Disney Hit With Legal Salvo From Shareholders Over Jimmy Kimmel Suspension

[Amaryllis]

https://www.hollywoodreporter.com/business/business-news/disney-hit-legal-salvo-shareholders-jimmy-kimmel-suspension-1236379327/

The entertainment giant may soon have to turn over documents and communications dealing with the late-night host's sidelining, including company moderation polices and copies of deals with affiliate stations addressing their right to pre-empt programming.

A group of Disney shareholders are exercising their right to demand materials related to the company’s decision last week to suspend Jimmy Kimmel‘s late-night show, a precursor to a potential lawsuit.

In a letter to Disney, the American Federation of Teachers and Reporters Without Borders said there’s “credible basis to suspect” that the board breached its fiduciary duty to investors by prioritizing “improper political and affiliate considerations.”

“The fallout from suspending Jimmy Kimmel Live! sparked criticism as an attack on free speech, triggered boycotts and union support for Mr. Kimmel, and caused Disney’s stock to plummet amid fears of brand damage and concerns that Disney was complicit in succumbing to the government overreach and media censorship,” stated the letter, first reported by Semafor.
The shareholders are asking for board materials related to the suspension of Kimmel. They also seek communications with government officials, Nexstar and Sinclair over the decision; copies of Disney’s deals addressing affiliate stations’ right to pre-empt programming; policies regarding moderation of late-night programming; and information on the company’s ability to obtain regulatory approval in other areas of its business.

The purpose of the so-called “books and records” demand is to investigate potential misconduct. Depending on what they uncover, the investors could file a shareholder lawsuit. “There is a credible basis to suspect that the Board and executives may have breached their fiduciary duties of loyalty, care, and good faith by placing improper political or affiliate considerations above the best interests of the Company and its stockholders,” said the letter, which cites concerns of whether Disney took into consideration Nexstar’s $6.2 billion megamerger with Tegna.

[Fil1957]

1. Nice one firing Jimmy Kimmel Bob Iger! A true masterstroke!

[Aviation Pro]

2. It was a stroke alright

Just not a master one.

[AllaN01Bear]

3. this i think, has lit a fuze so to speak.

[SpankMe]

4. I hope these investor groups throw a good shot across the bow with this action, but...

...remember that conservative investors tried the same thing and failed. When Disney and other companies promoted human-friendly policies - like pro-LGBTQ stances - thus causing conservative boycotts and dips in stock prices and such, the state of Florida threatened to sue them and throttle their ability to do business there on the same basis, i.e., breach of fiduciary duty, improper considerations above the interests of stockholders, etc.

When Budweiser started tanking after the ad campaign with trans influencer Dylan Mulvaney, conservative investor activists threatened all kinds of similar legal action against Anheuser-Busch. Nothing came of that, but there was still a lot of unpleasant noise.

[SickOfTheOnePct]

5. Completely support them doing this...

...but I would hardly call a 2.5% drop "plummeting".

[Bernardo de La Paz]

6. One merit, but "plummet"? Ha! About what the whole market fluctuated in the same time. Normal.

The merit in the lawsuit might be the records demand is I think the thrust of the Reporters Without Borders role.

But the kind of result that would be a bombshell would be the opposite. If the records were to show Disney caving to affiliate pressure re mergers, that would be too much in interest of stockholders and not in the interest of the public. Which would reignite the furore over the scandal.

[SickOfTheOnePct]

7. Agree 100% n/t

[ProfessorGAC]

11. Huh?

Disney stock is down 3.36%, ladt 30 days.
The Dow is up 1.6% over that same time, & Disney is in the Dow index.
They've underperformed the market.
And 60% of that decline is since the Kimmel suspension, or around 2%.
The Dow is flat over that same 8 days.
I looked it up because you apparently didn't.

[Bernardo de La Paz]

12. Kimmel was not fired 30 days ago. 3.36 pc or 1.6 pc or 2 pc up or down is normal for 30 days or 5 days or 8 days. . nt

[ProfessorGAC]

15. Try Reading What I Wrote

You're wrong. The numbers are right there.
Disney is down 2% since the 17th. The Dow is the same.
Disney, since September 17, did not go down as the rest of the market, because the Dow, of which Disney is a part, did not go down.
I provided greater context with the 30 days, and that was abundantly clear.
You're insisting on being right when the actual market numbers contradict your view.

[Bernardo de La Paz]

16. I read what you wrote. The suit is seeking transparency about the capitulation. There is no case over stock value

The price volatility you wrote and that I read is very normal, entirely consistent with common movements in stock prices, to the degrees that you wrote and that I read and that I quoted. The three periods involved that you wrote and that I read and that I quoted are ordinary for price movements such as those written, read, and quoted.

In April there was a big two day drop in the stock market. That was unusual, uncommon, not ordinary.

DIS made a three year (or more) peak at $124 in early July. Then it began a decline. In other words, the decline began long before Kimmel, which your own data made the point. It is now $113, down $11 or less than ten percent.

On two days August 6 and 7, it declined from $118 to $113. That is a bigger faster swing than is being complained about now. Further, the stock has not lost value since August 7.

If every 2 % swing was litigated, then all of the thousands of stocks would face many dozens of lawsuits every year. Thankfully that does not happen.

The plaintiffs do not have a case. The volatility is not unusual, the dollar amount is small relative to things. They might get discovery, but they will not get monetary compensation because none is due, absent some non-hyperbolic non-bombastic bombshell which is highly unlikely.

[ProfessorGAC]

8. Just For Clarity

Disney stock is down 3.36% in the last 30 days.
60% of that drop was after the Kimmel decision.
So, a stock heading south was made worse by the decision to suspend the program.
I'd be angry is I was a stockholder, too.

[Bluetus]

9. Not to defend the mouse, but we need to understand

this was an EXTORTION SCHEME by Trump. What shareholders should be investigating is how and when Disney made the payoff to Trump.

Disney had no particular reason to want Kimmel off the air. They were put into a vice by Trump's exportation at the same time Sinclair and friends were attacking. Disney made a strategic decision to temporarily take Kimmell down with the hope that public outrage would get Disney out of their vice.

After all, regardless of Kimmel, DIsney has a strong interest in NOT having the government dictate their programming. IMHO, they played their cards smartly. And they might decide to make it easy for the shareholders to expose Trump's extortion scheme. THey may actually be welcoming this shareholder action. They can do serious harm to Trump without being the bad guys. They can take the position, "Hey, what were we supposed to do? This was an extortionist holding us up for ransom."

[ProfessorGAC]

10. I Guess We'll See

But, Disney is the one with a legal issue right now, not Trump or his minions.
I see it more a knee-jerk capitulation.

[Bluetus]

14. I am not sure we WILL see. Most of what is important in our society

is well hidden. However, if one listens carefully to Kimmel's re-entry monologue, it is clear that he was in close contact with ABC throughout that down week, and that the discussions were at least cordial.

We all would have preferred to have seen ABC come out with "Hell no. Kimmel stays. He did nothing wrong. All you MAGA people just go F yourselves." But that was never going to happen. My view is that Disney held a really lousy hand and they actually played their cards wisely. Kimmel is back on the air. Disney emerges without much of a stain on its greater reputation. They will keep a few lawyers busy for several years, but that is a rounding error for Disney.

And I will not be surprised to find Kimmel's ratings improve a little, as many people learned more about his character and the importance of what he has to say.

[Bernardo de La Paz]

13. The plaintiffs will lose unless there is a smoking bombshell in the "records", which I doubt

The stock movement is a piffle.