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 chain of events that led to ABC pulling the show unfolded unusually fast, starting with a thinly-veiled threat from Federal Communications Chair Brendan Carr that his agency might take action against the network over accusations that the late night host mischaracterized the politics of the man who allegedly killed Charlie Kirk. Within five hours, Nexstar, an owner of ABC affiliate stations around the country, said that it would pre-empt the show. Minutes later, ABC caved.
The aftermath, which sparked national debates over censorship, saw calls to boycott Disney subscriptions and threats from talent indicating that they’d stop working with the studio until Kimmel was allowed to return. Last week, Disney’s stock fell by over two percent, with its market value plummeting by nearly $4 billion.
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.
Although Kimmel was allowed to return to ABC’s airwaves, Disney will likely continue to see ripple effects from its handling of the suspension. On Tuesday, President Trump said on Truth Social, “I think we’re going to test ABC out on this. Let’s see how we do.”
In a statement, Roberta Kaplan, a lawyer for the shareholders who represented E. Jean Carroll in sexual abuse and defamation lawsuits against Trump, said large media companies “should not succumb to unconstitutional threats or blackmail.” She added, “ABC was the network to run the series Schoolhouse Rock more than fifty years ago. Its leadership should pay attention to the important lessons it taught.”
