Greenmail disney plus

A interesting topic!

Greenmail is a term used to describe a situation where a company, in this case Disney, is threatened with a hostile takeover or a proxy fight by an activist investor or a group of investors. The company then agrees to make significant changes, such as firing executives, spinning off divisions, or increasing dividends, in order to avoid the takeover or proxy fight.

In the case of Disney+, the company has faced pressure from activist investors, such as Elliott Management, to make changes to its business strategy and operations. Elliott Management, which owns a significant stake in Disney, has been pushing the company to take steps to increase its profitability and reduce its debt.

Some of the specific demands made by Elliott Management include:

  1. Reducing Disney's debt: Elliott Management has been pushing Disney to reduce its debt, which stands at around $40 billion. The company has been using debt to finance its acquisitions, including the purchase of 21st Century Fox.
  2. Increasing profitability: Elliott Management has been urging Disney to increase its profitability by cutting costs and improving its operational efficiency.
  3. Improving its streaming strategy: Elliott Management has been critical of Disney's streaming strategy, which it believes is not effective. The company has been pushing Disney to focus more on its Disney+ streaming service and to reduce its reliance on its traditional cable TV business.

In response to these demands, Disney has announced several initiatives aimed at improving its profitability and reducing its debt. These initiatives include:

  1. Cost-cutting measures: Disney has announced plans to cut costs by $500 million in the next two years, which will help to reduce its debt and improve its profitability.
  2. Streaming strategy changes: Disney has announced plans to focus more on its Disney+ streaming service and to reduce its reliance on its traditional cable TV business.
  3. Dividend increases: Disney has announced plans to increase its dividend payouts to shareholders, which will help to attract more investors and improve its stock price.

Overall, the pressure from activist investors like Elliott Management has forced Disney to take a closer look at its business strategy and operations, and to make changes to improve its profitability and reduce its debt.