting about how well 

607
00:30:33,100 --> 00:30:35,800
Disney's doing does not build a 
lot of confidence for the 

608
00:30:35,800 --> 00:30:37,700
shareholder. 
If you're a shareholder right 

609
00:30:37,700 --> 00:30:40,200
now, you know things are not 
going well with Disney. 

610
00:30:40,500 --> 00:30:42,300
And if your shareholder and you 
realize that the board of 

611
00:30:42,300 --> 00:30:45,600
directors thinks things are 
going well with Well, that's a 

612
00:30:45,608 --> 00:30:47,600
problem because we're on 
different pages. 

613
00:30:47,700 --> 00:30:51,100
I view Disney is not doing well.
Susan here is viewing, Disney as

614
00:30:51,100 --> 00:30:54,200
doing just amazing. 
It's doing great, agree to 

615
00:30:54,200 --> 00:30:56,400
disagree there. 
Now, what they point out here? 

616
00:30:56,400 --> 00:31:01,700
I think the major point is when 
Bob Iger left the Disney board, 

617
00:31:02,000 --> 00:31:03,900
they appointed him as the 
executive chairman for the 

618
00:31:03,900 --> 00:31:07,200
following two years, which in 
and of itself is kind of risky. 

619
00:31:07,200 --> 00:31:08,900
They pointed out as being very 
risky. 

620
00:31:09,500 --> 00:31:12,000
I've seen it work sometimes. 
Jeff Bezos is the executive 

621
00:31:12,000 --> 00:31:15,600
chairman of Amazon, but in this 
case, it was Was it was bad. 

622
00:31:15,600 --> 00:31:20,400
This was a bad decision because 
it set up his successor to fill 

623
00:31:20,800 --> 00:31:24,000
with the prior Co constantly 
watching over his shoulders. 

624
00:31:24,400 --> 00:31:26,900
That is exactly what transpired 
we've seen. 

625
00:31:26,900 --> 00:31:31,800
All of these different different
articles showing how Bob capek 

626
00:31:31,800 --> 00:31:33,700
and Bob Iger grew to hate each 
other. 

627
00:31:33,900 --> 00:31:36,600
How did this Feud start? 
Well, right after Bob Iger step 

628
00:31:36,600 --> 00:31:40,000
down, we had covid and they had 
a disagreement on how to run 

629
00:31:40,000 --> 00:31:42,600
things during covid. 
And what happened was Bob, Iger 

630
00:31:42,600 --> 00:31:45,000
went on interviews and said, 
Yeah. 

631
00:31:45,000 --> 00:31:47,500
You know, with all of this 
covid, I really had to step in 

632
00:31:47,500 --> 00:31:49,100
and make sure things run 
smoothly. 

633
00:31:49,400 --> 00:31:52,300
I'm still kind of involved in 
making sure Disney's doing a 

634
00:31:52,308 --> 00:31:55,800
good job and Bob capek is over 
there saying you just put me in 

635
00:31:55,800 --> 00:31:58,200
as a CEO and you're already 
discrediting. 

636
00:31:58,200 --> 00:32:01,000
My work you're saying that I 
can't handle running this 

637
00:32:01,000 --> 00:32:04,200
company through the pandemic. 
So right there they butted 

638
00:32:04,200 --> 00:32:06,100
heads. 
And ever since that point in 

639
00:32:06,100 --> 00:32:09,200
time, when Bob Iger was still 
involved in the company, 

640
00:32:09,200 --> 00:32:12,800
bragging about running it and 
saving it through covid that 

641
00:32:12,800 --> 00:32:15,600
cause bad blood. 
And so you have Two people in 

642
00:32:15,600 --> 00:32:19,700
charge of the company. 
One is the executive CEO, one of

643
00:32:19,700 --> 00:32:23,300
the executive, chairman, and you
have both of them having major. 

