Could Disney be headed toward a massive “disaster“?
Though Disney’s princesses may often get their “happily ever after,” Disney’s own relationship with Florida politicians, especially Florida Governor Ron DeSantis, is suffering from some severe challenges and things could be getting worse. How critical is Disney’s relationship with DeSantis and where could it be heading in the next few months/years? We’re sharing ALL of the information you need to know right here.
For Years, A Friendly Relationship with Florida Politicians Has Benefitted Disney
In 2022, we spoke with Professor Aubrey Jewett (an assistant school director and associate professor in the School of Politics, Security, and International Affairs at the University of Central Florida). Jewett pointed out that historically, Disney has worked mostly “behind the scenes” to influence legislation. They’ve invested millions of dollars in donations to political parties, hired lobbyists, and given in-kind donations (like tickets or hotel stays) to the appropriate groups.
Both Republicans and Democrats have received the benefit as Disney tried to “spread the wealth” to get everyone on their side. But, since Republicans have essentially been in charge of Florida’s government for the last several years, Disney has given disproportionately to Republicans.
Disney’s friendly relationship with Florida politicians has, for years, greatly benefitted Disney. Critically, Disney was able to obtain and maintain its own separate district — the Reedy Creek Improvement District (RCID) — which essentially allows it to function as its own county government and gives it a lot of control over the land on which it operates. But Disney has also benefitted in other ways, influencing politicians to put in certain exceptions on laws (like Florida’s social media law) or pushing for legislation that would benefit its business.
But, let us not forget that Florida has benefitted from Disney, too.
Disney World draws in HUGE tourist numbers, and more tourists mean more spending in the state. Plus, Disney World serves as a hub for thousands of jobs in Florida, benefitting Florida residents too.
According to the Washington Post, Disney is one of the state’s largest employers (over 70,000 employees), Magic Kingdom alone brought in nearly 21 MILLION guests in 2019, and Disney paid $780.3 million in state and local taxes (combined) in 2021. And Orlando “has become the theme-park capital of the world.”
As current Disney CEO Bob Iger once put it: “The state of Florida has been very important to us for a long time, and we have been very important to the state of Florida.” But things with this relationship have gone sour, and it could impact people on both sides.
Things Have Broken Down — And It’s Not Good for Disney
By now, you’re likely very familiar with the “Don’t Say Gay” controversy, but we’ll give you a quick recap. The Parental Rights in Education act (what critics call the “Don’t Say Gay” bill) started as a bill introduced in Florida. Disney initially refused to make a statement on the bill.
But, Bob Iger (who was not CEO at the time) wasted no time expressing his views. In February of 2022, Iger tweeted that the bill would “put vulnerable, young LGBTQ people in jeopardy.” He later explained that in his opinion, speaking out on this issue “wasn’t about politics. It is about what is right and what is wrong, and that just seemed wrong. It seemed potentially harmful to kids.”
I'm with the President on this! If passed, this bill will put vulnerable, young LGBTQ people in jeopardy. https://t.co/fJZBzre4yM
— Robert Iger (@RobertIger) February 25, 2022
Then-Disney CEO Bob Chapek eventually apologized for not being a “stronger ally in the fight for equal rights,” and indicated that Disney was opposed to the bill. Chapek had indicated that he had discussed the bill with DeSantis, and he had arranged for a meeting between himself, Cast Members, and DeSantis to discuss their concerns about the bill.
Disney later made a stronger statement against the bill as it was passed, indicating that it should not have been passed and that Disney would work toward its repeal.
This prompted Florida Governor Ron DeSantis to indicate that Disney had crossed a line. Following this, in what many view as (and some have explicitly expressed as) a form of retaliation, the Florida legislature and Governor DeSantis passed/signed a bill into law that will dissolve Disney’s Reedy Creek Improvement District (RCID) in June of 2023.
Some have suggested that the RCID will just be reformed with only Disney’s extreme powers (building a nuclear power plant) removed. Others have suggested a more middle ground where perhaps a member of the board of this new district is appointed by DeSantis.
If that happens, that could place a large part of Disney’s “normal” operations in jeopardy — the way they have done business for over 50 years could dramatically change.
One political analyst once said that the dissolution of the RCID would be a “disaster” for Disney. Why? It could strip them of the control they’ve had for years and put them in a position they never wanted to be in. Over at Disneyland (in California), Disney is dependent on local governments for building code changes, etc., something we’re seeing become an issue with future development plans for the park. Disney could end up facing similar challenges, becoming more dependent on local governments to get approval for all kinds of changes it wants to make, rather than going to its “internal” government of sorts (RCID).
As of the Washington Post explains, the RCID has let Disney operate “without much of the red tape that usually comes with dealing with local governments.” They have their own building codes and they can issue debt in the form of bonds “for infrastructure and utility projects.” Take away that power and the next few years of building at Disney could look very different, or at least could be much more challenging.
