Ahead of the April 3rd Annual Meeting of Shareholders, Trian Partners has released a 133-page “white paper” that outlines its plans to “restore the magic” at The Walt Disney Company should it win the two Board of Directors seats that it is seeking. At a high level, Trian’s plan for the Disney theme parks is to “refine Parks strategy to include return on investment targets and a commitment to improving the guest experience”.
In the white paper, Trian acknowledges how powerful the Parks business is, noting that it accounts for nearly 40% of the company’s revenue, and 70% of Disney’s company-wide earnings before interest and taxes. At a higher level, Trian says that the Experiences division, which includes things like Disney Cruise Line in addition to the theme parks, is “an extremely valuable and one-of-a-kind business worthy of more investment”.
Out of the 133 pages in the white paper, Trian dedicates 4 pages to its theme park plans, which really reads more like a list of fan complaints than actual plans for how they plan on influencing the business should they receive Board seats.
One of the biggest complaints that Trian has is a lack of clarity on where Disney will spend the $60 billion of CapEx that the company has previously announced. Honestly, we’re wondering the same, but I’m not seeking a seat on the Board of Directors. The Trian plan seems to be primarily focused on setting and hitting return on investment goals for invested CapEx. It’s hard to imagine that Disney doesn’t have ROI top of its mind when spending money, especially given the current leadership’s focus on the financials.
To be completely honest, Trian’s pitch to focus on ROI for projects sounds like it would be in lockstep with how current Disney Experiences Chairman Josh D’Amaro and his predecessor Bob Chapek ran the division. Here’s a look at the relevant slides dedicated to the Parks.
Complaints about how investors would benefit from the $60 billion invested in theme parks are great for Wall Street but probably isn’t what theme park fans want to hear from prospective new Board Members. While both fans and Wall Street would benefit from hearing more details around Disney’s $60 billion CapEx investments, complaining about a lack of clarity sounds more like social media discussions rather than a plan to improve the Board that Trian seeks two seats for.
Speaking of social media fodder, Trian includes a slide dedicated to the upcoming Epic Universe. Trian flags that Universal Orlando is looking to capture more of the Orlando tourist dollar, but asks a question that Disney has already answered. Trian wants to know how much of the $60 billion worldwide CapEx investment will be allocated to Walt Disney World. In fact, Disney announced a $17 billion investment in Walt Disney World 5 months before they announced the $60 billion investment for the Experiences division as a whole.
Trian ends its Parks-focused slides by discussing wait times and ride downtime. Again, both issues are discussed often on social media, but Trian’s strategy of “a focus on delighting” theme park guests doesn’t seem radically different than goals of the current Board.
For theme park fans, a strategy of yield management and CapEx return on investment should not sound dissimilar to the Chapek years and the start of the D’Amaro tenure, and that appears to be what the Trian plan would be going forward. To read their full white paper, visit the Restore the Magic website.
To see Disney’s position on the proxy battle and claims made by Trian, visit the VoteDisney.com website.
As always, keep checking back with us here at BlogMickey.com as we continue to bring you the latest news, photos, and info from around the Disney Parks!