644
00:32:23,300 --> 00:32:27,300
Disagreements, not like Jeff 
Bezos, who he's executive, 

645
00:32:27,300 --> 00:32:30,200
chairman, but Jeff Bezos. 
He went off on his private 

646
00:32:30,200 --> 00:32:32,700
yacht. 
He has a city-sized cruise ship 

647
00:32:32,700 --> 00:32:36,200
personal boat that he's on, you 
know, he's doing things outside 

648
00:32:36,200 --> 00:32:37,800
of the company. 
He's not really focused on it 

649
00:32:37,800 --> 00:32:39,600
anymore. 
He might receive a call once, or

650
00:32:39,600 --> 00:32:42,500
twice a week from Andy jassy on 
what to do in certain 

651
00:32:42,500 --> 00:32:46,700
situations, but Jeff Bezos has 
Were undermined what Andy jassy 

652
00:32:46,700 --> 00:32:51,100
has done Jeff Bezos has never 
question Andy jassi's executive 

653
00:32:51,100 --> 00:32:54,800
role and what he's doing there. 
So I really think this does set 

654
00:32:54,800 --> 00:32:58,700
up an argument that the entire 
executive team at Disney. 

655
00:32:58,700 --> 00:33:01,700
The entire board of directors, 
really set up Bob capek to fail.

656
00:33:01,900 --> 00:33:03,900
They put him in a position. 
He should have never been put 

657
00:33:03,900 --> 00:33:06,100
in. 
They let him take the fall, they

658
00:33:06,100 --> 00:33:09,500
fired him at the absolute bottom
of the stock price, and they 

659
00:33:09,500 --> 00:33:11,600
have Bob Iger coming back to 
save the day. 

660
00:33:12,000 --> 00:33:16,000
When Bob Iger never really left.
He was Is interfering with Bob 

661
00:33:16,000 --> 00:33:19,800
capex, tenure every single part 
of it every single day, he is 

662
00:33:19,800 --> 00:33:21,300
involved in the day-to-day 
dealings. 

663
00:33:21,300 --> 00:33:23,200
He had luncheons with other 
Executives. 

664
00:33:23,400 --> 00:33:26,300
He explained publicly, and 
privately, all the things. 

665
00:33:26,300 --> 00:33:28,600
He thought that Bob capek was 
doing wrong. 

666
00:33:28,800 --> 00:33:32,200
He basically stood stood on the 
sidelines and just sat there and

667
00:33:32,200 --> 00:33:35,800
complained at Bob capek and 
undermined his ability to lead. 

668
00:33:36,000 --> 00:33:38,700
So that was not a good 
succession plan at all, and I 

669
00:33:38,708 --> 00:33:42,600
don't think that Bob Iger should
be Flawless and blameless in 

670
00:33:42,600 --> 00:33:45,100
what went on there. 
And on this note, it's Creating 

671
00:33:45,100 --> 00:33:49,000
that while this is happening, 
all this mismanagement bloated 

672
00:33:49,000 --> 00:33:53,200
cost structure and failed to ma,
we have the company's CEO. 

673
00:33:53,200 --> 00:33:57,600
Bob Iger receiving 216 million 
dollars in total compensation, 

674
00:33:58,000 --> 00:34:00,600
despite Disney's poor total 
stock performance. 

675
00:34:00,900 --> 00:34:05,100
And here it shows, I think the 
egregious amount that Bob Iger 

676
00:34:05,100 --> 00:34:08,900
has been paid compared to the 
performance of the stock 36 

677
00:34:08,900 --> 00:34:11,600
million dollars, 65 million 
dollars, forty seven million 

678
00:34:11,600 --> 00:34:14,500
dollars a year, 21 million 
dollars a year 45. 

679
00:34:14,699 --> 00:34:18,100
Million dollars a year, his 
total pay package of what he 

680
00:34:18,100 --> 00:34:21,800
wanted. 
Was 423 million dollars for a 

681
00:34:21,800 --> 00:34:25,400
company that has underperformed.
Both its peers and the S&P 500. 

682
00:34:25,400 --> 00:34:28,199
Now we're getting through this 
but this still doesn't end, 

683
00:34:28,199 --> 00:34:30,400
there's poor problems to 
highlight. 

