Disney has issued an important warning about how the ongoing battles in Florida could really impact the Company.
We’ve got a long post on the history here, but the basic story here is that following Disney’s statement against the Parental Rights in Education Bill (what critics called “Don’t Say Gay”), Florida Governor Ron DeSantis and Florida legislators took steps to dramatically change the Reedy Creek Improvement District Disney had controlled and operated under for 50+ years. Disney has filed a federal lawsuit alleging that this was all a plan of retaliation by the Governor and others, the Governor has signed a law to void some of Disney’s agreements with the prior board, the new board of the District has filed a lawsuit against Disney, and (basically) the battle is still ongoing. But now we’ve got an interesting development to share.
On May 10th, Disney released its quarterly earnings report and held its earnings call about its latest fiscal quarter. We got updates on Disney+ subscriptions, how the parks are doing financially, Disney+ plans for the future, and what Disney CEO Bob Iger thinks about the DeSantis situation. But now we’ve got another update.
In one part of a quarterly report filed with the SEC (FORM 10-Q), Disney has a section titled “Regulations applicable to our businesses may impair the profitability of our businesses.” It goes through various things that could impact Disney’s business and its ability to be profitable. That includes things like US FCC regulation of TV and radio networks, privacy and data protection laws, environmental protection regulations, restrictions on licensing, and more.
In a bottom paragraph portion, the company also details other things that could impact their business like issues with international political, trade, and security policy that could impact Disney’s operations outside the US. They specifically cite examples related to sanctions in Russia and more.
That language isn’t new and has been there in previous reports (for example, we saw much of that in the report filed for Q1 of fiscal year 2023). But a specific addition appears to have been made to the report for Q1 of fiscal year 2023 related to the DeSantis drama.
The bottom portion now also says, “In Florida, steps directed at the Company (including the passage of legislation) have been taken and future actions have been threatened, which collectively could negatively impact (and may have already impacted) our ability to execute on our business strategy, our costs and the profitability of our operations in Florida.”
In other words, Disney is warning investors that the things happening in Florida with the actions taken related to Disney and the Reedy Creek District by DeSantis, the legislature, and/or the new Board of Supervisors could negatively impact Disney’s ability to do the things they had planned for Florida or be as profitable as they may have hoped to be in Florida.
This comes just as Iger stated during the earnings call that DeSantis’ actions have been a matter of pure retaliation. Iger pointed out how Disney is the largest taxpayer in Central Florida, employs around 75,000 people in the state, and has plans to invest billions more in Disney World over the next several years.
He posed the following question seemingly to those in leadership positions within Florida’s political realm — “Does the state want us to invest more, employ more people, and pay taxes, or not?”
We will be watching for more updates and will share those with you. For now, you can click here to see what recent polling has to say about Americans’ opinion on the debate. Or you can learn more about the bill DeSantis has signed into law that’ll impact monorail inspections, and another bill being introduced that could affect Disney’s no-fly zones. Stay tuned for more news.
I think DeSantis should leave Disney alone and let them
Continue to price themselves out of business.
DeSantis seems determined to kill the goose that laid the golden egg simply because his narcissistic little feelings were hurt. This is pure and simple retaliation against free speech. And we thought Republicans were business friendly.
Why is it the DeSantis rule. Why should Disney be given a competitive advantage over Sea World, Universal etc. All should be treated equally. Sick and tired of the slanted, ignorant generalizations being made against the state of Florida. Remember DeSantis didn’t pass the rules the STATE legislature did. Now Eiger will blame Florida for Disney not living up profit expectations, instead of their mediocre programming. Disney shareholder who is sick of the b.s.
Laurel Lane says
Maybe they should stay out of politics? Maybe not go up against a bill for parents rights?
Disney has 1st amendment rights just like everyone else and the bill had nothing at all to do with parents rights.
