Walt Disney (DIS) – Get Walt Disney Company Report CEO Bob Chapek found himself in a position few leaders of massive companies that must appeal to a broad audience ever want to find themselves in. He had to either take a political stand against Florida Gov. Ron DeSantis’ “Don’t Say Gay” bill, which limits the ability for LGBTQ issues to even be acknowledged in schools, or not take one.
That’s an impossible position for a company that wants to be loved by everyone. Disney has not been shy about its support for its LGBTQ employees and it has welcomed that community to its Florida resorts. Disney has also made donations in Florida on both sides of the aisle and generally tried to have its cakes and eat it too.
DeSantis has made that impossible. Chapek tried to stay out of the fray but the inflammatory nature of the legislation led to Disney’s employees forcing their CEO to take a stand.
“I know that many are upset that we did not speak out against the bill,” Chapek said during the company’s annual shareholder meeting. “We were opposed to the bill from the outset, but we chose not to take a public position on it because we thought we could be more effective working behind the scenes, engaging directly with lawmakers on both sides of the aisle.”
He had to do it, but Chapek (and DeSantis) knew that doing so would put Disney front and center in the so-called “culture wars.”
DeSantis Punishes Disney (Sort of, Not Really)
As you might have noticed, the United States has become very divided politically. Taking a stand against Disney for being “woke,” isn’t that different from Democrats taking on Big Oil or tobacco companies. The goal is to create an enemy so voters who agree with you can see you as a hero. You can’t demonize DeSantis for doing it without acknowledging that Bernie Sanders and other left-leaning politicians have used the same tactics.
To “take on” Disney, DeSantis and the heavily Republican Florida legislature voted to revoke Disney World’s designation as a special tax district. Basically, the special zone known as the Reedy Creek Improvement District (RCID) allowed Disney to essentially regulate its 25,000-acre property.
It also forced Disney to carry the costs associated with that meaning that the Mouse House paid for things like paramedics and firefighters. If the district actually gets abolished in June 2023 (which is very unlikely given the actual power Florida’s legislature holds) it means that the cost of those services would now be carried by the state’s taxpayers.
If the RCID actually got abolished, it would cost Florida somewhere between $1 billion and $2 billion a year. Yes, some of that money could be recouped in taxes, but it’s a big bill and a massive organization that would have to be built to provide health and safety as well as utility services for the massive Walt Disney World property.
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DeSantis likely knows that will never actually happen and actually dissolving the RDIC was almost certainly not his actual intent.
What Is Ron DeSantis Doing with Disney?
The legislation also casts thousands of jobs into peril (sort of) but Theme Park Insider’s Robert Niles does not expect that to happen
“There’s zero chance that Florida’s action results in the permanent elimination of the RCID,” he wrote. “Disney will have full public safety protection in June 2023 and onwards and should be able to continue normal operations without interruption. This legislation is political theater, designed to create an illusion of DeSantis punishing The Walt Disney Company without inflicting any real financial damage upon Disney.”
Niles, who has covered Disney for decades, noted that the company would likely save money if it did not have to operate the RCID. He pointed out that if the special district were actually abolished (which is likely not something the state legislature actually has power to do) “Disney could save up to a reported $100+ million a year in taxes that it pays to the RCID.”
Disney, he added, “already pays property taxes to Orange and Osceola counties, too and those counties cannot just target Disney for more taxes to cover the expense of supporting the resort.”
The reality is that the legislature and DeSantis likely can’t actually do anything to Disney’s special district status.
Florida law dictates that special districts created by the legislature can only be dissolved with a majority vote of the district’s landowners. For Reedy Creek, that’s the Walt Disney Company,’ CNBC reported.
“If Florida really wanted to hurt Disney, it would keep the RCID and instead strip the $500 million+ in tax breaks that it is providing the company to move 2,000+ Disney Parks management and Imagineering jobs from California to Florida. There’s not been a word from DeSantis or any of his allies about doing that, which, to me, is the tell here,” Niles wrote.