to cnbc.com/pro. joe, becky, andrew, you get more details there. back to you. >> all right. final check on the markets. we're going to have an in depth discussion now on the fed's next move. we got 11 seconds. >> we'll do that tomorrow when we get jobs friday. >> is that true? >> yes. >> it's like it happens every month or something. >> you're quick. >> it's constant. >> i am. >> make sure you join us tomorrow. "squawk on the street" is next. we have turned the corner and entered a new positive era for the walt disney company. anchoring all of this work are four key priorities. >> disney and bob iger looking to move forward after shareholders re-elected the kmaen's board in this defeat for activist investor nelson peltz. good thursday morning. welcome to "squawk on the street," i'm carl quintanilla with jim cramer at post nine of the new york stock exchange. david faber is at disney hq in burbank, california. futures solid here as treasurys find some footing in the wake of

that ism services number and powell's comments yesterday. ten-year is back to 4.34%. we're going to begin with disney winning that boardroom battle against nelson peltz and looking forward to your interview, david, not too long from now. >> yeah, you know, so much to talk to bob iger about, as there always is, and i always look forward to our conversations as we have had them through the years. and even more recently, at a decent pace of late. you know, victory, as we all know, for disney, not unexpected, at least, if you've listened to my reporting through these last few weeks and months. i mean, jim, i'll come back to you on this. i don't know whether you were surprised at all. it was always seemingly an uphill battle for nelson peltz. i argued, i think, in part because it was never clear beyond just saying this company needs better board oversight or more focus on its succession, that there was anything he suggested in any way that hadn't already been taken up by disney and pursued and partially already executed on. >> i think it did come down to succession, david. i think that was the one thing

that you could argue they did really poorly, but you know what really defeated nelson, i think, is the stock was the best performer in the dow, and a lot of that may have been just bob iger focusing the company. you can certainly ask him, i think it would be great. i don't know how much it was, well, we got to focus in order to keep nelson off the board, but i think iger made a series of, let's say -- look, he came up with some good ideas. i also feel, david, you got to ask him this. they've got gorman doing the succession with parker, but gorman's a hitter, and i think that made a lot of people feel, wait a second, we got a new guy, fresh perspective, let's go with this. i would like to know, why did iss go with peltz and not with disney? i don't want to say iger, because i never felt this was peltz versus iger. you may disagree with that, but i never felt it was that. >> yeah, well, listen, it did get fairly personal, of course, is it may have been as much ike perlmutter and iger. that said, iger got 94% of the

votes cast in favor of his directorship. peltz, as we reported yesterday, 31% versus some 63% for the director that he was targeting. so, you know, a decisivevictory here for disney. as you typically do when you prepare for an interview, i went back and read through the transcript from our interview of february of '23. i read through our interview from sun valley. i read through andrew's interview with iger from his deal book and julia's more recently from the first quarter numbers. jim, one thing is that iger did make certain promises that he's already kept in terms of cost-cutting and turning certain things around. obviously, there is a great deal yet to come, but i also think that was in his favor as well. >> yeah, but let's not forget, hugh johnson came in, and i know hugh from pepsico. the guy is money. he comes in, he resets what you're doing financially with iger. iger comes back and endorses the

$7.5 billion instead of $5.5 billion in terms of cost cuts. is espn fixed? that wasn't something that nelson was even talking about. but is there a succession plan? that, i think, david, is the key thing to focus on if i were out there, and i know that you have read everything, but there still is a question. how did they go so wrong? how did that board, which we know was filled with heavyweights, go so wrong with succession? that, david, i really need to know. >> i'm not sure you're going to get there. we're going to -- we'll see. we'll see what i choose to ask. that's the nice part. >> you don't know. come on. bob could surprise you. >> i can ask whatever i want. i don't have to listen to what you want to ask. >> is that -- is that y-o-u or h-u-g-h? >> to your point, that was an important appointment for them, and the sense of urgency that hugh johnson said they are working with right now is also something that was well taken by the investment community in terms of sort of that sense,

kash carl, at dipsney, and trying so execute on so many things. most importantly, direct to consumer, they're going to have a $23 billion revenue number and get to profitability before the end of the year. >> yep. listening to diller on "squawk" this morning, i think his words were a great waste of time, and jessica did point out earlier that the focus now is going to be growth and pushing on the growth, particularly when it comes to dtc. >> the key is the margins. can you ever -- can you ever get close to what netflix has? well, they're not saying they're going to be able to do that in the near term, but i think the longer term, the hope is it will be a growth business. the conversation that bob and i have been having for years, of course, is, can you ever replace, in a real way, this business and the incredible margins that have come with the cable ecosystem? and the beauty of a business where people pay you even though they don't watch. that's still going to be extraordinarily difficult.

it's been a process that's been fascinating to watch. the battle against nelson, equally fascinating, and now we kind of move on from here, and see what happens. >> last night, i was watching last call k, and jeff sonnenfel was on. not a lot of meeting of the minds between nelson peltz and jeff sonnenfeld, but he was making the case this was nelson's finish. i won't go a step further by saying he thinks nelson is the greatest wealth destroyer of all time. it's not about nelson versus iger, but it did get so personal. was there a way that not as much money had to be spent, and was there a way to keep it not personal? there were issues about succession that obviously had some gravitas, or was it always going to end up being nelson versus iger, and therefore if you look at the percentage that iger got, that's a pretty clear victory for ger. >> 63-31 is still pretty clear

in terms of the director that he was focused on. listen. i think iger had made it clear from the very beginning, remember, when we -- when the first go-round, that he just never felt as though there was a real reason for nelson peltz or anybody else that he might nominate to be on that board given the board they had in place. that continued to be the case throughout. you talk about it being personal. we'll talk a bit about that. i don't want to give a sense as to how many questions we'll have, but ike perlmutter was the bulk of that trian position, so to speak, as you well know, jim, and there is no love lost between mr. iger and mr. perlmutter. >> that is probably one of the most bitter situations not just in entertainment, david, but in busi business, period. >> what did you make of this "journal" piece looking at trian's gains? >> well, i do think that if you spend, say, 25, $30 million, you get $300 million in return,

that that's not bad. i think there's just this big dispute about when nelson joins the board, how does a company do versus when nelson has a position in it when trian has a position in it. there's also just this kind of, like, overall -- this is the way -- should we be looking at companies like this? the guest who was talking, again, sonnenfeld, was saying you can't compare the s&p anymore. i think the s&p is a worthy benchmark, but carl, i think that when i look at what happened with nelson, i actually come back and say, there's a lot of that percentage of gain of disney that was because of him, and i don't want to just say, no, they suddenly just woke up and said, we got to get religion. companies don't that that. they don't say, you know what, we have been bad. let's be good. that's not the way it works in corporate america. >> of course, david and iger, just a few minutes away. we look forward to that. >> it's going to be unbelievable. got to tell you. i think -- not just because david's got the exact same shirt -- outfit combination, but i think david is going to be surprised at the highest road

that bob takes. now, i don't know whether he'll go back and say that peltz and he used to be friends and it's time to break bread. david, that break bread may be too hard. you think any bread will be broken? >> no, i don't believe any bread will be broken. but maybe nothing else will be broken either, so i guess that's -- >> that's true. we did try to get, david, steam boat willy. apparently, it's not public domain. it's just domain, whatever that means. it's like "seinfeld." >> yeah, whatever that was. right. meantime, moving on to markets. interesting picture the last 48 hours. ism services number, prices paid, lowest since 2020, and powell, sort of -- did the market take comfort in sort of the same refrain? >> yes. we got to get rid of the gas bags. i didn't mean that. >> there's a lot of fed speak today. >> fed people speak. i once spoke at a rotary club. it was nice. they do a lot of rotary club.

