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- Disney's proxy battle is expected to cost the company and rival hedge funds at least $70 million.
- Retail investors make up a big chunk of Disney shareholders, and it's expensive to reach them.
- The outcome of the shareholder vote could change Disney's direction, but its impact is still unclear.
This week's big Disney shareholder vote is supposed to be a seismic event — a referendum on the future of one of the world's most important entertainment companies.
Maybe!
But we can definitively say that the Disney proxy battle, which concludes on Wednesday, has been a nice boost for a collection of consultants and media companies.
That's because Disney and the hedge funds battling for seats on the company's board of directors are expected to spend some $70 million to wrangle votes over the course of the campaign.
That's a record for a proxy fight, and it's in large part because of the unique nature of Disney's shareholder base: As The New York Times pointed out, nearly 40% of Disney shares are owned by individual investors, as opposed to big funds like Vanguard.
So that means Disney and its rivals — Nelson Peltz's Trian Partners, as well as Blackwells Capital — have to work hard to wrangle each vote for this week's election, just like with a traditional political campaign.
That money gets spent on all kinds of stuff: "proxy solicitors" like Okapi Partners who engineer get-out-the-vote efforts; custom websites laying out the sides' arguments; and even ads in consumer media — like, for instance, Business Insider's daily email newsletter, which features a pro-Disney ad in Monday's edition.
Again, it's entirely unclear what will happen to Disney if Trian or Blackwells win their campaigns — simply getting some of their reps on Disney's board doesn't necessarily mean that Disney CEO Bob Iger will run the company any differently.
But Iger and his lieutenants are taking the vote very seriously, and so are their opponents, and that means money for lots of other people in the meantime.