Disney made a surprising announcement. It will add Carolyn Everson, a former executive at Facebook parent Meta, to its board. She is an odd choice. She has held senior positions at several tech companies but has not been one of the tech industry’s outright stars. However, the reality is that she joins Disney’s board due to pressure from activist troublemaker Third Point, which barely owns any Disney shares. Third Point has made enough difficult observations about Disney management that the entertainment company’s board decided it is best to make Third Point go away.

When Third Point made its investment, The Wall Street Journal pointed out, its ownership amounted to well under 1% of Disney shares. Why should a position of that size give it any leverage? Perhaps because its criticisms of Disney’s CEO Bob Chapek were correct. At least the Disney board decided it was best to get Third Point off its back. Susan Arnold, Chairman of the Board, commented: “Carolyn’s extensive background, including roles at a number of high-profile, complex global companies, brings a welcome and invaluable perspective as we continue to focus on expanding our brand and global reach.” The same could be said of hundreds of other board candidates. However, none were part of a settlement with Third Point.

What does Disney get? Third Point is prevented from presenting its own slate of directors. A fight over the board’s composition would be long, expensive, and a major distraction for the Disney board and management. It would also encourage Third Point to continue its criticism of Disney executives and their decisions. Disney’s shares are down 23% in the last two years, and By contrast, the S&P 500 is up 7%.

Disney’s decision about its board does not make its problems go away. The growth of its streaming business, which is at the core of its future, has slowed. This means it has decided to gamble on how much it can raise streaming subscriber prices. This is a very delicate balance. Raise prices too much and subscriber count usually drops. And its main streaming products — Disney+, Hulu, and ESPN+ — operate in one of the most competitive consumer sectors in the country and much of the rest of the world.

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Disney has given up on one fight but continues to have several others that will not be as easy to settle.

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