it's like babbitt, sinclair lewis. these people are, like, well, okay, they give speeches. they got to say something. fed's got to say, you know, someone from philadelphia has to say something and so does someone from st. louis, but there is one guy, and he's who we should be listening to, and the other guys are just noise. they are noise, carl. >> do you think fed speak has a tendency to want to be visible and stand out and maybe that moves their view at the margin to the extreme? >> no, i think they have to say something, and they do have views, but we have a very powerful fed chief. very powerful, who takes council of himself. one of the reasons he's so good is he's got rigor. he doesn't just bounce around. he's incredibly conscious of his words. these other people seem to think, you know, we can say whatever they want, because they're not playing a hedge fund game. they don't realize that we hang on every word and there's algorithms that go with them and now a.i. and chatgpt and what

they said before that and we're measuring that against gemini and looking at claude iv. they don't get that. they ought to just be quiet, but they do have to speak, in the same way that when i go to the rotary club, i couldn't just go up there and say, i think that bryce harper is the greatest hitter. you had to say something. >> meanwhile, jpm desk today, maybe tech can be supported here. >> yesterday was a fade rally. the only thing that was really up were the companies that benefitted from the fact that taiwan semi was offline for a couple days. the d-rams can be made in our country by micron, and they were offline in taiwan. that gave micron a big edge, so micron's stock just shot up. dell had enough -- they had the right chips at the right time, so they can go up. it was the taiwan earthquake, and that's kind of going to fade as we realize that maybe powell

is not bad and moves the 30-year. but i don't want to get too excited until we see the number. >> you mean tomorrow? >> yeah. we need to know that wages haven't gone up and these people aren't making more, unfortunately. that's the reality of what we want. but we stay with employment strong, because that's what -- what powell's arguing right now is, hey, listen, we are actually getting -- we're kind of nirvana here. we have more people employed, and wages aren't going up. why do we have to cut to accelerate it? if things get bad, we'll cut. that's been what he's been saying for two years. but somehow, we've got fed chief from -- we should have more fed chiefs. i think that, frankly, trenton should have a fed chief, and by the way, san jose, lacks a fed chief. >> we're going get the jobs over to tomorrow. claims did come in 221, a little ahead of 214, but tomorrow is going to be a big day, and powell literally did say, policy is in a good place. >> yeah. >> when we come back, we'll get the latest on m&a. david's got some news surrounding paramount. we'll lean on him for that. as we mentioned, his exclusive

with disney's bob iger in just a few moments. we'll get to levi's, boeing, tesla. "squawk on the street" is back in a minute. the future is not just going to happen. you have to make it. and if you want a successful business, all it takes is an idea, and now becomes the future where you grew a dream into a reality. the all new godaddy airo. put your business online in minutes with the power of ai. (bobby) my store and my design business? we're exploding. put your business online in minutes but my old internet, was not letting me run the show. so, we switched to verizon business internet. they have business grade internet, nationwide.

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her uncle's unhappy. i'm sensing an underlying issue. it's t-mobile. it started when we tried to get him under a new plan. but they they unexpectedly unraveled their “price lock” guarantee. which has made him, a bit...

unruly. you called yourself the “un-carrier”. you sing about “price lock” on those commercials. “the price lock, the price lock...” so, if you could change the price, change the name! it's not a lock, i know a lock. so how can we undo the damage? we could all unsubscribe and switch to xfinity. their connection is unreal. and we could all un-experience this whole session. okay, that's uncalled for. ♪ welcome back to "squawk on the street." seems like an appropriate place for me to be here in burbank when we talk about paramount, not too far from here at least in terms of the paramount lot and the like. stock is going to look down this morning but was up sharply

yesterday, this on reports in "the journal" and other places that david ellison, who runs sky dance, is in exclusive talks with shari redstone of paramount. if you look back on my reporting, you'll see it's one i've been focused on because so many other around the situation have said it has the best chance of happening. doesn't mean it necessarily will, but certainly the best chance. along with that reporting yesterday was also news that apollo, which had previously been on the paramount studio, had made an offer of $26 billion. that's an enterprise value. remember, paramount as about 11 or $12 billion in debt. but $26 billion enterprise value overall bid for the whole company. that may have given shareholders some excitement, perhaps, but of course, you have to be reminded what a control shareholder is. they have the right to say, no, to anything they want to say no

to, and in this case, as i previously reported, shari redstone has not been interested in either a bid for the studio, for which if there were to be an actual sale, you imagine there might be other buyers, and/or a deal at all. my understanding is yes, apollo did put a letter in, but there was not a lot of detail around it, not a lot of work that was presented along with it. some people even mentioning it wasn't even signed by the upper echelons of the firm, which perhaps gave them some pause. nobody is questioning apollo's ability to mount a bid. it is one of the major alternative asset managers out there, but in this case, there seems to be some doubt accompanied with it and perhaps that has also contributed to why they are very much focused on trying to see if they can get to the finish line with david ellison, who runs sky dance, and his partners at red bird, the bid that they may have. that is a complicated transaction. i've gone through it in the past. it would involve the merging of the sky dance studio with paramount. it would involve paying a premium for national amusements

and the stake, of course, that it has the control stake in paramount, but not necessarily buying out the company. along with this deal is an important component that i have mentioned a number of times, but perhaps it's not gotten enough focus. the need to raise as much as $3 billion in new equity by paramount. that would be part of the deal were it to be agreed to. now, my understanding is that ellison and his partners would step up for a purchase of a good amount of that equity, but it would be dilutive. it would be common. it would be dilutive. it would be done in part to enable delevering and also to give the company some growth capital and put it on firmer financial footing. this is a company that just had its bond rating downgraded very recently as well. there's plenty to come here. special committee, of course, has to weigh in. its advisors have to weigh in. i'm hearing a lot of at least positive perspective on the possibility that this deal does get to the finish line as difficult as it might be to actually execute that.

there does seem to be a real affinity in terms of shari redstone for the plan that's been put forward by mr. ellison, for the synergies that would be available, the change in operations. interesting to watch and see, and always important to point out to people, when you have a control shareholder, you can't guarantee that you're going to come out on the right side here. now, there is going to be a need for potential majority of the minority vote. you have a special committee, as i've said, by the way, as part of the deal, they have to agree that sky dance could get merged into paramount, but keep an eye on that $3 billion in equity, jim, because it would potentially be dilutive, but my understanding is, even if this deal doesn't happen, there may be a need to raise additional equity down the road. >> obviously, let me just posit, we all know that the weakness at many of these different outfits, warner bros. discovery, us at disney, is linear. why would anyone want this property?

>> it's a good question, and it's one that actually barry diller seemed to raise on his conversation with the "squawk" gang earlier. and diller's somebody who should know. it was 30 years ago when he competed with shari's father, sumner redstone, to buy paramount if you recall. the purchase price ended up being some $10 billion, just roughly where the market cap of this entire thing is right now, not including debt. take a listen to what diller had to say. >> it's the worst time in the world to sell this thing. it couldn't be -- i mean, it is a perfect candidate for actually turning itself around, but the idea that you ought to sell it -- because whoever gets in it at whatever base they get in it for, there's an enormous amount of work that's going to have to take place. >> there is a belief, jim, that you can, in fact, turn it around, perhaps in a more effective way with ellison, sky

dance being a part of it. we'll see. we'll be following it to the extent we can and share whatever we find along the way. >> david, you have been unbelievable at anticipating the problems with these companies. isn't there a charter negotiation going on? >> yes. you know, jim, it's funny -- yes. you're absolutely right. there's an important distribution negotiation coming up with charter. and by the way, i mean, remember the disney deal that they did. you have to wonder what that's going to mean for paramount. yes, that's not unimportant. i'm glad you raised it. >> meantime, guys, we'll get to some of the sell-side reaction today. bunch of downgrades. b of a, square, dave and busters, bumble, ferrari, and david's exclusive with disney's bob iger when we come back. you know doug, ever since switching to workday you've been a real rock star.

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take a look at premarket here. got some gains, trying to erase what's been a pretty tough week, especially for the dow. we'll get to some of the sell-side calls, and of course, david's exclusive with bob iger in the wake of disney winning

that proxy fight. the opening bell, coming up in nus. than four and aal hf hf mite

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let's get to cramer's "mad dash" as we wait for the opening bell. >> i like this conagra quarter. i've been waiting for some sort of inflection where they had to put 30% increase. 30%, they had to raise everything, just to be able to meet all the different input costs. well, this was the quarter where it looks like it's getting together to the point where you've got the volume's going up. and you don't really have a lot of worry about costs, so you're going to see the stock do better. now, when you speak to the company, it's really interesting. younger people, gen z, whatever, they didn't like to cook. i they did it instead of healthy choice, instead of their meals being seven days a week, they cut it to five, and you scratch cooking, that's what sean connolly -- he's a great guy. scratch cooking is done. they want to go back to the store, and they're doing it. and the behaviors are returning to the old way. >> it's going to be good to clear out some of those weird covid dynamics or post-covid

dynamics. >> thank you. i'm going to think -- i'm thinking about focusing the top of my show tonight on how we're finally getting back to just almost everything's back to the way it was, and that's why conagra is up. people want to go away. people want to spend less money. we're back. supermarket. >> let's get the opening bell at the cnbc realtime exchange. at the big board, destiny celebrating its recent listing at the nasdaq. five9, provider of an intelligent cx platform celebrating its tenth listing anniversary. nice breadth at the open. >> yes, and i've got to tell you, this is one of those days, it shows you, when powell speaks, everybody listens, and i think powell also made it so no matter what happens tomorrow, which i think is very consequential, because the employment number matters tremendously, you've gotten some cover here, and the cover is indeed to buy tech. i do want to opppoint out, we dt have a lot of earnings, but michelle gass at levi strauss

