Disney Hit With Legal Salvo From Shareholders Over Jimmy Kimmel Suspension

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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.