684
00:34:30,400 --> 00:34:33,000
And again, I don't think I don't
think he's cherry-picking or 

685
00:34:33,000 --> 00:34:35,600
trying to find problems. 
He's just highlighting what's 

686
00:34:35,600 --> 00:34:39,400
going on with the business here.
And like I said before, I fully 

687
00:34:39,400 --> 00:34:42,800
agree with Nelson Peltz. 
I am personally thankful that 

688
00:34:42,800 --> 00:34:45,500
someone like him is going in and
finding During this battle 

689
00:34:45,900 --> 00:34:48,100
activist investors. 
Don't you to do this, you could 

690
00:34:48,100 --> 00:34:51,500
just save the trouble, not have 
the fight, go on to a passive 

691
00:34:51,500 --> 00:34:54,500
investment but instead he's 
trying to work on behalf of 

692
00:34:54,500 --> 00:34:56,600
shareholders that can't do it 
for themselves. 

693
00:34:56,800 --> 00:35:00,200
I do not have the capital to be 
able to sway Disney so someone 

694
00:35:00,200 --> 00:35:03,600
like him that does and does it 
in a good positive way on behalf

695
00:35:03,600 --> 00:35:07,000
of the shareholders? 
I think is very something that's

696
00:35:07,000 --> 00:35:09,700
good. 
It's good on behalf of even ETF 

697
00:35:09,700 --> 00:35:11,600
holders. 
If you old, if you hold an index

698
00:35:11,600 --> 00:35:13,200
fund, this is a good thing for 
you. 

699
00:35:13,200 --> 00:35:14,500
Improving the performance of 
this car. 

700
00:35:14,700 --> 00:35:17,300
Company will improve the 
performance of your index fund. 

701
00:35:17,500 --> 00:35:21,000
So even if you're not directly 
invested in Disney, it's still 

702
00:35:21,000 --> 00:35:23,700
good that people like this exist
that are doing this work on your

703
00:35:23,700 --> 00:35:27,800
behalf because otherwise, you 
have a system where Executives 

704
00:35:27,800 --> 00:35:30,800
and the board of directors are 
lining their pockets with 

705
00:35:31,200 --> 00:35:34,000
boatloads of cash, while the 
company is bloated and 

706
00:35:34,000 --> 00:35:37,100
underperforming, not a good 
situation for the equity 

707
00:35:37,100 --> 00:35:40,300
markets. 
Now, this next part, this goes 

708
00:35:40,300 --> 00:35:43,900
in to Disney streaming strategy 
and it highlights a lot of the 

709
00:35:43,900 --> 00:35:47,000
differences between Disney and 
Netflix, I think this is both 

710
00:35:47,200 --> 00:35:49,700
informative important to pay 
attention to. 

711
00:35:50,000 --> 00:35:52,200
If you're looking at anything in
the streaming industry because 

712
00:35:52,200 --> 00:35:55,700
it again, highlights some very 
key key, pieces of information, 

713
00:35:55,700 --> 00:35:58,300
hair. 
Disney streaming strategy, 

714
00:35:58,600 --> 00:36:02,600
ready? 
Fire the name, we are concerned 

715
00:36:02,600 --> 00:36:05,200
with how Disney streaming 
strategy has evolved under the 

716
00:36:05,200 --> 00:36:09,200
board's oversight while we 
believe Disney plus started as a

717
00:36:09,200 --> 00:36:12,500
niche direct-to-consumer 
extension of Disney's franchise 

718
00:36:12,500 --> 00:36:16,100
flywheel, it has rapidly. 
I shifted to the core 

719
00:36:16,100 --> 00:36:18,500
distribution channel for the 
majority of Disney's 

720
00:36:18,800 --> 00:36:22,800
intellectual property leading 
Disney to significantly ramp up 

721
00:36:22,800 --> 00:36:26,100
investment to drive new 
subscriber, growth at all costs.