put together a phenomenal quarter. she's replacing chip berg, but denim is in, denim is hot. it's a denim moment, as she called it. they're the king of denim. you're going to see some good numbers. there was someone who came on air yesterday and recommended shorting levi strauss. well, i got an invitation to that person's funeral, which, again, is reference to "american rascal," and i think that was the beginning of what could be several great quarters. >> they did talk about sort of a structural shift in the business to the upside. that said, jim, people still scratching their head about beauty. >> i'm firmly a believer that tom kingsbury, who was just a great operator at burlington, he lead on lvmh. when you go to kohl's, my kohl's says, kohl's/sephora, and lvmh own sephora. they can come in underneath ulta. it was mentioned only by

transition, by mr. kimble, and my worry about them is that they have met the competitive threat, and it is -- it's kohl's. it's not themselves. >> yeah. ulta managing to find a little leg here after a drubbing yesterday. >> very good company. but kingsbury, i have had dinner with kingsbury, and he's a clinic. you get there and you think you got all your questions, and you realize after seven minutes, just shut up and listen. he's also dynamic, terrific guy. we've got -- we're getting a lot of, i think, a delayed reaction to the fact that intel, which was terrible, has to spend a lot more money on semicap equipment. there are a lot of people who believe that semicap equipment was damaged in taiwan. the earthquake, it was as if people said, the first day, everything's fine. and now, we're getting a read, say, within applied materials, within lam research, maybe something did go wrong there. i can't tell.

all i know is that it's a tech day, and a stock that has been down relentlessly since the gtc meeting, which is the big conference that jensen huang put on, is up today. and remember, you're talking about a stock that was at $974 on march 8th and fell to the high 800s. it's been a terrible correction for nvidia if you're a big nvidia, came in for the conference. if you're a long-term holder of nvidia, you don't even notice the split. >> you're right. lam research, broadcom, all positive here. >> i like lam research, and i don't like lamb weston. anti-fries and pro chips. >> dow is up 272. let's get to disney hq where david, of course, has a very special guest. david? >> carl, thank you. yeah. i'm here on the disney lot or as mr. iger just called it, walt's house. it's good to have you, bob. bob iger, of course, ceo of disney.

emerging victorious from a slug fest of a proxy fight. you won by substantial margins, but i do wonder, bob, 31% of shareholders did say they would like to have peltz on the board. do you listen in any way differently to that shareholder base? does it make you think about the things you've done any differently? all right. you won. you won big, but 31% still said, hey, you know what, we'd prefer to have this guy on the board. >> this whole process gave the board and some members of management an opportunity to engage with many shareholders, perhaps on an even deeper level, and have good, honest, candid dialogue, where we had an opportunity to describe to shareholders what our priorities are, and what our various processes are, including succession. and we had an opportunity to listen to them and hear what was on their minds as well. so, i think if anything came of this that's positive, it's that it did, in fact, increase the

engagement that we have had with shareholders, and that's a very good thing. >> yeah. i mean, you spent a lot of time with those shareholders over these last few weeks and months, and i wonder, was there one or two themes in particular that, as you mentioned this, that sort of helped you kind of focus more than you might have previously? >> well, i think what we heard was surprisingly, maybe, consistent with exactly what our priorities are. maybe not surprising, by the way. clearly, shareholders are interested and care very much about succession. it is the board's number one priority. they have been spending a significant amount of time on that. we have a succession committee that mark parker, our chairman, chairs, and james gorman, who just joined our board, is on. they met seven times last year. they intend to meet even more this year. they are confident they will choose the right person at the right time, and they have some time to do that, but it, again, they're treating it, you know, as -- with a sense of urgency,

because it is so important. clearly, shareholders care about that, given what the company's been through these last few years, as you would expect. they care about what ends up being our top priority strategic. they want to know about the future of espn, about streaming and how it can be profitable. they care about our films, and they're interested in growing our parks and resorts business, where we said we're going to spend $60 billion over the next 10 years. amazing consistency in terms of subject matter and the list of priorities. >> and all things we're going to talk about in the time to come here, but -- >> but maybe no mistake, though, because you mentioned the 30% a few times. this was decisive in terms of how shareholders voted. as i think a true endorsement of the board and management and the direction we're taking this great company. >> stock went up.

first time he had a proxy fight, the stock went up. it came down when peltz went away. it went up again during this process. he seems to believe he's helpful in terms of getting you guys to focus and/or there would be who say, well, an activist is helping in getting management to focus, and it has a good effect on the stock price. how do you react to that argument? >> let's talk about the stock price. the stock is up over 40% since the beginning of october. there was a slight bump when he announced his interest in basically the second proxy fight. and then, actually, the stock drifted down after that. and then, it went up when we announced our november earnings. >> yeah, i mean -- >> he then mentioned a slate and named a slate. it drifted up slightly, and then went down again, and then we had our february earnings, which were sensational, and it went up significantly. the market is reacting to how this company is performing. it was not reacting, really, to the activist fight. >> and not the idea that you're going to be even stronger in your communications, even more focused in terms of or darticulg

what it is you're trying to do and/or more focused as a result of somebody on your back. >> i came back about 16, 17 months ago, and immediately established a set of -- well, first of all, wanted to stabilize the company, because it had been through a tough time. immediately established a set of strategic priorities with great alignment with the board, actually. and we have been executing against those priorities since early in my second tenure. and i think the results of implementing them -- and we're just at the beginning in many respects, but the results are already being felt in a positive way by the company, and i think it's reflected in our performance, particularly in our november earnings and our february earnings. so, if you're asking me whether this caused us to have any greater sense of urgency about those priorities or any more focus, absolutely not. if anything, it was distracting. it took time when we should be spending our time on those priorities. and one of the things that, you know, i feel great about right

now, today, is, put the victory aside, that i can, you know, spend all of my time with the management team and the board on executing against those priorities, because they're really important. >> i've made the point many times and have in other campaigns as well, it is an enormous distraction, potentially, for management. takes a lot of time. i assume that was the case for you as well. >> it did take a lot of time. i continued to spend a lot of time on those priorities. you have to still watch the films and engage with our businesses on what their strategies are, and execute against them. you can't take your eye off the ball, but another great subject or subject is introduced that it does dilute your time to some extent. >> you got to travel. you got to get in front of shareholders, spend a good amount of time just thinking about it. did it become personal for you? it involved ike perlmutter. you and i have talked about this in the past. there's no love lost between the two of you. was it a personal kind of contest in some way beyond just the proxy contest?

>> look, on my side, no, meaning, i was supporting the interests of the company, not my personal interests and defending what the company and the board was doing as opposed to defending myself against criticism from nelson and the people who are backing him. if you're asking whether it was personal on their side, you probably should ask him. he probably would say no. i think there probably was, to some extent, a degree of personal animus that was on the table here. >> you fired him. he didn't like that. >> well, we closed the marvel offices, and it did result in ike leaving the company, but i'm not going to put words in his mouth at all. i had my -- my opinions about it all, but again, we were

defending the company against the criticism of mr. peltz in this case, and i actually tried not to consider it a personal attack on me, because i didn't think that was really of great benefit to disney. >> but you're a very competitive person, and you wanted to crush them, didn't you? >> i wouldn't put it that way. >> you wouldn't? >> if you're asking me whether i wanted the company to prevail, yes, because you know, i knew exactly what was important to the company. i knew what we were doing, and i was extremely confident. i remain confident and very optimistic about what we're doing. >> right. >> and i just didn't think it was necessary to essentially bring nelson peltz on to the board, nor did the board feel that, given the fact that he didn't bring any new ideas, and he wasn't going to have an impact on the company that we deemed was going to be positive. anything, there was a belief

that it could be a distraction and end up being more destructive than productive. >> i'm curious on that. there had been speculation that were he to have won a seat on the board, you might have accelerated your own departure from the company. is that true? >> he didn't win a seat on the board, and i'm back to where i was before all this happened, which is spending 100% of my time on this company, and i'll just leave it at that. >> it is instructive, though, to think about how you were thinking about things, the fact that it happened. >> it's important for the management team and working very closely with the board to have the ability, that includes the time, to focus on the most important matters. and anything that occurs that takes away from that, that distracts us in some form, is a negative, and so, as i said, his presence on the board, we believe, the board believed, could be distracting, and that might have made it very difficult for us to do our jobs the way they need to be done. >> on succession, which ended up being sort of -- it did,

especially toward the end -- the real focus here, and ism made their decision to recommend peltz for the board. have you changed your approach at all? has the process been accelerated in any way? what updates can you give us beyond the fact that you're focused on it? >> well, the board engaged in a succession process the moment i came back, and they are taking it very, very seriously. i don't think it has changed because of the activism battle at all. they formed a committee right away. they've been meeting regularly. they're going to meet even more regularly going forward, because i'm not going to be here forever -- >> you are another two and a half years, though, right? >> but i think it's really important to name the right person at the right time and to create a transition process that is healthy. >> how long do you see that transition process? >> i can't say. >> is it a year, is it, you know --