Could Iger Be the Key? His Return Might Not Be Enough
Some suggested that Iger’s return to the CEO role would ease tensions between Disney and Florida politicians. In fact, the very Republican lawmaker who drafted the bill that will dissolve the RCID, Randy Fine, said that Chapek’s removal made it more likely ‘that something will get sorted out’ over the district.
He shared, “It’s easier to shift policy when you don’t have to defend the old policy… Chapek screwed up, but Bob Iger doesn’t have to own that screw-up.”
But DeSantis doesn’t seem to be impacted by Iger’s return, at least not outwardly.
One site characterized the potential change with RCID (in terms of sorting something out over the district that keeps it mainly in tact) would be a sort-of u-turn on the topic. But a spokesperson for DeSantis denied this potential saying, DeSantis “does not make U-turns” and “the state certainly owes no special favors to one company.”
When asked about the legal battles in Florida, Iger (upon his return as CEO) indicated that he was “sorry to see [Disney] dragged into that battle.” This, again, was met by a clash with DeSantis, who responded by saying, Disney wasn’t “dragged” into any issues. Instead, he insisted “they went in on their own.”
DeSantis continued, “They brought this on themselves. All we did was stand up for what’s right…I don’t care what a Burbank-based California company says about our laws.”
We’ve since seen a notice posted on the Osceola County website indicating an “intent to seek legislation before the Florida Legislature…of an act relating to the Reedy Creek Improvement District.”
The notice outlined that the primary goal of the legislation is to increase “state oversight, accountability, and transparency of the District” while also “revising the selection process, membership qualifications, and compensation for the governing body of the District.” Right now, the majority landowner in the District (Disney) selects those on the governing board. If that changes, that could place Disney at more of a disadvantage.
The new legislation is also meant to ensure “debts and bond obligations held by the District remain with the District and are not transferred to other governments by retaining the District’s authority related to indebtedness and taxation.” And it could revise authority when it comes to local permitting and regulation, and change the regulatory framework and structure.
Essentially, DeSantis doesn’t appear to be backing down from the battle. While a district could take the place of the RCID in the future, it could look very different than the version Disney is used to, and that could mean Disney won’t be able to pass rules and regulations that benefit its parks and resorts as easily as they once could. (It’s a potential reason behind some of the actions Disney is taking NOW to set itself up for success regarding future park developments.)
So…What Happens Now?
As much as some fans might want them to, Disney cannot get out of or escape its involvement in Florida (and, really, national) politics.
As Professor Jewett once commented, Disney is the type of big company with many varied interests that could be impacted greatly by laws the legislature passes. In modern America, that type of company can’t just remove itself from politics entirely. To do so would be, as Jewett put it, like a turtle simply remaining inside of its shell.
Like it or not, Disney and Florida need each other.
Realistically, Disney isn’t going to pick up its theme parks in Florida and move them all to another location or close down Disney World — so Disney needs Florida in a way that Florida perhaps is more willing to now expose. In a sense, it can give Florida the “upper hand” because they know Disney can’t just “leave.”
But it’s undeniable that Disney is valuable to Florida and the Company could take other actions that would negatively impact Florida, though it would not rise to the level of actually leaving. For example, Disney’s plans to relocate thousands of jobs to the Orlando area have been delayed. Could Disney, as a way to “hit” Florida politicians back, choose to keep those jobs in California and end the move altogether? That could mean that thousands of employees who would have paid taxes in Florida, bought homes in Florida, and spent money in Florida would suddenly be taken out of the equation, hurting Florida from a financial perspective.
What if Disney develops plans for a new theme park or experience (as they often do)? Maybe they would have placed that in Florida under other circumstances, but they could choose to build that experience in California or another place, again impacting Florida by depriving them of the potential financial and tourist benefit that new experience would have drawn to the state.
And it’s not as though the Florida government has complete control over the future of the RCID. Professor Jewett has pointed out that Disney has unique leverage here. Because Disney is the sole landowner in the district, they’d have to agree to new terms, at least as it relates to a replacement district. That gives them some potential power over what the future could look like.
The regular session of the Florida legislature begins in early March of 2023 (March 7th) and it seems like Reedy Creek will likely be top of mind. How will Disney’s influence in the state impact the future of the District and whatever may replace it? Will Iger be able to smooth over relations with DeSantis? What could the next 50 years look like when it comes to challenges Disney will face if Reedy Creek really goes away? Only time will tell.
We will be keeping a close eye out for updates, so stay tuned for all of the latest news.
Click here to see the timeline that has been revealed for Chapek’s exit, Iger’s return, and Disney’s corporate battles
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How do you think the battles between Disney and Florida politicians will play out in the next few months/years? Tell us in the comments.