722
00:36:26,900 --> 00:36:30,100
So basically, Disney plus went 
from this, this little Outlet to

723
00:36:30,107 --> 00:36:33,500
get some premium content. 
It was highly cost effective, 

724
00:36:33,600 --> 00:36:36,200
leverage, their brand IP, and 
now, Disney's trying their 

725
00:36:36,200 --> 00:36:40,100
hardest to turn it into a 
Netflix, like all content, good,

726
00:36:40,100 --> 00:36:42,900
and bad. 
All qualities of content just 

727
00:36:42,900 --> 00:36:46,300
massive amounts of content. 
They're trying to play Netflix's

728
00:36:46,300 --> 00:36:49,400
game and Netflix is much better 
at playing their game than 

729
00:36:49,400 --> 00:36:52,600
Disney is and Disney should stay
in their Lane and play the game 

730
00:36:52,600 --> 00:36:55,700
that they're good at their 
subscribers have 3x, but their 

731
00:36:55,700 --> 00:36:59,500
content spend has 4X, and their 
profitability guidance has no 

732
00:36:59,500 --> 00:37:03,000
change at all. 
So, what is the rationale behind

733
00:37:03,000 --> 00:37:04,800
this? 
When it's not a creative to 

734
00:37:04,800 --> 00:37:10,200
profitability whatsoever, Disney
has lost eleven billion dollars 

735
00:37:10,200 --> 00:37:12,100
in streaming to date with more 
losses. 

736
00:37:12,100 --> 00:37:16,700
Coming since 2017 did She has 
lost a cumulative, 11 billion 

737
00:37:16,700 --> 00:37:19,900
dollars, in streaming business. 
The last number I heard was 

738
00:37:19,900 --> 00:37:22,800
eight billion, so every quarter,
they're just losing billions, 

739
00:37:22,800 --> 00:37:25,900
more management expects, the 
streaming business to break, 

740
00:37:25,900 --> 00:37:30,300
even in 2024, which means two 
more years of expected losses. 

741
00:37:30,300 --> 00:37:33,100
Now here's the problem. 
This looks very Netflix like 

742
00:37:33,100 --> 00:37:37,500
these numbers billions and 
billions of cash flow going into

743
00:37:37,500 --> 00:37:40,300
the direct to Consumer business,
which is all of Netflix. 

744
00:37:40,800 --> 00:37:42,800
But Netflix had a reason for 
doing this. 

745
00:37:43,200 --> 00:37:46,800
First of all, Netflix. 
Rated at time with very cheap 

746
00:37:46,800 --> 00:37:50,600
Capital, so they could get very 
cheap debt, super low interest 

747
00:37:50,600 --> 00:37:53,700
rates and they could spend their
money very effectively through 

748
00:37:53,700 --> 00:37:55,500
licensing, other people's 
content. 

749
00:37:55,800 --> 00:37:58,700
But Netflix also had a build 
their own intellectual property 

750
00:37:58,700 --> 00:38:01,100
Library. 
They couldn't leverage big 

751
00:38:01,100 --> 00:38:03,600
franchises. 
They cannot leverage Star Wars. 

752
00:38:04,100 --> 00:38:07,500
So Netflix had to outspend 
because of the lack of 

753
00:38:07,500 --> 00:38:10,100
intellectual property. 
They had to make up for it by 

754
00:38:10,100 --> 00:38:13,700
producing a ton of content and 
trying to create franchises from

755
00:38:13,700 --> 00:38:17,000
thin air like Stranger things. 
That is a much more difficult 

756
00:38:17,000 --> 00:38:19,300
task. 
Disney is advantaged. 

757
00:38:19,500 --> 00:38:22,400
They shouldn't have to spend the
same way Netflix does to get the

758
00:38:22,400 --> 00:38:26,100
same results and again I take 
you back to the Mandalorian when

759
00:38:26,100 --> 00:38:29,500
that first season. 
A Mandalorian was advertised 

760
00:38:29,800 --> 00:38:32,900
everybody in the United States 
wanted to watch it they only 

761
00:38:32,900 --> 00:38:36,200
need one show to sell a ten 
dollar a month subscription and 

762
00:38:36,200 --> 00:38:38,200
people paid for it for three 
months to watch. 