>> not determined. >> okay. >> but i think it's really important to have a good transition process. this is a big, complicated company, and not only is it important to choose the right person, but it's really important to give that person all the opportunities in the world to be successful in the job, and the board's very focused on who the person is, and how the handover of sorts will take place. >> how does the failure to have done a successful transition last time inform your own actions this time? well, look, the transition the last time around could not have happened at a worse moment for the company and in the world. covid hit soon after bob chapek was named ceo. i think one of the things that i don't think has been as understood as it should have been over these last few years is what happened to this company during that period of time. probably suffered more than most companies in the world, given the fact that people were not going to the movies.

people were not going to theme parks. initially, live sports were not occurring. and just as important, production wasn't going on. there were no movies or television shows being produced. this company was hit very, very hard, and it handed my successor a set of challenges that were enormous in nature, and hopefully that will not be the case the next time around. i don't think that the -- there's much more i can add in terms of the process itself on the transition. obviously, we all have learned from the past and we're eager for this process to be successful, not just in the choice of my successor but ultimately how that person takes over. >> when you say you've learned from the past, is there anything you can share in particular? >> no, not really. no. >> you spent a lot of time with

chapek. >> this is 2024. that was implemented four years ago. i said that we've learned from it. we're focused on the future, not the past at this point. i think that's also really important. you can't do anything about what happened. you just have to make sure it doesn't happen again. >> we'll talk about the future now, as we always do. let's talk about streaming. continue the long conversation we have had or i remember, i think, in fact, our first -- when you first introduced it, we did our interview. >> 2017? no -- >> was it '17? $6.99. the price point was a long time ago too. but you know, you cut the losses dramatically in the last quarter. you mentioned the stock moving. of course, a lot of it moved on the idea that this business is going to be profitable. and it really will be. you've been talking about it becoming a growth business. you haven't given specifics about what your expectations are on margins, but i'm curious, at

this point now, you mentioned positive things a month ago at a morgan stanley conference. what can you tell us in terms of how things are shaping up for the direct-to-consumer business, which is such an important component of an investor's view of the company. >> it is. first of all, we've done really well in terms of streaming in the sense that we launched disney plus only in 2019, so it's just over four years ago, in a very, very short period of time, we find ourselves second to netflix in terms of global subscribers for a pure streaming business. we know that we ended up losing a lot of money on that, more so than we expected initially. part of that was because we were facing some growth and not as focused as we needed to be on the bottom line. i came back. the losses were around $4 billion a year. it was clear that was not sustainable and not acceptable. and the goal was, first, let's reduce those losses. as we've said, we're going to be profitable in our fiscal fourth

quarter this year. we lost $130 million last quarter. that's a huge, huge improvement, and we know exactly how we delivered that improvement. now, what we have to do is turn it not just into a profitable business, into a growth business. a business that has margins that this company and our shareholders would really be proud of. >> double-digit margins? >> eventually, yes, double-digit margins, of course. the way to do that is actually very, very clear to us. it's very, very clear that we need more engagement in terms of consumers spending time on the platform. we just launched, which is a very compelling product, which is hulu on disney plus that came out of beta last friday, actually. and i can tell you it is doing extremely well. we'll have more to say about that in our next earnings call, but we feel great about the engagement of those disney subs who are not getting hulu, who are now watching more programs that were on hulu, including "shogun," which is a great hit.

we have to increase engagement. we need the technological tools to lower churn, create more stickiness. it's things like recommendation engines, getting to know our customers better. we need to reduce the cost of marketing, of customer acquisition, to get the margins up, obviously. we have to program more smartly, particularly outside the united states, which is to pick the markets where we could really move the needle and program with really strong local programming. we have had some success there. we need more success. password-sharing is something else. in june, we'll be launching our first real foray into password-sharing. >> you will? >> just a few countries and a few markets, but then it will grow significantly with a full rollout in september. >> krarking down on password sharing? >> yes, and all of that, all the things i mentioned are components of what will turn this business into a business -- >> you sound like you're describing what netflix already is. do you ever get to a point where you can actually have margins that netflix has? >> well, i think it's a

little -- it would be a little premature for me to say yes to that. i certainly -- we would certainly be great if we could. we aim, as i said, for this business to be a growth business for the company with margins that our shareholders will feel good about. we know how to run businesses well. high-margin businesses, parks and resorts, a great example of that as a for instance.resorts example of that. i'm confident that we're on the right path, but we still have a lot -- >> you want to be the clear number two, though, to netflix? you already are. you probably don't like me to hear me say number two. that wouldn't be a bad place to be? >> i wouldn't say that's necessarily the goal, but i like -- netflix is the gold standard in streaming. they've done a phenomenal job and a lot of different directions. >> yeah. >> i actually have very, very high regard for what they've accomplished. if we can only accomplish what they have accomplished that would be great. the good news, we know what we have to do and, look, we start with a very strong hand.

we've talked about it with pixar and marvel and lucas film and disney and the array of content. the acquisition of 20th century fox looms large in this process because we get control of hulu, significantly more content, including, you know, family guy and the simpsons and avatar. great talent that came with it as well. a global footprint that is broader and deeper in the number of markets. i think we have the goods and now we've got to execute. >> i mentioned, too, in part and i think of apple and amazon separately, what i wonder, do you think the other streamers can effectively compete? you know, does there need to be more scale in general? would it help you if there was more consolidation among some of the competitors? >> i don't know if it would help. we know what you need to be successful in streaming, and not everybody has that, and i'm not sure everybody can get it. we know we can, given everything i've discussed, given what --

obviously, the content that we have and the tec brands that we have. i don't think everybody does, though. i think there's got to be consolidation of the business. >> i want to talk about the sports venture, but given the bundling you're doing there, is there a time you can imagine a bundling of streaming products, entertainment streaming products, so disney plus is bundled with max, for example, and even with a netflix? is that ever a possibility? >> let's take a step back. you mentioned sports. we are bundling right now with espn plus, but when espn ultimately is launched as a flagship product the full suite of espn services, there will be a great opportunity for a bundle of espn with disney plus and hulu. >> right. >> and a bundle that is consumer friendly, part of. >> understood. >> do you see a day there could be a bundle of competitors in a sense to make it easier for the

consumer in the same way you are bundling sports with warner brothers discovery and fox? >> yes, i think there are possibilities there, sure. >> you do? >> uh-huh. >> on the sports, where do we stand right now -- i know there's an antitrust question, you have a new ceo for it, price hasn't been announced? >> no. we have an idea. we're proceeding as though this is going to clear basically government scrutiny. you mentioned we hired a ceo. they're iterating in terms of what the experience will look like and feel like, and i don't know if we've announced a date yet. >> the fall, right? >> no more specifics on that. >> yeah. >> we feel good about it. we think it's actually a sport's fans delight in terms of watching all the sports in one place. >> do you think any antitrust questions being raised by

competitors? >> we know some are raising the issues. we're proceeding as though we'll prevail. >> price? do we have a sense there? >> too soon. >> i have a sense. >> mid-40s? >> not going to say. >> too soon. >> you keep bringing up espn flagship and i wonder -- i know you're not going to talk price -- why have that anymore? if i as a sport's consumer have access to this joint venture, let's say i'm paying 45 bucks, why am i going to spend another 30 on an espn over-the-top product? i don't understand the -- what that is? >> we haven't gotten specific about how the pricing will work. i think you have to assume that if someone is already buying the joint venture product. >> right. >> they will be taken into account if someone wants to buy so-called flagship. what we're trying to do is basically serve sports fans in multiple ways. sports fans want, who are not

part of current multichannel bundles already or were and basically canceled their subscriptions, that's certainly one way to serve them. if they're not interested in that and they just want espn -- by the way what espn flagship service will have will be success significantly more than what espn component of the joint venture will be. if they like that, they'll be able to get that too. what we're trying to do is serve sports fans in multiple ways and create real convenience, too. >> you don't see it as a reason not to do an espn over-the-top flagship product as you describe it? you talked about potentially as soon as 2025 hitting the market? >> correct. >> the existence of this jv -- do you have a name for the jv. >> no. >> do you have any ideas? >> we have a suggestion box on the disney lot. >> you see them being able to exist both. we talk about when you would take espn over the top and i find myself wondering, with the

existence of this product does it make it less of a need? >> look, espn over the top will have multiple features to it. fantasy sports, the opportunity to bet on sports basically right off the app. there will be significantly more i'll call it consumer engagement, interactive capabilities. it's not the same thing. again, what espn is trying to do is service the sports fan in multiple ways. >> are you still looking for an investor for espn? that was something we discussed at sun valley this summer? the nfl network? >> we're looking for strategic partners. we don't need an investor. >> strategic partner. is that still happening? >> we've had ongoing discussions. nothing more to add. >> feels like it's gone on for a while? >> it's complicated. >> a chance something could happen? >> look, i don't want to predict. we're engaged in conversations. we think if we can reach the right agreement with the right partner, that it's a really

