Disney Shareholders Accuse Company of Wrongdoing Over Jimmy Kimmel, But The Real Breach Would Have Been Doing Nothing

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A group of Disney investors, including activist organizations like the American Federation of Teachers and Reporters Without Borders, are requesting Disney’s internal documents related to the six-day suspension of Jimmy Kimmel. They believe there’s good reason to think Disney’s board acted improperly – failing to prioritize the company’s best interests – when they took Kimmel off the air after his controversial and inaccurate statements about the Charlie Kirk incident.

That initially sounds like a serious claim. Violating a fiduciary duty is usually something you’d see in a major business scandal or during a company takeover. However, when you consider it in relation to Kimmel, the argument quickly falls apart and doesn’t hold up to even basic examination.

Fiduciary Duty 101

Most public companies, including Disney (which is based in California but legally formed in Delaware), are governed by Delaware corporate law. This law outlines three key responsibilities for company boards of directors.

  1. Care: Act prudently, based on adequate information.
  2. Loyalty: Put shareholder interests above personal ones.
  3. Good Faith: Avoid deliberately harming the company.

For Disney’s leaders to have truly failed in their responsibilities, they would have needed to intentionally harm the company’s finances or long-term plans. Simply suspending Jimmy Kimmel, given the show’s declining viewership, lost partnerships, and increased scrutiny from regulators, doesn’t come near to meeting that standard.

The Ratings Collapse

Let’s not forget the bigger picture here.

Ratings for *Jimmy Kimmel Live!* have dropped significantly – nearly by half – over the past eight months. Major station groups, Nexstar and Sinclair, stopped broadcasting the show on their ABC affiliates, meaning many people across the country couldn’t watch. This caused a steep decline in advertising revenue and viewership, even before recent controversial comments further fueled the problem.

Disney’s decision wasn’t simply about a political issue; the real problem was that a valuable asset was declining in worth. Protecting Jimmy Kimmel would have actually been the greater financial risk for those who own Disney stock.

Regulatory Heat

On top of everything else, FCC Chairman Brendan Carr publicly condemned Kimmel’s comments and suggested there could be repercussions. Even if the FCC didn’t have the power to directly punish ABC, Disney’s board of directors needed to consider that possibility.

Any board that ignored an FCC chair’s warning could face shareholder lawsuits for not acting.

Why the Shareholders’ Argument Rings Hollow

Looking at the evidence, the shareholder letter seems less about actually protecting investors and more about making a political statement.

Okay, let’s talk about this whole Disney situation. I’ve been hearing a lot of noise about the decision to pull the plug on a show that wasn’t performing well, and the claim that it damaged shareholder value just doesn’t hold water for me. Looking at the numbers – the ratings were down, and they were losing viewers and partners – it was clearly struggling. To suggest Disney had some *duty* to keep supporting a host who was driving people away? That’s a stretch. Honestly, from where I’m sitting, Disney’s board did exactly what they *should* have done: they protected the company from further financial losses and potential legal trouble. They acted responsibly, and that’s that.

The Real Fiduciary Violation is Bringing Kimmel Back

To be frank, Disney’s biggest mistake isn’t pausing Jimmy Kimmel’s show-it might be rehiring him in the first place.

Why? Two reasons:

1. Affiliate Blackouts Continue

Despite Disney bringing back *Jimmy Kimmel Live!*, it’s still unavailable to viewers who get their TV through two major providers, Nexstar and Sinclair. This prevents millions of households from watching, which lowers the show’s advertising income and overall audience size.

2. A Ratings Spike That Won’t Hold

Jimmy Kimmel’s first show back after his hiatus had a lot more viewers, but experts say that one good night doesn’t fix a long period of declining ratings. It’s common for late-night shows to get a quick boost after some attention, but usually viewership goes back to normal soon after. Unfortunately for Kimmel, the overall trend has been a significant drop in viewers.

If a product’s viewership has dropped by almost half and advertisers and partners are pulling away, continuing to fund it doesn’t safeguard investors-it actually puts their money at risk.

Disney shareholders concerned about the company’s responsibility to them should question the decision to continue supporting Jimmy Kimmel, as his show is losing viewers and business partners. This ongoing support, rather than any temporary suspension, could be what ultimately harms the company’s value and shareholder interests.

The Bigger Picture

This isn’t a matter of legal responsibility to shareholders; it’s about using ownership in a company to fight political arguments. The group’s letter makes it clear: they’re not primarily concerned with maximizing profits, but with demanding that Disney justify its decisions in response to outside demands from partners and regulators.

The actual problem isn’t Disney taking a stand, but rather that some investors believe the company should continue broadcasting controversial content, even though fewer and fewer people are watching.

Some are framing the Disney shareholders’ concerns about Jimmy Kimmel as a demand for accountability. However, the real reason his show was temporarily paused is straightforward: it was struggling with declining viewership, partners were pulling support, and the show faced potential legal issues. This wasn’t a failure of Disney’s responsibilities; it was a responsible decision to address these problems.

While Disney’s leadership has made some debatable choices lately, their decision not to suspend Jimmy Kimmel was a smart one.

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2025-09-25 16:58