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Comment by rurp | Hacker News Reader

Wow. I have a low opinion of ABC as I said in another post, but this level of pettiness is still surprising to me.

It’s basically a fuck you to the shareholders. Hey we’ve got this dead asset someone will pay for but we won’t sell because they were mean to us.

Any exec who operates that way should be shown the door ASAP as they are likely doing similar emotional management of other aspects of the business.

If they feel it's damaging to have it public, then it could be argued that selling it would be irresponsible. I'm not arguing it is or it isn't, but reputation has value and management of it is part of what shareholders expect.

But this isn’t reputation management. This is retribution for past affronts. This action in no way retroactively protects them from what was said.

I think he's just saying the case they would make to avoid being sued for breaching their fiduciary responsibility. Not that it's the actual reason. But Idk.

It's hard to imagine how it could be damaging to ABC to have it public under someone else's brand.

ABC's shareholders are Disney. Whatever Nate offered them isn't even a rounding error in Disney's $36 billion dollars in profits last year. The shareholders aren't going to care.

It's not that a shareholder won't care, but that the modern US company is such a large basket of businesses, it's impossible to put any pressure on a random business unit throwing money away. So, in practice, there's very little pressure to do things right, and a lot of pressure to do what your boss prefers, whether it actually helps the company's profitability or not. There can be negatives if you are doing massive damage to the company's image, but even then, ABC has done more than a little bit of that over the last couple of years to no ill effects. Just ask Kimmel.

>impossible to put any pressure on a random business unit throwing money away ... very little pressure to do things right ... pressure to do what your boss prefers, whether it [helps] profitability

This is frustrating as a consumer. Any further insight, on the solution side?

Disney's 2025 profit was $12B:

https://www.macrotrends.net/stocks/charts/DIS/disney/net-inc...

So what amount of profits insulates you from lack of fiduciary responsibility?

"It's okay set millions of dollars on fire because we have billions in this pile over here!"

No, what insulates them from fiduciary responsibility is the fact that there is no fiduciary responsibility to shareholders. I’ll say that again: members and/or managers of an LLC, and officers and directors of a corporation owe no fiduciary responsibility to the shareholders to make them money. The fiduciary duties owed under US law are as follows: 1) the duty to be informed; 2) the duty not to usurp corporate opportunities.

As far as I can tell the fiduciary duty to make money for the shareholders is something that Jack Welsh of GE said enough times that people remembered it. However, I’m always interested in additional details concerning the history of this meme, and happy to learn more.

(The first person to observe that an LLC has no shareholders gets a lawyer high five).

This is true in some states, like Texas; but not in Delaware where Disney is incorporated and where directors and officers owe fiduciary duties of care and loyalty to both the corporation and the shareholders.

(Not legal advice. I'm not licensed in either state.)

You are correct to note that there are two fiduciary duties: the duty of care, and the duty of loyalty. However, you are incorrect to imply I stated the law incorrectly.

The duty of care is otherwise known as the duty to be informed. And the duty of loyalty is otherwise known as the duty not to usurp corporate opportunities. I stated the law in Delaware, which is consistent with the law on the rest of the United States on these points.

You and I simply use two different sets of words to describe the only two fiduciary duties of an officer.

None of those mean "duty to make money for the shareholders" though.

The concept of fiduciary duty is an economic professors fantasy. When the shareholders of WB voted against David Zaslovs extraordinary 800m pay package the board ignored it. That's the "owners" voting to not give a crazy gift to the guy who was CEO for like 3 years and incredibly well paid.

Accuracy is important. Thank you for the correction.

$12B profit is obscenely large.

Is it? What is the reason to assume an arbitrary number of a currency is "obscene", without taking into account changes in purchasing power of the currency, number of employees, number of customers, amount of expenses, volatility of the business, time horizon of investment, and myriad other factors?

The size of it concentrated in one place.

What does one place mean? Disney sells access to media and entertainment all over the world, to billions of people.

Regardless, a single metric is almost never sufficient to provide a well rounded analysis of anything.

I suspect you'll be able to figure it out if you thunk for a moment! When we're talking about the profits of one corporation, what do you think it might mean when someone says the profits go to "one place"?

I know it can be confusing that many places exist and that the corporation has multiple customers.

> shareholders are Disney

Who's shareholders are the public.

> The shareholders aren't going to care

This is not a valid defense in court. You can't let "attitude of investors" override "sound financial decisionmaking."

I'm not defending them or this behaviour but it sounds to me like they may think the message/threat this sends to silence future criticism from other people, outweighs the immediate sum.

(Internally I'm sure they could probably phrase it some other less negative way such as chance of people confusing the brand as still owned by them, etc) association

Hence my point of “if they’re doing this, they are likely making other emotional, anti-shareholder decisions”

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