763
00:38:38,200 --> 00:38:42,800
One show, that is leverage with 
IP, Disney has abandoned that 

764
00:38:42,800 --> 00:38:46,500
strategy, they say, Disney does 
Leverage its substantial scale 

765
00:38:46,500 --> 00:38:49,400
and streaming. 
Disney is guiding to direct to 

766
00:38:49,400 --> 00:38:54,100
Consumer operating profit of 
break-even in 2024, by the way, 

767
00:38:54,700 --> 00:38:57,600
Netflix is already break. 
Even so Disneys, two years 

768
00:38:57,600 --> 00:39:01,500
behind Netflix in terms of 
Break, Even when the market 

769
00:39:01,500 --> 00:39:04,300
expects the business to generate
twenty nine billion of Revenue. 

770
00:39:05,100 --> 00:39:08,900
We are surprised that Disney's 
best-in-class, intellectual 

771
00:39:08,900 --> 00:39:14,500
property, franchises and scale 
have not led to in line if not 

772
00:39:14,600 --> 00:39:18,300
Spierer unit economics, compared
with Netflix, which generally 

773
00:39:18,300 --> 00:39:20,500
lacks the high quality 
franchise. 

774
00:39:20,500 --> 00:39:24,600
IP that is the argument against 
Netflix all the time, they have,

775
00:39:24,600 --> 00:39:27,900
no intellectual property. 
I think things are changing. 

776
00:39:27,900 --> 00:39:31,200
I think Netflix has proven that 
it can fabricate. 

777
00:39:31,200 --> 00:39:34,500
It can come up with intellectual
property out of thin air, and I 

778
00:39:34,500 --> 00:39:36,000
think there's plenty of examples
of that. 

779
00:39:36,400 --> 00:39:38,900
But regardless we go into this, 
this is I think one of the most 

780
00:39:38,900 --> 00:39:41,200
interesting slides here, 
Disney's direct to Consumer 

781
00:39:41,200 --> 00:39:44,100
segments and billions. 
Here's the margins of it. 

782
00:39:44,600 --> 00:39:50,100
You 1% - 21 percent margins - 14
percent margins - three percent 

783
00:39:50,100 --> 00:39:55,700
margins and then in 2025, barely
Break, Even 2.7 percent positive

784
00:39:55,700 --> 00:39:58,000
margins. 
So they have to go all the way 

785
00:39:58,000 --> 00:40:01,900
to the end of 2024. 
And then finally in 2025, 

786
00:40:01,900 --> 00:40:05,500
they'll barely break, even with 
their streaming service at 

787
00:40:05,500 --> 00:40:09,800
similar scale of minus 3.6 
percent margins. 

788
00:40:09,900 --> 00:40:12,600
Netflix has 18.2 percent 
margins. 

789
00:40:13,000 --> 00:40:16,300
Netflix is a much more Cost 
effective business with their 

790
00:40:16,300 --> 00:40:19,500
content than dizzy. 
Let me repeat that. 

791
00:40:19,800 --> 00:40:23,500
Netflix is leveraging their 
content and their spend on 

792
00:40:23,500 --> 00:40:26,500
content more effectively than 
Disney. 

793
00:40:26,800 --> 00:40:30,000
Now, again, there's lots of 
opinions and arguments on 

794
00:40:30,000 --> 00:40:32,800
Netflix, I'm aware that it's not
a popular investment. 

795
00:40:32,900 --> 00:40:35,100
I don't think really anybody. 
I know likes the investment 

796
00:40:35,100 --> 00:40:37,900
besides me, but I look at 
Netflix and I think that the 

797
00:40:37,900 --> 00:40:40,400
argument that they don't have 
intellectual property, they have

798
00:40:40,400 --> 00:40:41,900
no shows people really want to 
watch. 

799
00:40:42,200 --> 00:40:43,900
I think, stranger things, proves
that wrong. 

800
00:40:44,600 --> 00:40:47,600
Pitcher Wednesday was a massive 
Global hit. 

801
00:40:47,600 --> 00:40:49,700
They're going to be doing season
after season of that. 

802
00:40:49,800 --> 00:40:51,400
That's one of their most watched
shows. 