How can 1 man, a governor, be permitted to use his position to attack a company. I just don’t get it. He is using government to attack a company. Why is he allowed to do this? Isn’t this an abuse of power? Someone explain how it’s not. His legislation is directly purposed, aimed, and targeted at WDW. Not even he denies it. He publicly brags about taking Disney down. He uses misleading statements like “the voters” want this. The voters support him. What “voters”. He treats Americans like we’re stupid. Like we don’t understand what’s going on. Twisting truths. He is using his office to carry out a personal vendetta. How is that allowed. Why is no one investigating the unlawful use of power? Ohhhhhhh….wait! It’s just American politics.
Lil DeSantis represents poor, selfish leadership. He is a controlling ignorant freak. I’m so proud of Iger and all of Disney’s staff..
Keep fighting! Don’t let that creep steal the power you’ve successfully carried for 50+ years. Florida’s citizens deserve better.
Hear, hear, Laurel! I second your sentiment!
And, Jim, you are 100% correct about Disney’s competitive advantage being completely unfair and just plain wrong.
The state statutes allow the state to completely dissolve the special district. They haven’t as they’d hoped to work with Disney.
But Disney isn’t trying to work things out. So as far as concerned it’s on Disney with respect to their future.
Time to shut up shop and move. The DeSantis picked board and Legislature will do nothing but impinge Disney’s ability to expand. The board will ensure the streets and area around Disney is kept in disrepair so it brings the company reputation Down (further than Disney already has).
Thomas S Hoade says
My concern isn’t for Disney or DeSantis BUT the 75,000 employees and ALL of Florida’s population. How would this affect unemployment, cost of living, tourism, grocery, education and medical costs? Things were working fine before….why can’t we leave it alone.
The bill has everything to do with parental rights. Most government and media is trying to take away the rights of how parents teach and raise their kids. Good for Desantis for realizing and acting on what’s truly important.
Why are the Villages and Daytona speedway not affected like Disney? They have special treatment, too!
A. C. LYNCH says
Disney will be around long after DeSantis is gone and forgotten. They can just wait him out. Better yet, help his departure with some well placed campaign contributions.
Patricia O’Connor says
DeSantis is a little wanna-be Dictator. It’s shameful what he is doing to Florida.
Those of you saying Disney should’ve stayed out of this clearly don’t understand the 1st Amendment and that it protects corporations. Please go learn what you should’ve already learned about the Constitution while in school, because clearly you weren’t paying attention. Also, you clearly don’t care about minority groups that DeSantis’ heinous bills target–go reassess your moral compasses before criticizing Disney’s decision, otherwise you just sound uneducated and bitter.
We live in Florida and applaud our governor for wanting to level playing field for all businesses in Florida. Florida is a great state in which to live and to do business. Disney is acting like a whiny child throwing a temper tantrum. It’s time for Disney to stay out of Florida’s politics and to get back to doing what it used to do very well: providing wholesome, clean entertainment for families.
Disney THREATENED the governor of Florida and was telling him that he better NOT sign a law that the FLORIDA legislature passed and sent to him to sign.
DeSantis pointed out that he did NOT work for Disney, but for the people of Florida. And Disney KEPT PUSHING AND THREATENED TO FORCE DESANTIS TO CHANGE THE LAW.
THAT is when DeSantis started looking at Disney’s “SPECIAL ASSESSMENT”. Basically saying to Disney… You know, your company has been treated pretty well by the State of Florida for 50 years, but if you are going to insist that you stick your nose in the running of the state (which is what the GOVERNOR and the ELECTED Florida Congress and Senate are there to do), then it’s time to take a look at WHY Disney HAS that “special assessment” and take a second look at if THAT is fair to ALL the other businesses in Florida who DON’T get that deal.
It SERVES Disney right for getting too big for their britches and thinking that they could TELL THE GOVERNOR THAT THEY WERE GOING TO GET A LAW CHANGED THAT LEGALLY WENT THRU THE LEGISLATURE AND GOVERNOR…. AS IS THE WAY OUR CONSTITUTION DICTATES.