worthy thing to do. >> i want to move on to some other news, because we're already running short on time, you've settled up with florida. is that over and done with? are you happy with the new arrangement there? >> it's still a federal case. over and done not completely. there's still -- >> the free speech case. >> free speech case. but, you know, we view what we did there as really, i mentioned on our annual meeting call the other day, i guess it was just yesterday. >> yeah. >> feels like it was a month ago. we called it win-win. a good thing for the state of florida and for the walt disney company. we settled the matter on a state level, and this gives us an opportunity to engage more effectively and more deeply with the oversight board, which has been reconstituted to some extent, and make the kind of investments we need to make in that business, not only to grow our business but grow in terms of the state of florida and

create nor jobs and revenue for the state of florida. >> so we can expect no more hostilities between governor desantis and the company? >> i hope not. i can't speak for governor desantis in that regard. >> speaking of hostilities, i know you are aware of elon musk and what he's been -- continues to say, or at least post, on his x platform. how do you approach that? somebody who has such a big microphone as musk coming after you all the time? >> i ignore it. >> you do? >> yeah. >> there's no relevance to the walt disney company or to me. >> when he says i would, you know, buy shares if peltz was on the board. >> next subject. >> he's on his anti-woke campaign. >> people have been coming after me and the company for years. i don't get distracted by those things. >> the woke thing has had more of an impact. you said to me you would love to be out of the culture wars. do you feel like you're succeeding in that?

>> well, i think -- yes. i mean, i think the noise is sort of quieted down. i've been preaching this for a long time at the company, before i left and since i came back, that our number one goal is to entertain. i think, look, the term woke is thrown around liberally, no pun intended in that regard. i think a lot of people don't understand really what it means. the bottom line is that infusing messaging as a sort of number one priority in our films and tv shows is not what we're up to. they need to be entertaining. and look, where the disney company can have a positive impact on the world, fostering acceptance and understanding of people of all different types, great. but generally speaking, we need to be entertainment first company. and i've worked really hard to do that. >> you have? >> i have. >> in what way? what do you mean? >> engaging with our executives, engaging with the creative community, returning to our roots, making sure that

everything is aligned with what our priorities are, and understanding we're trying to reach a diverse audience. on one hand in order to do that, the stories you tell have to really reflect the audience that you're trying to reach, but that audience, because they are so diverse, really, first and foremost, they want to be entertained and sometimes they can be turned off by certain things and we have to be more sensitive to the interest of a broad audience. it's not easy. you can't please everybody all the time. >> right. does the prospect of a trump presidency change your approach at all or concern you at all given that may raise the volume yet again on this anti-wokeness? >> the walt disney company is 100 years old. it's -- >> you've worked there more than half of them now. >> i know. that's hard to believe. it's a very special company with, you know, a mission to entertain and a world, let's pause for a moment and understand, the world needs to

be entertained today. i don't know how many presidents have been in office since disney was founded in 1923, nine have been in since i started in 1974. >> pretty extraordinary you're still doing this. >> yes. >> richard nixon was president when i started. >> yeah. that's a long time ago. >> he was almost on his way out. are you good nick wrfor the nex and a years? >> this is a great job. >> hasn't seemed like it lately? >> it's still a great job. i will not lose sight of that. we have a lot to do. i'm excited about a lot of what we're doing. i'm optimistic we're going to accomplish the things we talked about and more. >> you have that confidence at this point? >> i do. >> again, we're still waiting on a lot of the things for you to deliver on, some you already have in terms of buybacks and dividend increases and the likes. >> yes. absolutely. look at the bottom line, delivering $8 billion in free cash flow this fiscal year,

double what we delivered last year, the dividend, buying stock back, investing the right amount of money in the right businesses like our experience businesses which has had tremendous returns. espn is a phenomenal brand. we -- a lot has been said about espn in terms of skepticism about its future and the -- basically the reliance on the old business model. >> yeah. we've talked a lot about it since august of '15. >> friday night espn had a double hitter women's college basketball game. game one iowa versus lsu, highest rated college basketball game ever on espn, men's or women's. that game rated higher than every game of the world series four of the nba finals, the golden globes. i could go on and on. very, very -- that, to me, speaks volumes about espn as a brand and as a business. >> although it's not nearly the contributor it was to the company years ago? >> espn still has -- >> i know it's profitble. >> espn is highly profitable.

the ratings have been up the last couple years the operating income has been up the last couple years. we're engaged in positioning espn for its future but it starts basically with a great foundation. i'm -- how can you be optimistic if you're running the walt disney company? >> my god, just recently with julia you were going through all the things you encountered when they came in. didn't sound like a great list. you want me to quote you? you went on and on. >> these jobs come with, as you can imagine, a lot of challenges and complexity, but i wouldn't trade this job for any other job in the world except no job, i don't know. >> maybe we'll get back to that one day. real quick, one thing i also -- the epic announcement from last quarter in gaming. i did want to get you to weigh in on that. how important do you see that in terms of gaming overall given the time spent and whether you're going to make an even larger commitment down the road? >> soon after i came back, josh demar ro who runs our experience

business and his head of games came to me with basically a demographic analysis of who was playing games and essentially what the trends have been. i was blown away that something like 32% of screen time among young people, meaning gen alpha and geny, gen-z, i'm so old i forget my alphabet, and they were spending as much screen time on that as watching movies and television. when managing a company like this, you have to manage for operational excellence today and prepare the company for the future as well. foot in the present, foot in the future. thinking about the future if we don't engage with those demographics then where are we? it seemed not just of interest, but incredibly important, vital almost, we enter that space more aggressively. we've been licensing and doing well, but haven't really been investing that significantly for a long time. so the opportunity to engage with epic came up because they

have been part of an incubator program or accelerated program at disney some time back, we had a relationship with them already, a lot of disney goods were sold on fortnite and i had a lunch with tim sweeney i think in june who founded epic and we started talking about what was possible and over lunch designed the disney universe that could live next to fortnite and engaged and announced something in november which we were really excited about, including an equity investment, modest, in epic, and look, could it expand? possibly. right now our goal is create the universe that's going to live next to fortnite and make sure that's successful and if it is and hopefully it will be, look to see where we can invest further beyond that. >> we're out of time. but i look forward to future conversations. >> nice to see you, david. >> nice to see you as well. thank you for having us. >> pleasure. >> carl, back to you. >> great stuff. david faber at disney hq. welcome to another hour of

"squawk on the street." i'm carl quintanilla with mike santoli. david will come back in just a moment as he wraps up with iger. . in the meantime 1% gains at the opening bell. all sectors green. 10-year back to 4.32. the real news is all we got from bob iger. mike, talk about the activism, peltz, succession, profitability, even some concerns the cultural friction disney has been under. >> yeah. you know, you would sum up the message i think we got out of iger he said it a couple times, we know what we need to do. in other words, the strategy that was in place that has been under way is the one they're going to pursue maybe with more urgency than before. some of the things that the company knows it needs to do, sound like they're simple. the cost cutting, getting the cost footprint of streaming down, streaming profitability is one thing, increasing engagement with streaming customers direct to consumer kind of get that stickier easier said than done but you have to do it.

it's worth remembering that they're talking about getting free cash flow basically to precovid peak levels, like fiscal 2018 number, but at the same time, right now, theme parks, experiences, are two-thirds of operating income at this company. that's a good or bad. that means you're reliant on the area that will not go fast. on the other hand, upside to the rest of the business coming around, the entertainment side coming around, box office, things like that. the stock, it's rebuilt its premium to the market. we're talking about 24 times earnings where disney would have traded back in the precovid days before it really became kind of, you know, essentially treated as a stay-at-home winner. >> david asked iger about margins in that business, whether or not -- how close they can get to the standards that netflix has set. he said that would be fabulous if we could. >> yes. >> but it's going to be interesting to see how disney acts as an echo to things netflix has done, the password sharing foray.