803
00:40:51,600 --> 00:40:54,600
In fact most of their most 
watched shows just came out last

804
00:40:54,600 --> 00:40:58,200
year, Dahmer, those type of 
shows, always do really well for

805
00:40:58,200 --> 00:41:01,200
Netflix, they have massive 
documentaries, they have comedy 

806
00:41:01,200 --> 00:41:04,200
specials, they have things like 
squid game, International 

807
00:41:04,200 --> 00:41:06,300
successes that come out of Korea
and I think there's going to be 

808
00:41:06,308 --> 00:41:09,200
more of those as well. 
So the idea that Netflix doesn't

809
00:41:09,200 --> 00:41:10,900
have any content that people 
want to watch. 

810
00:41:11,500 --> 00:41:14,400
I think is just, it's something 
it's a narrative. 

811
00:41:14,500 --> 00:41:16,400
That will never end. 
I don't think people ever be 

812
00:41:16,400 --> 00:41:18,800
convinced otherwise no matter 
what the numbers say. 

813
00:41:19,100 --> 00:41:22,300
How many huge breakout success 
is Netflix has I don't think 

814
00:41:22,300 --> 00:41:23,600
they're ever going to change 
that narrative. 

815
00:41:24,200 --> 00:41:28,300
But regardless we have the data 
here, basically proving that 

816
00:41:28,300 --> 00:41:31,900
Netflix is more effective with 
their content spend, than Disney

817
00:41:32,300 --> 00:41:34,900
Disney's current streaming 
strategy, is leading to in 

818
00:41:34,900 --> 00:41:38,100
efficiencies Netflix. 
Generates 61 percent more 

819
00:41:38,100 --> 00:41:39,800
Revenue than Disney and 
streaming. 

820
00:41:40,300 --> 00:41:43,800
Okay, Netflix spends, thirty 
four percent more on 

821
00:41:43,800 --> 00:41:46,000
programming. 
Action cost than Disney. 

822
00:41:46,100 --> 00:41:50,300
So Netflix spends, thirty four 
percent more to generate, sixty 

823
00:41:50,300 --> 00:41:53,700
one percent, more Revenue, 
Netflix spends, thirty percent 

824
00:41:53,700 --> 00:41:57,200
less on other expenses than 
Disney they're literally 

825
00:41:57,200 --> 00:41:59,800
spending less to generate far 
more Revenue. 

826
00:42:00,000 --> 00:42:02,200
They are much more 
cost-effective than Disney on 

827
00:42:02,200 --> 00:42:06,500
the streaming front and Netflix 
ibadah margins are 4,000 basis 

828
00:42:06,500 --> 00:42:08,900
points higher than Disney. 
We have the E bottom margins of 

829
00:42:08,900 --> 00:42:11,500
Netflix right now, at 18.2% for 
Disney. 

830
00:42:11,500 --> 00:42:14,400
It's - 21.9%, which is a 40 
percent. 

831
00:42:14,500 --> 00:42:16,800
Difference, I think with 
observing the streaming industry

832
00:42:16,800 --> 00:42:19,700
over the past three years, it's 
shown that what Netflix has 

833
00:42:19,700 --> 00:42:22,000
accomplished already. 
In my opinion, is much more 

834
00:42:22,000 --> 00:42:24,900
difficult than what most 
investors are making it out to 

835
00:42:24,908 --> 00:42:27,600
be. 
Getting to scale becoming 

836
00:42:27,700 --> 00:42:31,200
profitable on a free cash flow 
basis, even adjusted for 

837
00:42:31,200 --> 00:42:33,600
stock-based. 
Compensation is incredibly 

838
00:42:33,600 --> 00:42:36,100
difficult. 
Even at the power, the 

839
00:42:36,100 --> 00:42:39,000
intellectual property, even with
the parks subsidizing. 

840
00:42:39,000 --> 00:42:43,000
It Disney's not even close to 
Netflix, not even close. 

841
00:42:43,400 --> 00:42:45,700
They are under price. 
Their service compared to 

842
00:42:45,700 --> 00:42:47,900
Netflix. 
There are subsidizing the cost 

843
00:42:47,900 --> 00:42:51,500
they're throwing their free cash
flow in the - losing 11 billion 

844
00:42:51,500 --> 00:42:55,200
dollars so far with two years of
projected losses and they're 

845
00:42:55,200 --> 00:42:58,500
still not even close to Netflix.
All of that effort just to try 

846
00:42:58,500 --> 00:43:01,600
to catch up to him. 
Despite Management's rhetoric, 

847
00:43:01,700 --> 00:43:04,400
We Believe Disney has never 
thoroughly reviewed its cost 

848
00:43:04,400 --> 00:43:07,500
structure as evidenced by the 
fact that over the last three 

849
00:43:07,500 --> 00:43:11,500
years costs have outpaced sales 
by four hundred basis points. 