NOT for a huge company to think that they can BULLY a governor to do what THEY want!
SERVES DISNEY RIGHT!
natasha r sirugo says
Those of you saying Disney should stay out of politics; they weren’t the ones throwing themselves into this hateful campaign targeting the LGBTQ+ community, it was Desantis doing this because a huge corporation like Disney told the little worm dictator, that they don’t agree with his vile behavior to discriminate against this community. They simply made a statement that they don’t agree that they support the LGBTQ plus employees and families and they have every right to speak up it’s called freedom of speech.! Even if you people on here want to call it politics or whatever it’s called the first amendment rights to freedom of speech you might want to go back to school look it up! Disney had every right to speak up and have their opinion on the reason why did little dictator want to be is coming after Disney is because he’s pissed off that they didn’t agree with him and they’re a huge company and he wanted them to back him up but he’s wrong. He’s a discriminatory racist little man, he’s transferring back and he’s disgusting and violent and if anything he should be removed from office for constantly lying and saying things like this is what the voters want. He’s such a liar this is not what they want most people there probably don’t even agree with him.!!! Disney will most definitely come out the winners of this because they’re bigger they’re stronger and they will be around much much longer than this little one will be all they have to do is keep fighting until the dictator is gone!
So funny the people who post that they should just pick up and leave the state. Like they could freaking do that. Any more than the state could just blow off Disney as a taxpayer. They’re stuck with each other at this point. Anybody that says Disney should just pick up and leave knows nothing about common sense much less business.
For everyone here espousing that Disney should stay out of politics and that they are receiving extra benefits and now they are being treated equally, listen closely.
First, the new agreement does NOT make them equal to all the other theme parks or special districts because Disney’s Board members are made up from people who live outside the district. No other district in Florida has that, so again, tell me how that makes it equal to everyone else? Special privileges? You mean the contract they initially signed with Florida that gave birth to the tourism industry of Central Florida and which EVERY theme park in the area is beholden to, because without Disney’s foresight, planning, and willingness to take a gamble on prime grade-A swampland, there would be no tourism in Central Florida? These special provisions you speak of come with a very high standard to uphold. Disney proves that the private sector, when given the chance, can do basic upkeep of roads and infrastructure better and cheaper than the government. They also pay over a billion in tax money while doing it.
You want Disney to “stay out of politics”. The quick, easy, and correct answer is a simple “no”. Disney has the 1st Amendment to speak out against the government with no retaliation, something that the current Harvard trained lawyer forgot in all his 3 years of law school. Disney’s lawsuit will be taught in law school for years as a very clear example of what NOT to do if you are the government in regard to 1A and the contract’s provision in the Constitution.
The fact is that DeSantis colluded with members of the state legislature to have these laws drawn up, so there is no lying that it was the legislature that did this, not De Santis. To think otherwise is disingenuous and shows a lack of critical thinking skills because he said it in his own words and in his own book. they literally said that these laws were specifically enacted to affect only WDW. That is a unconstitutional.
It constantly boggles my mind that anyone, especially conservatives, can support or defend these actions. You elect politicians to represent you, you don’t elect them to think for you.
An actual Conservative
Desantis is a dictator bent on twisting the state and the rest of the country to his fascist ways.
He will persist until he drives Disney out of Florida.
He is destroying the American values and society and his so called anti woke campaign book banning don’t say gay transphobic etc.
People are wrong when they say the governor has the right to use his government powers to retaliate against anyone for their views, including companies. You don’t seem to understand the first amendment. We aren’t an authoritarian country and shouldn’t make moves to act like one. You wouldn’t like it if a Democratic governor started passing laws to punish a company that isn’t “woke enough” or speaking out against DEI initiatives, etc. So don’t look at it from the short term partisan lens and start seeing the big picture why we have greater principles that DeSantis has violated. Also, the Republican Party would normally be pointing at Reedy Creek as a success story of slashing big government regulations and cutting red tape to create economic success. The whole argument against it is backwards for DeSantis’ personal vendetta.