>> password sharing, being aggressive on pricing, they've done some of that at this point. they're in the process of rebundling hulu into the offerings. it's worth remembering that netflix didn't get to netflix margins until many years and a lot of scale was built. it didn't just happen. when they were at 40 million subs, they weren't profitable. you have to keep kind of getting toward that peak number and get the assembly line going, i guess. it's different than bolting it on to really two legacy movie studios and the tv operation. >> although as he did say with the fox properties, simpsons, avatar, we have the goods, as he said. >> exactly. >> you're back. thoughts and i guess prioritize some of the silos that you got too? >> yeah. it's funny you mentioned fox. bob is always -- he is consistently defending that deal as you well know. it's come under fire not just from activists or any number of others that said they paid too much. he's always coming back to the

idea of the value that was created there, and how it really has armed them for this appropriately for this race for the competition in streaming. i mean, listen, in an interview like that you always try to hit as much as you can in the time that we have. it's always funny to me, we never get to parks because i guess things are okay there. yet, mike, it in manyways is the engine for the overall company, and certainly in terms of cash flow? >> it for sure is. it's the engine right now. the company is also being pretty aggressive about

>> in part with the limited time it's something we have a lot of time on. didn't the question to creatives as well where iger is spending an enormous achlts time trying to retool things when it comes to the movies. let's get reaction to bob iger's comments and the end of the proxy fight. michael nathanson. i'm curious to get your take, if anything in part stood out to you? iger said many things in different ways before but there's always different things in there. >> thanks for having me on. >> i go back to the interview you lhad in sun valley and this interview. this is the iger we expected when he came back. optimistic. really talking positively about the assets he has versus what he wants to dispose of. i thought, when i listened to it, people don't realize the damage that covid and the pandemic did to disney and then the change of leadership during

that time. i thought it was a really helpful conversation about not what he inherited, but just the world that he has to deal with. to me, it feels like finally they're on the right foot with i dw dent fiing their prioritying and what they're going to do to fix those. we were surprised by how slowly, you know, the change happened in 2023. >> yeah. it's interesting you point out that contrast because in sun valley in july when we did sit down -- that was our last interview i believe -- he was, you know, again, the headlines were it's worse than i ever even expected. that was not the tone today. on streaming, which, of course, is so important for the investors that listen and follow you, what are your expectations? can they get to that double digit margins? q. will it be a growth business? do you feel more confident based on what you heard?

>> i do feel more confident about it. they were running two separate businesses with disney plus and hulu. they needed to put them together. you heard positives about what he's seeing from the first week of change. i think hugh johnston coming in was a positive on the cfo side. i don't know if they'll get to netflix margins, but we think mid-teens margins in two or three years is possible. that's why the stock has reacted, people feel confident they can get there and the earnings power of the company will pick up. >> yeah. i mean, i guess it was that last quarter in particular that gave people some of that confidence. what -- you know, i am curious to come to you on this sort of overall question, obviously, iger says no, there was no focussing that came as a result of having an activist. what are your thoughts when it comes to that? does it help focus people in some way, and/or perhaps improve performance? >> all i can see is the time before peltz showed up and you showed up as a cfo, they were

slow on the messaging of cost cutting, margin targets. i have to believe that the heat from the activist side pushed disney to move with more urgency as they said on the last call. that has to be the case, because you see what they've done in the past six months and, you know, but i do think bringing in hugh johnston was a big change of tone, and the activism has to have helped get the right person in that job to push this company forward. >> although, michael, david got to this point, this balance between to what degree activism created urgency, got religion within the company, or acted as a distraction away from the day-to-day tactical duties. take a listen to this. >> whether this caused us to have any greater sense of urgency about those priorities or any more focus? absolutely not. if anything, it was distracting. it took time, when we should be spending our time on those

priorities, and one of the things that, you know, i feel great about right now today, is put the victory aside, that i can spend all of my time with the management team and board on executing against those priorities because they're really important. >> michael, your thoughts about that argument? >> i have to take bob at his word how much time he spent on it. i'll take him at his word. one of the side benefits they've been on the road talking to their investors and you can see what's happened. the stock has taken off as they've met with shareholders and new shareholders. maybe there's a silver lining here which is the street and the investor base is behind the company more than it's been in the past three or four years because of the conversations they've had. i take bob at his word. now he's happy to be back with his leadership team thinking about strategy and management. i know from talking to investor relations, they have spent a ton of time on this, and in their words it's been a distraction.

>> michael, the question from here, as you talk to investors who now maybe have re-engaged with the longer term story as disney is presenting it, what are they expecting in terms of the next signpost? it seems like the cost cuts are baked into the case for the stock right now. i mean, what are we expecting out of box office? there's a game plan that iger has executed over the decades of shrink the cost footprint in broadcast or linear and then on the studio side go for franchise more, higher hit rate stuff. i wonder what you think investors really expect? >> it's a good question. when bob first got there i remember being neutral on the stock a long time ago, and the content cycle turned and quarter after quarter when their movies started to work and the tv shows started to work, they crushed numbers. what people are counting on is, you cannot have a worse '23 in terms of the box office. they're optimistic about their slate going forward.

you have the films potentially becoming a bigger driver and then you have the integration of hulu, disney plus and maybe more content on hulu hitting and disney plus hitting. you're right. the cost cuts are known. what they've done on strategy is known. the biggest change was changing the structure of a company when bob came back and giving power back to the creative silos. that's to come and that's what always gets disney moving is that creative content cycle and the industry has a hard time managing and modelling that cycle. that's, to me, why this valuation makes sense to be positive about it. you've not seen any content cycle hit yet and it's going to take time. they're doing all the right things to getback to where they should get back to. >> mike, we'll end on the broader questions we take up when we talk, which is the overall streaming landscape. i tried to get iger to address it directly. he didn't really. but assuming disney plus in some form, obviously, becomes one of

the de facto leaders, what about all the others out there, including our own parent company? what do you think -- i had some reporting on paramount in the last hour. what's going to happen? >> david, it's the question because there's too much capital invested in streaming. i think we are at the precipes to use bob's phrases of capital leaving the streaming world. there has to be consolidation. we'll see what happens with paramount plus, whoever owns it after the next couple months. they have to pull back from paramount plus. i think wbd and hbo max will rethink their strategy, perhaps looking to find a partnership there. peacock too. so, you know, what drove us to become more positive on disney was the idea that competition is less in main streaming and to your question of bob, disney could be -- is a number two player now, and should be a healthier business. you need consolidation and i think we are at the beginning of that change because there's been such a tough business to invest in. that's one of the things. the sector is getting less

competitive, which is only good for the people who are the endemic competitors. >> michael, always appreciate it. thank you. >> thanks, david. thanks, carl. david, we'll talk in a bit. david faber in burbank. three bigmovers we're watching. shares of hub spot rallying right now on reports alphabet has been talking to its advisors about the possibility of making an offer for the online marketing software company. shares of levi soaring and raising its full year profit guidance. conagra one of the biggest gainers surging on q3 earnings and revenue beat. don't miss the ceo with jim later tonight on "mad money" at 6:00 p.m. eastern time. dow holding on to gains of 160. big show still ahead on "squawk on the street." trading at schwab is now powered by ameritrade, giving traders even more ways to sharpen their skills with tailored education.

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the go-tos that keep us going. the places we cheer. and check in. they all choose the advanced network solutions and round the clock partnership from comcast business. see why comcast business powers more small businesses than anyone else. get started for $49.99 a month plus ask how to get up to an $800 prepaid card. don't wait- call today. levi. welcome back to "squawk on the street." stocks rebounding here a bit. dow up 150 after a rough couple days into q2. our next guest believes the s&p is vulnerable to a pullback. let's bring in piper sandly chief strategist michael can toe witz. good morning. >> good morning. >> year end looking at 5250. i wonder what it would take to start thinking about upward revisions? >>ing that that brings down bond yields, period. and i think there are data that

could continue to do that. look at what claims did today to bonds and stocks. just a small 20,000 increase in claims, we'll see what happens tomorrow with the unemployment rate. as we see it the labor data is going to continue to grind at a soften -- continue to soften and provide the fed and investors continue to believe the fed will cut rates two or three times this year and i think markets will go up on that. >> nothing from powell yesterday to dissuade anyone of that notion? >> doesn't seem like it. seems asymmetric and seems bent on getting the three rate cuts in. the risk to that is if commodities and the economy sharply reaccelerate, we've seen a little bit of that year to date but i don't think it's a big enough problem to offset some of the more disinflationary forces we're seeing on the services side of the economy. >> it's interesting, because, you know, i think there's typically a pretty narrow window when softer economic numbers can

benefit markets. it's when you're kind of trying to fine tune the timing of a policy easing move. i wonder how you read maybe there's fatigue on the consumer side of the economy and pockets. you see people getting excited about the ism manufacturing numbers go back into positive territory after a couple years when we decided that's not really telling us what the underlying economy is doing. are we seeing a shift to the production side of the economy? how do you reed this? >> the psychology of investors has shifted for the third time in 60 years. interest rates in stock prices being negatively correlated for the last couple years. we haven't had that backdrop since the 1990s, what we had throughout the 70s and 80s as well. the irony here is typically pmi is going back above 50, we would be raging bulls, recommending small cap, risk on strategies, but here's an interesting stat.

the prices paid index, which everyone focuses on, they never did two years ago, the correlation between the prices paid index and the ism index is about 90%. so you can't really expect to see higher pmis and better growth without seeing a side of inflation, and, therefore, higher bond yields. it takes the momentum and excitement out of the equity market in my opinion. if we continue to see higher pmis and oil and interests. you're not going to see the typical playbook play out. >> looking through the list of stocks that are ranked as attractive in your macro select model, we can go through a few here, schwab, valero and others, but what strings run through them or what do they have in common? >> we've been on the high quality bandwagon for nearly two years now, and we define quality as companies with high cash flow profitability, realized earnings growth, companies that are

seeing earnings revisions beating their peers and companies with high free cash flow leads. quality at a reasonable price. a play on g.a.r.p. it's that collection of fundamental attributes that has been the core of our long model and the first quarter one of the best performances of our model since we've been running it in 2018. that's the commonalty. it's not about picking sectors. it's about picking stocks within sectors that have those attributes. >> gave viewers a peek at some of the names. interesting, and as you point out, a lot will depend on the data to come tomorrow. good to see you. >> thank you. quick note as we go to break, the treasury secretary janet yellen arriving in guanjo. sara eisen will sit down with her in beijing. coverage will begin here at 5:00 a.m. eastern time. dow is up 140.

