Peltz’s Plan to Fix Disney

Activist investor Nelson Peltz believes Walt Disney Co. can achieve profitability in streaming by bundling its ESPN+ online service with a larger player interested in sports, such as Netflix Inc., according to Bloomberg citing people familiar with the matter.

Peltz’s Trian Fund Management LP will publish a so-called white paper detailing its investment thesis and recommendations for Disney in the weeks after the entertainment giant’s next earnings report on Feb. 7, according to the people, who asked not to be identified discussing nonpublic information.

Trian will also argue that Disney’s financial forecasts, including plans to spend $60 billion on its theme parks over the next decade, are too opaque, that its management structure should be simplified to eliminate redundancy, and that Wall Street needs more details on Chief Executive Officer Bob Iger’s recent cost cuts.

Nelson Peltz

Trian, which controls close to $3 billion in Disney shares, is seeking two seats on Disney’s board — for Peltz and Jay Rasulo, a former chief financial officer at the company.

Disney has rejected Trian’s nominees and said Peltz has failed to provide the company with any new ideas despite multiple meetings. The company didn’t immediately respond to a request for comment.

The company instead has appointed James Gorman, Morgan Stanley’s former CEO, and Jeremy Darroch, the former CEO of the Sky satellite TV service, as board members. Earlier in January, Disney also entered into an information-sharing agreement with ValueAct Capital, an activist investor that supports Disney’s nominees.

Disney already sells its three streaming services — Disney+, Hulu and ESPN+ — in a package at a discount. It cut a deal last year to provide Disney+ to subscribers of Charter Communications Inc., the second-largest US cable company.