850
00:43:11,500 --> 00:43:13,700
Sales have gone up six percent, 
that's the revenue of the 

851
00:43:13,700 --> 00:43:16,100
company. 
Costs have gone up 10% when 

852
00:43:16,100 --> 00:43:19,700
costs are out scaling sales, 
you're not becoming more 

853
00:43:19,700 --> 00:43:22,400
operationally efficient, you're 
becoming more bloated. 

854
00:43:22,400 --> 00:43:25,000
Now we have the one good part 
about Disney, the thing that's 

855
00:43:25,000 --> 00:43:27,600
actually going well so far which
is the parks. 

856
00:43:27,800 --> 00:43:30,800
But there's even arguments 
against that he's making the 

857
00:43:30,800 --> 00:43:33,200
case here, that the parks are 
over earning. 

858
00:43:33,200 --> 00:43:36,100
And I think this is part of Che 
Peck. 

859
00:43:36,300 --> 00:43:39,200
He went in, and he basically 
raise prices to the max, with 

860
00:43:39,200 --> 00:43:41,300
the park, really squeezing 
Disney. 

861
00:43:41,300 --> 00:43:45,300
Customers nickel, and diming, 
you have to have the A Disney, 

862
00:43:45,700 --> 00:43:48,300
what is it that Genie thing 
where you have to pay $20 per 

863
00:43:48,300 --> 00:43:51,500
person per day on top of that? 
There's extra rides you have to 

864
00:43:51,500 --> 00:43:54,500
pay extra to skip the lines, the
prices of everything, in the 

865
00:43:54,500 --> 00:43:57,000
park have gone up. 
The park, attendance has become 

866
00:43:57,000 --> 00:44:00,000
a different experience because 
it's becoming very expensive. 

867
00:44:00,200 --> 00:44:03,600
And even though that works in 
the short-term raising prices, 

868
00:44:04,000 --> 00:44:05,800
it's a dangerous strategy in the
long term. 

869
00:44:05,800 --> 00:44:09,200
Disney has historically relied 
on price to drive growth and 

870
00:44:09,200 --> 00:44:12,600
margins at domestic Parks which 
we believe is an unsustainable 

871
00:44:12,600 --> 00:44:14,300
growth strategy. 
Continue. 

872
00:44:14,500 --> 00:44:17,200
Lee just raising price after 
raising price before the 

873
00:44:17,200 --> 00:44:20,300
covid-19 pandemic, Disney's 
domestic Parks had grown per 

874
00:44:20,300 --> 00:44:23,600
capita guest spend at a 6%. 
Compound annual growth rate 

875
00:44:23,600 --> 00:44:28,300
that's from 2011, to 2018 with 
more muted attendance growth. 

876
00:44:28,500 --> 00:44:31,400
This is shifted dramatically 
with management noting that per 

877
00:44:31,400 --> 00:44:36,100
capita spending grew nearly 40% 
and fiscal 2019. 

878
00:44:36,100 --> 00:44:40,200
So the price people are paying 
in the parks on average since 

879
00:44:40,200 --> 00:44:44,300
2011, to 2019 was 6%. 
And then it went up, 40% in a 

880
00:44:44,500 --> 00:44:48,300
Year that is incredible. 
All of a sudden, the parks got 

881
00:44:48,300 --> 00:44:49,900
dramatically more expensive in 
here. 

882
00:44:49,900 --> 00:44:52,900
We have the highlighted problem 
that Disney has become dependent

883
00:44:52,900 --> 00:44:55,200
on their parks to fund the rest 
of their business. 