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franchise cities of success looking at strong examples of urban economic renewal in this country highlighting the powerhouses in business and culture. our latest episode is about denver and boulder, colorado. take a listen. in the foothills of the rockies two cities rise above the rest. an economic boom so powerful, denver and boulder are transformed. >> this whole area was abandoned and it's ground zero now for the economic growth. >> reporter: denver full of skyscrapers and new development. >> denver is going through the next great urban renewal. >> reporter: boulder's gdp has grown by 23% over five years, an increase of more than $6 billion. >> you would be shocked how much funding is going into the ecosystem. >> reporter: big investment launches two cities towards a high-tech future. >> it's exciting tech startups choose the denver-boulder area. >> reporter: from the aerospace industry that skyrocketed 88%

over the past two decades -- >> aerospace has become a fulcrum of our whole economy now. >> reporter: to an unprecedented crisis that brought 40,000 migrants to town. >> could you have imagined that number? >> much higher than we thought. >> reporter: housing prices that are higher too. >> the thing that keeps me wake is the housing costs. >> reporter: two cities facing challenges they've never seen before while entrepreneurs, leaders, and dreamers all look to the future to rise even higher. >> and you can catch the full episode on cnbc a week from today, next thursday, 10:00 p.m. eastern time. really interesting example, mike, of economic diversification away from things like energy and aerospace. there have. bob pis been challenges, homelessness and migrant issues at play. that's the play modern urban life is handling weird

curveballs. >> essentially now just a continuous economic block denver to boulder? it seems a little bit of a new twin cities. >> the highway 36 connects denver and boulder. >> right. >> used to be you drive and there could be two separate cities. the fill-in as big employers and google and vc, life sciences and tech have made that one giant metro area. why we had to pair them. anyway we look forward to that a week from tonight, thursday. we're watching disney as well after winning that proxy fight with activist investor nelson peltz and in a few moments, we are going to speak exclusively with peltz about what's next for him and trian in a minute.

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that's kinda my thing. get the real deal with xfinity internet today, and get fast speeds and a reliable connection to all your devices in the home —even when everyone is online. welcome back to "squawk on the street." i'm bertha coombs with your cnbc news update. the israeli military has called off all leaves and time off for all combat units.

there are growing fears of an escalation with iran following an attack this week on tehran's consulate in syria that killed a number of senior military commanders. four people died in a russian attack on two apartment buildings and a power plant in ukraine's second largest city. the drone strike also cut off power for around 350,000 people according to local officials. the attack comes as the kremlin escalates its bombardment of urban areas ahead of an expected large-scale russian offensive this summer. and a new freight rail route built to ease disruptions from the baltimore bridge collapse completed its first shipments. csx announced the new line days ago allowing baltimore bound containers that had been diverted to new york and new jersey to be unloaded back in baltimore. amazing how they can do that in such quick time. carl, back to you. >> imagine the work that has

gone into that. thank you. we continue to watch disney this morning, just south of 120 here after winning the proxy fight with activist investor nelson peltz. david faber spoke exclusively with bob iger in the past hour about the stock price during the proxy fight. >> the stock is up over 40% since the beginning of october. there was a slight bump when he announced his interest in basically the second proxy fight, and then actually the stock drifted down after that and then went up when we announced our november earnings. >> yeah. >> he mentioned a slate, named a slate, drifted up slightly and went down again and then we had our february earnings which were sensational and went up significantly. the market is reacting to how this company is performing. it was not reacting really to the activist fight. >> and coming up in a few moments we will speak exclusively with peltz about what's coming up next for him and for trian. one of these things apparently

we have done pretty well pairing two points of view. >> no doubt about it. i did find it amusing bob iger had granular understanding of the cadence of the stock price moves since early october, and i guess the argument could be what did you load into the earnings reports that did impress the street and a higher sense of urgency, accelerate the cost cuts, free cash flow target out there. all that happened in the context of a little bit of -- we'll see. we watch the fed for clues on rate cuts in 2024. steve liesman is monitoring a very busy day of fed speak. steve? >> hey, mike, thanks. philly fed president harker becoming the latest official to complain that inflation is still too high, but not saying much else on monetary policy, but hold on because there are four more fed speakers speaking on the outlook this afternoon and this morning including barkin, goolsbee, kashkari and mester. several themes have emerged in the fed speak this week. 17 of 19 have forecasted at least one cut this year with the

meeting of three. these cuts are forecast, not promised, with most saying something like it's likely appropriate to ease some time this year. notice no time there. cuts are data dependent with several couching their forecast with the phrase "if if the economy evolves as expected" for most is confidence in declining inflation, but there is no particular rush we keep hearing with several saying policy is well positioned for whatever comes next. we have time, some have said. officials have started to speak about the speed of the decline in inflation as the key to when and how much they reduce rates faster or sooner. cuts could be linked to a quicker and deeper decline in inflation or unexpected weakening of the economy. note that fed does not seem at this time to be concerned about a stronger economy. that could change. all of this linked to the jobs report tomorrow where the fed is hoping for some slowing, though it's increasingly pointing to

immigration as a force boosting the labor force. a number around 100,000. like we start to raise some questions about whether the job market is weakening faster than fed officials believe. 200 k the consensus a goldilocks number, and then think about a number north of 275 causing concern the job market remains too tight and wage inflation a threat. the fed's language and the uncertainty about the economic outlook for jobs growth and inflation that's why the june rate cut probability is so volatile. now hovering around 63%. had been as low as 53. what i would say is remarkable is how little space seems to exist between trump and the biden appointees to the fed governor and hawks and doves. mike? >> steve, fascinating and great discussion this morning on "squawk on the street" about the piece which mike and i watched about the clash between the vibe and data. steve liesman. after the break another cnbc exclusive, trian's nelson peltz

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. it is a pivotal day for disney. the company's battle with nelson peltz is set to conclude. >> should not be worse than the disease and iger's record is better than peltz's. >> probably the single biggest reason peltz and trian will not win this fight, is that you have some pretty happy shareholders out there.

>> they lost. sorry, nelson, in fact, the entire board of disney has been re-elected by what they're calling a substantial margin. it is a victory for disney. >> i was supporting the interest of the company, not my personal interests, and defending what the company and the board was doing, as opposed to defending myself against criticism from nelson and the people who are backing him. >> in the wake of faber's interview, jim cramer is back on set with us with another special guest. >> thank you so much. we've got activist investor or i think constructivist investor nelson peltz with us. you listened to the interview. are you a happy or selling shareholder for you trian? >> jim, before we get started, i want to say thank you to a few people. i want to thank you to all the

shareholders who voted for it. i want to thank my family and my beautiful wife claudia for putting up with me through all of these campaigns. i try to do the right thing. i try and help companies do the right thing, and i'm not going to quit doing it. what did you ask me? >> i did ask me whether you are happy with what the events are in terms of the stock price and will trian or if you can speak for ike, stay long in the stock, given the fact that there are changes put through, or is this the end of the campaign and time to ring the register and move on? >> well, first of all, i'm not going to discuss whether we're buyers or sellers here. i hope this is not a redo of last year, where we pulled out, gave management a chance, and the stock went down from roughly

120, down to 79. i hope that doesn't happen this time. whether we stay or not, we don't make those kind of announcements. i hope bob can keep his promises. i hope they can do all the things they assured us they were going to do. and we'll only watch and wait. if they do it, they won't hear from me again. if they don't, jim, you may be seeing me on your show next year doing this same thing again. it's really up to management. it's up to the board. as it up to whether they do what they say they are going to do or if it's going to be the same old story again. they've got to get a succession plan finally in place that works, okay. we haven't seen one going back to 2011. they began talking about succession with 13 years and

they haven't come up with anything. they have to get the margins up. they have to get streaming right. they made a lot of promises, and frankly, as a shareholder, i hope they keep them. >> well, okay, so -- >> if not, we're here. >> in restore the magic, your document, you say disney claims that it has, and i quote, "turned the corner and entered a new era" and you said it rings hollow for you. any change, does it ring less hollow given the fact that bob iger came on with david faber and talked about changes that have been made already? >> look, i'm willing to give them the opportunity to prove me wrong. i'm willing to give them the opportunity to do as they say. the shareholders have voted. they want to give management and the board a chance. so be it. we will watch. like we did last time. we pulled out a year ago february. a lot of promises were made.