To: Jake says….
I think I view this differently….
Ron DeSantis was just going along doing his job. In fact, the legislature of Florida was working on that bill and DeSantis was not the one driving it.
Then Disney INJECTED themselves into it and DEMANDED that DeSantis NOT sign it and when he did, they THREATENED him AND the duly ELECTED legislature… (Claiming that Disney WOULD BE FORCING THEM TO RESCIND IT).
THAT is when DeSantis pointed out to Disney …”hey… This is NOT your wheelhouse AND as a matter of fact, the state of Florida has GIFTED to you QUITE the exemption FOR YEARS that no one else, NO OTHER BUSINESS has EVER had in the state. (As far as big government etc etc… Why should Disney get that perk and not Sea World or Universal…?)
I say that Disney brought themselves into the spotlight and it occurred to the governor that Florida having gifted Disney that exemption for all those years has given them the idea that THEY were powerful enough to DEMAND that the Constitution be ignored and that THEY should be able to change a law that was created and passed ACCORDING TO THE CONSTITUTION.
THAT is why I think it is fair. Disney stuck their nose in and thought they could call the shots. Disney is NOT the elected legislature in Florida and has NO PLACE to demand a law not be passed, or not be signed and then when they didn’t get their way, claiming that THEY WOULD CHANGE IT.
They were foolish, brought attention to the exemption that they had been so fortunate to have enjoyed all these years and now they are having a consequence for their thinking they were in charge of laws in the state of Florida. 🤔
Reedy Creek was never intended to be a permanent perk for Disney. The Reedy Creek District was intended to help Disney get WDW developed when Orlando was nothing but a swamp. This assistance is no longer needed. Desantis is actually not the only Florida governor who has looked into changing the rules for Reedy Creek. It’s long overdue. It’s time to level the playing field for Disney and its competitors. Disney has a right to free speech. That’s not the issue. Florida also has a right to govern businesses located in Florida. Personally I think Disney is evil for wanting to discuss sex and gender with 6-year olds over their parents’ objections, but so be it. I vote with my wallet, and we have substantially reduced our spending on Disney products and services.
EXACTLY, and clearly spoken.
This is my point for sure.
Laurel Lane says
Totally agree with Cynthia.
For those who think DeSantis is a “dictator” and pickib on poor Disney, how would you feel if your kindergartener came home and said they wanted a sex change? The bill isn’t against the alphabet people, it’s to keep things like this from happening. Disney should just move out of Florida and lease the land to the Japanese comp that owns Toyko Disney. They do a better job with their parks than Disney World does.
Richard Mercer says
The ideal resolution would be for Disney World to secede from the State of Florida, and become an independent US territory like the District of Coumbia. (Not holding my breath…)
Haha. Then ½ of Oregon wouldn’t have to try to become part of Idaho as they are attempting to right now…. and I think MANY towns and cities would like to get away from their woke overlords by doing that! (Case in point, many parts of CA…. EXCEPT LA, SF and SD) LOL 🤣
I am a Floridian for over 50 years now. DeSantis is taking our state backwards. Does anyone on here who commented know that there are 2,000 plus corporations in the state of Florida that have special districting like Disney has? The only difference is they haven’t spoken out against DeSantis’s bills he’s passed here that are taking us back to the days when people didn’t have the rights we have today. Not everyone feels the same way as Ron D and why is he shoving his opinions down everyone’s throat her in Florida. He is a dicator not a governor! His slogan for his campaign should be “make America like Florida” then the whole country will be equal and have no rights at all if he might win. God help us if he does.
To Barbara, I do not think that the 2000 corporations your refer to have the same privileges that Disney had…
Disney had their own POLICE force. FIRE Dept, Post Office, Tax privileges….. If there were any deaths, crimes etc etc ON DISNEY PROPERTY, the police who dealt with it were DISNEY….
I HIGHLY DOUBT that ANY other corporation had those privileges.