884
00:44:55,500 --> 00:44:58,500
This is not a good situation to 
be in, they're basically relying

885
00:44:58,500 --> 00:45:00,900
on it, they can't lower prices 
because it's paying all the 

886
00:45:00,900 --> 00:45:03,000
bills. 
Paying down their debt, paying 

887
00:45:03,000 --> 00:45:05,600
all their interest expense 
paying for all the streaming 

888
00:45:05,700 --> 00:45:07,700
capex. 
Spend a lot of that is coming 

889
00:45:07,700 --> 00:45:11,000
from the Parks. 
From 2019, it was 30% now, it's 

890
00:45:11,000 --> 00:45:13,700
44 percent. 
Not a good situation to be in. 

891
00:45:13,800 --> 00:45:16,200
So overall, All again, in my 
opinion, I was reading through 

892
00:45:16,200 --> 00:45:19,000
this and I thought these 
criticisms weren't only 

893
00:45:19,000 --> 00:45:21,100
warranted. 
I thought they were excellent. 

894
00:45:21,200 --> 00:45:24,200
I think that his analysis of the
company and the problems with it

895
00:45:24,400 --> 00:45:27,100
are dead on. 
There's a reason why Disney is 

896
00:45:27,100 --> 00:45:29,500
rejecting Nelson Peltz. 
There's a reason why they're 

897
00:45:29,500 --> 00:45:32,500
going to try to convince you. 
That it's not in your interest 

898
00:45:32,500 --> 00:45:36,300
to have him on the board, but 
don't be fooled. 

899
00:45:36,400 --> 00:45:40,100
If you're dizzy investor, you 
want Nelson Peltz on the board. 

900
00:45:40,200 --> 00:45:42,600
You want him to get things into 
shape because a company. 

901
00:45:42,600 --> 00:45:45,900
So far has been run in a way 
that And if it's to co-benefits 

902
00:45:45,900 --> 00:45:49,300
the directors, but does not 
benefit the shareholders and 

903
00:45:49,300 --> 00:45:52,300
that needs to change. 
So my opinion, I'm going to look

904
00:45:52,300 --> 00:45:54,600
for Nelson Peltz to get his 
board seat. 

905
00:45:54,600 --> 00:45:58,900
I want him on the board and 
honestly, I'm at the point now 

906
00:45:58,900 --> 00:46:01,900
with Disney that I've seen so 
much mismanagement, I've been 

907
00:46:01,900 --> 00:46:04,500
looking for an exit with this 
company, looking for a little 

908
00:46:04,500 --> 00:46:06,300
bit, better of a bid from the 
market. 

909
00:46:06,900 --> 00:46:11,900
If Disney successfully rejects, 
Nelson Peltz board seat and he's

910
00:46:11,900 --> 00:46:14,500
not able to get in and actually 
help this company and he, Just 

911
00:46:14,500 --> 00:46:16,600
bails out and says, okay, they 
don't want my help. 

912
00:46:16,900 --> 00:46:19,200
I'm probably going to sell my 
shares, that'll probably be the 

913
00:46:19,200 --> 00:46:22,300
point where I say, there's other
companies I can invest in, but 

914
00:46:22,300 --> 00:46:25,100
if he is able to get on this 
company, he has a very good 

915
00:46:25,100 --> 00:46:27,500
track record of turning these 
type of companies around. 

916
00:46:27,600 --> 00:46:28,800
So I'm going to wait and see 
right now. 

917
00:46:28,800 --> 00:46:30,600
I've held Disney for a long 
period of time. 

918
00:46:30,700 --> 00:46:33,400
It's not my biggest holding by 
any means, but it's a company 

919
00:46:33,400 --> 00:46:36,400
that I still think has a ton of 
potential that's being unmet. 

920
00:46:36,600 --> 00:46:39,600
And if Nelson Peltz is able to 
make the company going a better 

921
00:46:39,600 --> 00:46:41,900
Direction, I'll continue to hold
my shares. 

922
00:46:41,900 --> 00:46:44,000
So that's my thoughts so far, I 
hope you enjoyed this little 

923
00:46:44,000 --> 00:46:44,700
update. 
Eight. 

924
00:46:44,800 --> 00:46:45,600
See you in the next one.