we hoped that they were going to keep them. they didn't. we came back. we've got a new set of promises, and i hope they keep them. ifthey do, i'll be a guest on your show probably talking about a different company. >> well that -- >> if they don't, you'll see me again, jim. >> fair enough. any company in mind, whether it's a different company? you have me thinking about -- i know -- like to think forward. anyone disappointing you that you think they might look at? >> i know, jim. jim, i have to finish buying that stock before i can tell you who it is. >> it's a mystery there. talk about an article in the journal which says nelson peltz's disney consolation prize, $300 million gain in a recent ft piece, the ft says peltz likes to say he would rather be rich than right. were you rich and don't care about being right, given the $300 million consolation prize? >> well, first of all, the

number is wrong. >> okay. >> the number is dramatically wrong. >> billion? >> better than that, jim. >> how about $1 billion? >> and that sounds more like it. the fact is that we have an obligation to our investors and we have to make returns for our investors. once we get on a board, that obligation moves to the board. until we get on a board, we have to do what's right for our investors and i think we've done right for them in terms of our investment in disney. that's what i say. bob has to take it from here. >> did you, after getting iss, were you surprised, meaning you had a proxy adviser say you were the guy that should be on, were you surprised some of the index funds voted against you? >> i was very surprised at that,

and one has to understand why they voted against me. if you look at their comments, their comments were beautiful. they're very complimentary. but at the end of the day, they checked the box and you'll have to ask them why they did it. i've got my feelings, but i'm not going to talk about it here on television, but you should ask them. i was very disappointed to say the least, after the beautiful comments and good meetings we had with them, they decided to vote against us. >> i want to be sure about this. in other words, you met with some of the index funds -- there's only a couple very large ones -- did they say they would vote for you and change their mind? >> they didn't say that. they didn't say that -- they won't tell you whether they're going to vote for you when you meet with them, but they were very -- seemed very happy with our meeting, seemed very positive about the answers we gave them, and, you know --

look, i had 93 engagements, my people tell me, in this disney proxy fight, 93. you walk out of the room and you say, that was a good one or that wasn't so good. we missed a couple of points. and state street didn't vote for anybody. they basically abstained. >> one of the disputes -- there are a lot of people feel this

very personal. you never were seeking bob iger to leave the board. you did feel that there were some board members that were not as strong. people seemed to think you had a dramatic loss against everyone. i don't think that's necessarily fair. i think if there had been some index funds that had gone with you, there would be some board members who were out. >> jim, you're 100% right. i had no issue with bob. there was a point in time that bob and i used to meet socially, there was a point in time when bob asked me to talk to his board, which i did. after the fox acquisition and where i thought the streaming business was going. and i did address them. i gather they had guestspeakers in at every board meeting. so, that -- i had no issue with bob. the only issue i had with bob was the succession plan, which, again, is at the feet of the board, not with management.

my issue in this fight was with the board. they're always trying to personalize these things, make it into something more dramatic, making it into something it wasn't. my issue was with the board. i don't believe the board was doing their job. that's the problem here. if they did, then they would have had a succession plan that works. they didn't. and that's -- that's basically the proof in the puding. >> did it bother you there was very little repenting? i did not hear bob iger say, i personally recommended bob chapek. bob chapek did not do a good job. the board regrets they picked chapek. we didn't handle ourselves well. would that have mattered to you or is that malice toward none, charity toward all, lincolnian analysis i'm offering?

>> jim, that would have been factual, because what we've been told, on very good sources, that chapek never even had an interview with the board directly. now, i've been on lots of boards where we've had succession, and let me tell you, there are lots of small meetings between directors and the candidate. lots of them. and the fact is, i had one where the candidate wound up to be ceo and i loved the guy and we're still friends. but the fact is i couldn't vote for him because i only had one dinner with him four months before the vote. with two other directors. and i said, i need more time. so the board gave me more time to be with him. i came back and was thrilled. but i was doing my job as a director. i don't think any of those directors did that. they all took bob's word and they voted chapek in.

that's not what the responsibility of a director is. bottom line. >> understood. now, let's talk money. there would have been a way to make shareholders a little richer, which is just to say, you know, here's one guy that's been around, knows a lot about business. board members, i'm not looking for a board member to tell you about the movie site. you weren't either. you wanted success. you wanted people who had a process. you wanted a board that was not yes people because those people are actually quite good, as you told me. why didn't that matter? i don't understand why it didn't come down to the idea that, you know what, let's just let him on and not spend all these millions trying to stop him? >> jim, you're 100% right, okay? but you know what gets into the way of boards and management. it's that awful three-letter

word called ego. and when you get ego out of the room, great decisions are made. when you let it come in the room and dominate, you really have big issues. and ego became a very big part of this proxy contest. if it wasn't, there would not have been a proxy contest. there is no doubt that jay rasulo and i were much more capable of being positive directors on this board than some of the other people there. no question. but the ego in the room didn't allow for it. and you've seen that over and over again, as i have. and once people get ego in check, good things happen. and i want to tell you, david taylor at png, who they fought me tooth and nail, david taylor never allowed his ego to get the best of him and he and i wound up to be great friends.

the company did phenomenally well. it went from the 70s to 160 while i was there. and while he was ceo. so let me tell you, the ego is the issue. >> well, when they spoke to david taylor or to the chairman, who was initially against you and then told me, you know what, that you were valuable, did they not get a sense that maybe you would be valuable here, even though you weren't necessarily the guy who understood prell. you understood process, business units, how to make people accoun accountability. that's what it was about. that's what proctor was about. when they spoke to taylor, did they not get that sense that you could help them? >> let me tell you something, they don't want to hear what they don't want to hear. we gave them so many people to interview. people who were against us coming on boards. and then let them talk to them.

call them up. we gave them dozens of people. you know how many people they called? none. >> they're very busy. >> that's what they did. >> they're busy people now. i know those people. very, very busy. they're super busy. >> that's why they couldn't interview chapek. >> what is jay going to do, jay rasulo? i mean, is he -- i thought -- >> jay is -- jay has become my great buddy. jay and i are going to work together again at some point in time. i think the world of him. i really got to know him up close as we went through this process. and he's a star. he is really smart. he understands this business and he understands business. and i can't thank him enough for being at my side as we went through this. and disney would be so smart if

they used jay even as an adviser. he's got so much to give. but it's that three-letter word, jim, that stops him from doing it. >> well, is that three-letter word this ceo the biggest three-letter word you've heard, which is ego? look, you hang around with -- with elon musk, who i know is against iger. could you do a little ego comparison? >> can i tell you something, elon is a friend of mine. i think the world of him. this guy has no ego. okay? that may be hard for you to believe. but having spent the amount of time i have with elon, he is willing to listen to anybody. has the same attitude we do, that we'll steal any good idea and be proud of it, but his ideas are beyond anything i've ever seen in my whole life. he's a brilliant guy.

understands so many things about the world. and all you want to do is listen to a lot of what he's got to say. but he's a good listener as well. and the really smart people in the world are good listeners. >> last night on "last call," yale professor said you're finished, that's it. care to dispute jeff sonnenfield, or even comment on it? >> i do not even know how to pronounce his name. >> i think that's pretty definitive, frankly. nelson, look, i'm thrilled you came on. i think as a shareholder for my charitable trust, i hope the corner has been turned and i understand exactly how you feel in terms of trying to make changes at disney. thank you, nelson peltz, for coming on "squawk on the street." carl? >> jim, thanks for having me. >> absolutely. my pleasure. >> thanks to you for coming

back. we'll see you tonight on "mad money." we'll take a quick break as we watch stocks pretty steady. dow up 168. actually, we will not take a break. i'm here at post 9 with courtney reagan as "money movers" gets started. jim with peltz, and i think we're going back to david in burbank with some reflections. >> i'm not -- is the proxy fight actually over? it doesn't feel like it, does it, carl? >> it doesn't. it really kind of doesn't after all of that. >> no. it sounds like he may hang around. who knows. i can't imagine we're going to go through this a third time. obviously, i thought it was very interesting when it's all about performance. he wouldn't tell jim whether or not he's going to sell down any shares at trian. as jim point out, as we have many times, most of the trian stake here was perlmutter's, whis been a long-term shareholder.

we heard from iger